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First Resources (FR SP): Palm oil prices at a two-year high

• BUY Entry – 1.48 Target– 1.60 Stop Loss – 1.42
  
• First Resources Limited produces crude palm oil. The Company is an upstream operator with primary business activities in the cultivation and harvesting of oil palms, and the processing of fresh fruit bunches into crude palm oil for local and export sales.
  
• Palm oil prices surged to a two-year high. Palm oil prices have surged for three consecutive days, reaching a two-year high due to strong demand and tightening supply. October exports from Malaysia, the world’s second-largest palm oil producer, rose 11%, driven by increased shipments to India, China, and the EU. Higher crude oil prices also boosted palm oil’s demand as a biofuel feedstock. Additional demand is expected from Indonesia’s plan to raise palm oil use in biofuel next year. Supply challenges, partly due to aging palm trees, have driven palm oil prices up over 30% this year. Experts anticipate the rally may continue into the first quarter of 2025, supported by seasonal consumption, limited supply, and biodiesel demand. This price increase benefits palm oil producers such as First Resources.
  

Crude Palm Oil Price

(Source: Bloomberg)

• Thailand bans exports of palm oil. Thailand’s Department of Internal Trade has imposed a temporary ban on raw palm oil exports due to reduced production from drought and plant diseases, intending to stabilize local prices and maintain sufficient stock. The ban, expected to last until December, aims to shield consumers and farmers from price spikes. With crude palm oil stocks over 200,000 tonnes, industry associations have agreed to halt exports and keep prices stable until January 2025. Retailers and wholesalers have also pledged to maintain reasonable bottled palm oil prices, with potential penalties for violators, including fines or prison time. This ban will result in reduced palm oil supplies, which will continue to bolster prices.
  
• 1H24 results review. Total revenue for 1H24 increased by 1.9% YoY to US$457.2mn from US$448.8mn, primarily due to the higher production volumes as compared to the same period last year, partially offset by a reduction in purchases of palm oil products from third parties for processing and sale. Net profit was US$103.9mn in 1H24, an increase of 45.4% YoY and profit from operations rose by 48.9% YoY to US$143.5mn, driven by higher production volumes and improved processing margins. Basic EPS rose in 1H24 to 6.67 UScents from 4.56 UScents in 1H23.
  
• Market Consensus.
  

(Source: Bloomberg)

Yanlord Land Group Ltd (YLLG SP): China’s stimulus to boost value

• RE-ITERATE BUY Entry – 0.680 Target– 0.760 Stop Loss – 0.640
  
• Yanlord Land Group Ltd is a real estate development company. The Company develops high-end residential property projects in the Peoples Republic of China.
  
• Signs of recovery in the property market. China’s property market is showing signs of recovery, with transaction volumes in major cities surging due to recent measures aimed at boosting demand and restoring confidence. In October, Shanghai’s secondary market recorded over 20,000 transactions—a month-on-month increase of 52.3%, according to data from the Shanghai Real Estate Trading Centre. Similarly, Beijing saw 11,699 pre-owned home sales from October 1 to 24. This uptick in transactions across top cities suggests a broader rebound in China’s property market. The recovery is supported by various government measures, including lower down payment and mortgage rates, an expanded “white list” to provide liquidity support for developers, and relaxed home purchase restrictions in key cities. This renewed momentum in China’s property market stands to benefit companies like Yanlord Land Group, which is well-positioned to capitalize on the improving market dynamics.
  
• Liquidity buffers for developers. The Ministry of Finance reiterated recently that the central government has room to increase fiscal deficit. The key policies shown are expected to ease property and construction companies’ liquidity issues.
  • Allocate 400 billion yuan (US$56.57 billion) from the local government debt balance limit to expand local financial resources.
    
  • Tap funding from an unused bond quota of 2.3 trillion yuan (US$325.3 billion) for local governments.
    
  • Introduce a one-time, large-scale debt ceiling increase for local governments to swap their hidden debts.
    
  • Allow local governments to use special bonds to purchase idle land from troubled developers.
    
  • Use special bonds to purchase existing commercial homes. Earmark more for offering government-subsidised homes, and less on building new homes.
    
  • Optimise tax policies and study the abolition of value-added tax on ordinary residential buildings.
    
• Monetary policy tool to support capital market. China’s central bank announced the establishment of the Securities, Funds, and Insurance Companies Swap Facility (SFISF), with an initial scale of 500 billion yuan, aimed at promoting the healthy and stable development of the capital market. This marks China’s first monetary policy tool designed to support the capital market. The SFISF will allow eligible securities, funds, and insurance companies to use their assets, such as bonds, stock ETFs, and holdings in CSI 300 Index constituents, as collateral to obtain highly liquid assets like treasury bonds and central bank bills, according to a statement by the People’s Bank of China. The facility’s scale could be expanded based on market conditions. For China State Construction International Holdings (CSCIH), this provides access to highly liquid assets, strengthening its liquidity position and enhancing its ability to manage cash flow and finance operations. Additionally, the SFISF is expected to mitigate herd behavior and other pro-cyclical actions in the capital market, fostering a more stable and predictable environment for CSCIH to operate in.
  
• 1H24 results review. Total revenue for 1H24 increased by 34.8% YoY to RMB19.953bn from RMB14.805bn in 1H23. Income from property development, property investment and hotel operations, and property management for 1H24 increased by 42.4%, 1.9% and 0.4% to RMB17.488bn, RMB894mn and RMB591mn, respectively, while income from other segment decreased by 7.2% to RMB980mn, compared to 1H23. The Group reported a loss for the period of RMB421mn and a loss attributable to the owners of the Company of RMB486mn in 1H24, mainly due to write-down of completed properties for sale and properties under development for sale and net impairment losses on financial assets.
  
• Market Consensus.
  

(Source: Bloomberg)

China Hongqiao Group Ltd. (1378 HK): Rallying aluminium prices

• BUY Entry – 12.70 Target 14.10 Stop Loss – 12.00
  
• China Hongqiao Group Ltd is a company principally engaged in the manufacturing and sales of aluminum products. Its primary products include molten aluminum alloy, aluminum alloy ingots, aluminum busbars and aluminum alloy processing products. It operates principally in the People’s Republic of China (the PRC), Hong Kong, and overseas countries, including the British Virgin Island (BVI), Indonesia and Cayman Island. The Company is also engaged in the bauxite trading, financial leasing and environmental protection and inspection businesses through its subsidiaries.
  
• Rallying Aluminium Price. Aluminum prices have been on a steady rise since early August, increasing from around US$2,250 per metric ton to the current level of approximately US$2,600 per metric ton, nearing their May peak. This upward trend is largely driven by global supply chain disruptions, escalating raw material costs, and higher operational expenses. Additionally, recent economic stimulus measures in China aimed at boosting demand are further contributing to heightened demand and supporting aluminum prices. This price increase is expected to benefit China Hongqiao Group.
  

Aluminum Spot Price

(Source: Bloomberg)

• Expectations of higher EV demand driving aluminium demand. According to Bloomberg, China’s leading EV manufacturers closed 3Q24 on a high note, with robust delivery numbers reducing the pressure to offer discounts. Despite intense price competition and escalating trade tensions with Europe, China’s EV market is set to remain the world’s strongest as 2024 nears its end. The market currently anticipates a surge in EV sales for 4Q24, driven by expanded subsidies that have fueled stock gains and led to Tesla’s best quarter in China. Furthermore, in September, EVs and hybrids comprised approximately 53% of new car sales in China, underscoring their growing market share. This expected rise in EV demand is also likely to drive up aluminum demand, potentially pushing prices even higher.
  
• Strong Aluminium output to cater to demand. China’s aluminum production rose in September compared to the previous year, supported by steady demand and sustained profitability for producers, according to official data. The country produced 3.65 million metric tons of primary aluminum in September, marking a 1.2% year-over-year increase, as reported by the National Bureau of Statistics. Daily output in September averaged 121,667 tons, slightly up from August’s 120,322-ton daily average. This production growth aligns with strong demand across the transportation, construction, and packaging sectors, bolstered by rapid consumption from the solar and renewable power industries, which has helped counterbalance weaker demand from the property sector.
  
• 1H24 earnings. The company’s revenue rose to RMB73.6bn in 1H24, +12.0% YoY, compared to RMB65.7bn in 1H23. The company’s net profit rose by 272.7% YoY to RMB9.15bn in 1H24, compared to RMB2.46bn in 1H23. Basic earnings per share rose to RMB0.966 in 1H24, compared to RMB0.259 in 1H23.
  
• Market consensus.
  

(Source: Bloomberg)

Xinyi Solar Holdings Ltd (968 HK): Domestic policy support

• RE-ITERATE BUY Entry – 3.90 Target 4.60 Stop Loss – 3.55
  
• Xinyi Solar Holdings Ltd is a company principally engaged in the production and sale of solar glass products and the development and operation of solar farms. The Company operates its businesses through three segments. Sales of Solar Glass segment is mainly engaged in the sales of solar glass. Solar Farm Business segment is mainly involved in solar farm development and solar power generation. Other segment is mainly involved in engineering, procurement and construction (EPC) services and sales of mining products. The Company’s products comprise ultra-clear patterned solar glass (raw and tempered), anti-reflective coating glass and back glass. The Company mainly conducts its businesses in the domestic market and overseas markets.
  
• Updated policies to drive the demand for photovoltaic (PV) systems. The National Development and Reform Commission (NDRC) recently announced a revised policy aimed at advancing renewable energy, with a particular emphasis on photovoltaic (PV) systems. The policy encourages the installation of PV systems on the rooftops of existing buildings and in newly constructed factories and public buildings, where feasible. Market feedback also suggests a future focus on aesthetics, power generation efficiency, and material costs in the development of Building-Integrated Photovoltaics (BIPV), favoring companies with industry-leading technologies. Additionally, the policy calls for prioritizing renewable energy use in the planning, construction, and redevelopment of urban areas. As one of the world’s top photovoltaic glass manufacturers, Xinyi Solar Holdings is well-positioned to benefit from these updated policies.
  
• New Renewable Energy Consumption Benchmarks. China’s National Development and Reform Commission (NDRC) and National Energy Administration (NEA) have jointly released updated requirements for the percentage of energy that provinces must source from renewable generators in 2024 and 2025. These requirements are part of China’s renewable energy consumption guarantee mechanism, mandating a significant increase in the share of renewable energy in several provinces. The document also outlines tentative renewable energy consumption targets for 2025. Current data reveals that six provinces experienced increases exceeding 6 percentage points in their renewable energy consumption mandate between 2023 and 2024. China remains on track to achieve its renewable energy goals, aiming for renewable energy, including hydropower, to account for 40 percent of total national energy consumption by 2030. This benchmarks are likely to spur on more investment into renewable energy as well.
  
• Rise in renewable energy in China. China’s renewable energy utilization has reached or surpassed advanced international standards, making rapid strides in its energy transition by expanding renewable capacity while relying on liquefied natural gas to meet rising electricity demands. The nation has shown strong momentum in renewable adoption, with a utilization rate of 97.6%, remaining above 95% for six consecutive years since 2018. Last year alone, new renewable energy installations reached 290 million kW—2.4 times the 2022 level—and accounted for 79% of the country’s total new power capacity, establishing renewable energy as the leading source of new power generation. This substantial capacity growth has spurred major investments in solar, wind, and hydropower projects across China. Projections indicate that by the end of 2024, China will reach 1,300 gigawatts (GW) of combined wind and solar capacity, surpassing its 1,200 GW target set for 2030. This trend aligns with China’s broader goals to reduce coal’s role in its energy mix and to fulfill its 2060 carbon neutrality commitment. Market expectations are that by 2028, approximately 50% of China’s electricity will be generated from renewable sources. Further underscoring its decarbonization progress, China’s National Energy Administration recently reported issuing 486 million Green Electricity Certificates (GECs) in the first half of 2024—a 13-fold increase from the same period last year. With this increased investment and focus on renewable energy, Xinyi Solar Holdings stands to benefit substantially.
  
• 1H24 earnings. The company’s revenue rose to HK$12.7bn in 1H24, +4.49% YoY, compared to HK$12.1bn in 1H23. The company’s net profit rose by 41.0% YoY to HK$1.96bn in 1H24, compared to HK$1.39bn in 1H23. Basic earnings per share rose to 22.03 HK cents in 1H24, compared to 15.63 HK cents in 1H23.
  
• Market consensus.
  

(Source: Bloomberg)

Spotify Technology SA (SPOT US): A leader maintains its competitive edge

• BUY Entry – 380 Target – 420 Stop Loss – 360
  
• Spotify Technology S.A. and its subsidiaries provide audio streaming subscription services worldwide. It operates through two business segments: paid subscriptions and ad-supported.
  
• Leading music streaming platform. As of the second quarter of 2024, Spotify maintained its position as the top music streaming platform, with a record 625mn monthly active users (MAUs). This includes an all-time high of 393mn ad-supported users and 246mn paying subscribers. With an estimated global music streaming user base of 713mn, Spotify holds a leading 31.7% market share. Average revenue per user (ARPU) was €4.62 in Q2, close to its historical peak of €4.63.
  
• Podcast growth driven by audience shifts. The expansion of Spotify’s podcast audience reflects a shift in media consumption, as public trust in traditional media declines. A Washington Post commentary highlighted distrust in mainstream media, with a notable drop of 200,000 subscribers. In contrast, alternative media like podcasts are gaining traction—Donald Trump’s recent appearance on Joe Rogan’s show garnered 26mn views and listens within 24 hours, underscoring the popularity of podcasts. Spotify’s podcast offerings have grown to 250,000 videos by Q2 2024, from 100,000 at the end of 2023, with over 170mn users engaging with its video podcasts.
  
• Leveraging artificial intelligence. Spotify has integrated artificial intelligence to enhance user experience, providing personalized music, podcasts, and playlists. In 2023, the company introduced AI-driven voice translation for podcasts, boosting engagement and user retention. This advanced AI model strengthens Spotify’s competitive edge and enhances user loyalty.
  
• 2Q24 results. Revenue increased 20.2% YoY to €$3.81bn. Basic earnings were €137mn compared to a loss of €155mn in the same period last year. The company expects third-quarter revenue of €400mn and a total of 639mn monthly active users.
  
• Market consensus.
  

(Source: Bloomberg)

DoorDash (DASH US): Leading food delivery platform

• RE-ITERATE BUY Entry – 154 Target – 174 Stop Loss – 144
  
• DoorDash, Inc. provides restaurant food delivery services. The Company develops technology to connect customers with merchants through an on-demand food delivery application. DoorDash serves customers in the United States.
  
• America’s leading food delivery platform. According to Bloomberg, as of May this year, DoorDsah ranks first in the U.S. food delivery platform market in terms of ross merchandise volume (GMV), with a share of approximately 67%. Since the COVID-19 epidemic, food delivery services have grown rapidly, with YoY growth of approximately 8% in the first half of this year.
  
• DashPass Membership Services. DoorDash provides DashPass membership service. Subscribers can enjoy free shipping and discount services, thereby increasing usage frequency and user loyalty. The company has been expanding its DashPass partners beyond just restaurants, including Lyft, NBA/WNBA and Chase Bank.
  
• Expand delivery services. DoorDash has gradually expanded its business scope, not only limited to catering, but also including grocery delivery, alcohol delivery, etc., to further meet the diverse needs of users.
  
• 3Q24 results. Revenue increased 25% YoY to US$2.7bn, exceeding expectations by US$50mn. GAAP earnings per share were $0.38. Total order volume increased by 18% YoY to 643mn; Gross order value (GOV) increased by 19% YoY to US$20bn. The company expects 4Q24 GOV of $20.6bn to $21.0bn.
  
• Market consensus.
  

(Source: Bloomberg)

Trump-themed Trades

With less than a week until the 2024 U.S. election, the latest polls show Trump maintaining a lead over Harris, increasing the likelihood of his comeback to the presidency. His well-known slogan, “Make America Great Again,” reflects the core of his platform, often described as advocating for isolationist policies. Should Trump assume office once again, his administration’s impact on global economics and geopolitics could be profound and unpredictable. While there are both pros and cons, here are several Trump-themed ideas worth considering:

1. Economic Reshoring – Trump has consistently pushed for bringing manufacturing jobs back to the U.S., aiming to reduce dependency on foreign markets. This could boost domestic employment and economic resilience, though it may strain trade relationships.
   
2. Trade Policy – Known for prioritizing “America First,” Trump may increase tariffs and negotiate stricter trade agreements, potentially reshaping international commerce but also risking retaliatory measures from other countries.
   
3. Immigration and Border Security – Trump has pledged to complete the U.S.-Mexico border wall, strengthening border security to curb illegal immigration and what he describes as the flow of drugs and crime across borders. Policies under a Trump administration would likely include stricter visa restrictions, aggressive deportation of undocumented immigrants, and limits on asylum, positioning immigration as a key national security issue.
   
4. Military and Security – Trump’s approach could see increased defense spending and a reassessment of U.S. involvement in foreign conflicts. While this may bolster national security, it could create tensions with allied countries that rely on U.S. support.
   
5. Energy Independence – Advocating for domestic energy production, Trump’s policies might drive a renewed focus on fossil fuels and reduced regulation on U.S. energy sectors. This could benefit local economies but raise concerns around environmental impact and climate commitments.
   
6. Social Policy and Education – Advocating for free speech on campuses and in public institutions, Trump is likely to target what he sees as “cancel culture” and censorship, especially in social media and mainstream media. Trump’s education policy includes promoting school choice, cutting federal control over education, and banning critical race theory from public education.
   
7. Cryptocurrencies – Trump used to be sceptical about cryptocurrencies, however, he repositioned himself as a pro-crypto presidential candidate in June this year. He declared that he wanted the U.S. to become the “crypto capital of the planet” and the Bitcoin “superpower of the world”. Trump’s crypto venture, World Liberty Financial, has launched its native token in October, and it plans to launch its own stablecoin, which is designed to peg 1 to 1 to the value of the USD.
   
8. Healthcare – Rather than supporting expanded government-funded healthcare, Trump advocates for market-driven healthcare reforms, which may include expanding health savings accounts, lowering prescription drug costs, and promoting private healthcare options.
   

Sector	Stock	ETF
Aerospace and Defense	Curtiss-Wright Corp (CW) General dynamics corporation (GD) Northrop Grumman Corp (NOC) Palantir (PLTR) Lockheed martin corporation (LMT) Rtx Corp (RTX)	iShares Global Aerospace & Defence UCITS ETF (DFND) iShares U.S. Aerospace & Defense ETF (ITA) Invesco Aerospace & Defense ETF (PPA)
Cryptocurrencies	CleanSpark Inc (CLSK) Coinbase Global Inc (COIN) MicroStrategy Inc (MSTR) MARA Holdings Inc (MARA) Riot Platforms Inc (RIOT)	ProShares Bitcoin ETF (BITO) iShares Bitcoin Trust ETF (IBIT)
Energy	Peabody energy corp (BTU) Dominion Energy Inc (D) Energy transfer (ET) Cheniere energy Inc (LNG) Targa Resources Corp (TRGP) Exxon Mobile Corp (XOM)	iShares US Energy ETF (IYE) Global X MLP & Energy Infrastructure ETF (MLPX)
Finance	BlackRock Inc (BLK) Blackstone Inc (BX) Capital One Financial Corp (COF) Discover Financial Services (DFS) Goldman Sachs Group Inc (GS) JPMorgan Chase & Co (JPM)	Invesco KBW Bank ETF (KBWB) SPDR S&P Regional Banking ETF (KRE) iShares U.S. Financials ETF (ITF)
Industrials and Manufacturing	Caterpillar Inc (CAT) Corning Inc (GLW) Dover Corporation (DOV) Ingersoll Rand Inc (IR) 3M Company (MMM)	iShares U.S. Manufacturing ETF (MADE) Tema American Reshoring ETF (RSHO)
Healthcare	Boston Scientific Corporation (BSX) Ensign Group Inc (ENSG) Intuitive Surgical Inc (ISRG)	iShares US Medical Devices ETF (IHI)
Small-and Medium-size Enterprise	Reddit Inc (RDDT) SoundHound AI Inc (SOUN) Hims & Hers Health Inc (HIMS)	iShares Russell 2000 ETF (IWM) iShares Russell 3000 ETF (IWV)
Trump-linked	Trump Media & Technology Group Corp (DJT) Rumble Inc (RUM) Tesla (TSLA)

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Trading Dashboard Update: Take profit on Entergy Corp (ETR US) at US$144.0 and Bumitama Agri Ltd (BAL SP) at S$0.83. Add Bumitama Agri Ltd (BAL SP) at S$0.770, Xinyi Solar Holdings Ltd (968 HK) at HK$3.90 and DoorDash Inc (DASH US) at US$154. Cut loss on Universal Display Corp (OLED US) at US$195.0.