Sector Performance | Hong Kong Trading Ideas |United States Trading Ideas | Singapore Trading Ideas| Trading Dashboard

United States

News Feed

1. S&P 500 climbs to another record close Tuesday as Nvidia’s market cap tops Microsoft

2. US budget office sees larger 2024 deficit due to Ukraine aid, student debt

3. Fed’s Musalem signals wary approach to cutting rates in debut speech

4. The Fed is ‘playing with fire’ by not cutting rates, says creator of ‘Sahm Rule’ recession indicator

5. Retail sales increase less than expected in May

Hong Kong

News Feed

1. Economy is set for steady rebound in Q2

2. China May retail sales beat expectations, but industrial output and fixed asset investment missed

3. China’s factory output disappoints, property sector stuck in doldrums

4. China’s surge in solar and hydro point to early carbon peak

5. Visa-free policy helps promote global exchanges

^ Back To Top

Genting Singapore Ltd (GENS SP): Summer vacation season

• BUY Entry – 0.87 Target– 0.93 Stop Loss – 0.84
• Genting Singapore Limited, through its subsidiaries, develops resort properties as well as operates casinos. The Company has casinos and integrated resorts in different parts of the world, including Australia, the Americas, Malaysia, the Philippines and the United Kingdom.
• Summer vacation preference. Agoda has identified the top international summer vacation spots for Indian travellers, with Bali, Singapore, Bangkok, Dubai, and Kuala Lumpur leading the list for May and June. The data shows a strong preference for Southeast Asian destinations, with Thailand, Indonesia, Singapore, and Malaysia being the most searched, followed by the UAE. This trend highlights Indian tourists’ interest in diverse cultural experiences, urban landscapes, and beaches. With Singapore being one of the top destinations, Resorts World Sentosa will be sure to attract more tourists during this busy summer season.

Genting Singapore Stock Seasonal Performance

(Source: Bloomberg)

• Momentum to continue. Genting Singapore reported a 91.5% increase in net profit for 1Q24, reaching S$247.4mn, up from S$129.2mn the previous year. Revenue rose by 61.9% to S$784.4 million. The boost is attributed to higher visitor numbers and tourism spending during the Chinese New Year and relaxed visa regulations between China and Singapore. Resorts World Sentosa plans to host more lifestyle events, such as Harry Potter: Visions of Magic, in 2H24 and is on track with new projects like Minion Land and Singapore Oceanarium, set to open in early 2025. Additionally, a new Waterfront development is expected to be awarded in 3Q24, and a new luxury hotel will launch in early 2025. RWS also signed an MoU with Sentosa Development Corporation and other partners to enhance RWS’s appeal as part of broader. government efforts to boost tourism, which saw receipts exceed S$27.2bn in 2023.
• 1Q24 results review. Total revenue for the year rose 62% YoY to S$784.4mn from the previous S$484.5mn in 1Q23. Net profit increased 92.0% to S$247.4mn from S$129.2mn. Its gaming segment revenue increased significantly by 69% YoY to S$576mn and its non-gaming segment revenue also rose 44% YoY to S$208.3mn.
• Market Consensus.

(Source: Bloomberg)

Singapore Airlines Ltd (SIA SP): Seasonal peak coming

• RE-ITERATE BUY Entry – 6.74 Target– 7.24 Stop Loss – 6.49
• Singapore Airlines Limited provides air transportation, engineering, pilot training, air charter, and tour wholesaling services. The Company’s airline operation covers Asia, Europe, the Americas, South West Pacific, and Africa.
• Summer vacation demand. Despite the high-ticket prices, there has been a significant rise in travel demand due to the start of the summer holidays and the lifting of travel restrictions. This trend is evident in the large summer schedules and new destinations offered by airlines, as well as the increased capacity by some airlines to meet the growing demand. The decrease in jet fuel prices, coupled with higher ticket prices resulting from increased demand, is set to bolster Singapore Airlines’ profit margins.

Jet Fuel Price Trend

(Source: International Air Transport Association)

• Raised FY24 profit expectations. The International Air Transport Association (IATA) has raised its 2024 profit forecast for airlines to US$30.5bn, up from US$27.4bn in 2023. Revenue is projected to grow 9.7% to nearly US$1tn, with a record 4.96bn passengers expected to fly this year. However, supply chain issues and high fuel costs may impact profitability, with a forecasted profit margin of just 3.1% for the year. The Asia-Pacific region is expected to see the most significant profit increase.
• Striving towards sustainability goals. Cathay Pacific and Singapore Airlines have teamed up to promote the use of sustainable aviation fuel (SAF) in the region. They signed a memorandum of understanding to work on sustainability initiatives, including joint procurement of SAF, advocating for supportive policies, and creating a standard global accounting and reporting framework for emissions reductions. They also agreed to exchange best practices for reducing single-use plastic, minimizing waste, and improving energy efficiency. This collaboration aims to accelerate and support the development of the SAF supply chain in the region. The collaboration will assist the airlines in advancing their environmental initiatives, aligning with the decarbonisation theme in the aviation industry.

SIA seasonal performance

(Source: Bloomberg)

• Established a commercial partnership. On 4 June, it was announced that Singapore Airlines and Riyadh Air, a new airline set to start flying in 2025, inked a memorandum of understanding for a partnership. The partnership will explore interline connectivity, codeshare arrangements, and reciprocal benefits for frequent flyer programme members. This collaboration is expected to offer Riyadh Air’s guests access to SIA’s network in South-east Asia and the South-west Pacific and allow SIA’s customers greater access to the Middle East region through Riyadh Air’s network. This partnership aims to offer more options, better connectivity, and greater benefits to customers of both airlines, as well as to enhance customer experience and cargo services.
• FY23/24 results review. Total revenue for the year rose 7.0% YoY to S$19,013mn from the previous S$17,775mn in FY22/23. Net profit increased 24.0% to S$2,675mn from S$2,157. SIA and Scoot carried a combined 36.4mn passengers, up 37.6% YoY and passenger traffic grew 26.6%, outpacing the capacity expansion of 22.9%. This resulted in SIA and Scoot registering record passenger load factors of 87.1% and 91.2% respectively. It declared a final dividend of S$0.38 per share.
• Market Consensus.

(Source: Bloomberg)

Uni-President China Holdings Ltd. (220 HK): Increasing ramen prices

• BUY Entry – 7.30 Target 7.90 Stop Loss – 7.00
• Uni-President China Holdings Ltd. is a Hong Kong-based investment holding company principally engaged in the manufacture and sales of beverages and instant noodles. It operates through three segments, including Beverages segment, Instant Noodles segment and Others segment. The Company’s beverage products include juice drinks, ready-to-drink tea, milk tea, coffee and bottled water, among others. Its instant noodles products include bowl noodles, packet noodles and snack noodles. The Company is also involved in the wholesales of forage and fertilizer, as well as the provision of catering services through its subsidiaries.
• To benefit from rising food prices. As food prices rise amidst China’s uncertain economy, people are increasingly turning to low-cost options like instant ramen. However, even instant ramen prices are climbing, as major manufacturers raise their retail prices, according to several media reports. Other food categories, including beverages, street food, fruits, and vegetables, have also seen price hikes due to rising costs of raw ingredients. This overall increase in food prices is driving consumers to choose cheaper alternatives instead of dining at more expensive places like restaurants. Uni-President China is bound to benefit from the increase in food prices as well as higher sales volume of instant products.
• Expanding presence. Earlier this year, Uni-President’s board authorized a share purchase to acquire full ownership of South Korea’s Woongjin Foods, increasing its stake from 79.32%. This acquisition aligns with Uni-President’s strategy to establish a large distribution platform in Asia and underscores its commitment to expanding into Northeast Asia.
• FY23 earnings. Revenue rose by 1.2% YoY to RMB28.6bn in FY23, compared to RMB28.3bn in FY22. Net profit rose 36.4% YoY to RMB1.67bn in FY23, compared to RMB1.22bn in FY22. Basic EPS rose 36.4% YoY to 38.6 RMB cents in FY23, compared to 28.3 RMB cents in FY22.
• Market consensus.

(Source: Bloomberg)

AAC Technologies Holdings Inc (2018 HK): Riding the tailwinds of Apple’s new features

• RE-ITERATE BUY Entry – 31 Target 37 Stop Loss – 28
• AAC Technologies Holdings Inc. designs, develops and manufactures a broad range of miniaturized components that include speakers, receivers and microphones in the acoustic segment. The Company produces these components for mobile devices such as smartphones, tablets, wearables, ultrabooks, notebooks and electronic book-readers.
• Siri updates incoming. Apple plans to enhance Siri with generative AI, enabling it to control various apps more effectively. This upgrade aims to improve Siri’s understanding of user intentions and app functionalities, addressing previous challenges. A potential deal with OpenAI may integrate ChatGPT’s technology into iOS 18, making Siri more intuitive and context aware. The update is expected to boost iPhone sales, especially as Apple faces competition in China and slower growth in the US. Siri will support more natural language, follow-up questions, and text input, while also performing tasks based on on-screen content and drawing on personal context for more complex actions. On 10 June, Apple released an improved version of Siri and introduced AI features to a few applications. The enhancements announced by Apple will necessitate new components for the handset from AAC Technology, which in turn will benefit its acoustic business revenue.
• iPhone sales to improve. According to analysts, the anticipated demand for Apple’s new AI features, known as Apple Intelligence, is expected to result in a substantial increase in iPhone sales. This could potentially trigger what is known as an “iPhone supercycle.” These features will only be available on the iPhone 15 Pro or newer models, which may prompt many current iPhone users to upgrade. Apple Intelligence, currently in beta, will be available on the iPhone 15 Pro, iPhone 15 Pro Max, and devices with M1 chips or later. It will be integrated into iOS 18, iPadOS 18, and macOS Sequoia. This development may lead to a surge in sales of the iPhone 16 and might also give rise to a new AI App Store, which would significantly impact Apple’s market and boost iPhone sales. An increase in iPhone sales would also result in the need for more components from AAC Technology, benefiting its top lines.
• FY23 earnings. Revenue fell by 1.0% YoY to RMB20,419mn in FY23, compared to RMB20,625mn in FY22. Net profit fell 9.9% YoY to RMB740mn in FY23, compared to RMB821mn in FY22. Basic EPS fell 8.3% YoY to RMB0.63 in FY23, compared to RMB0.69 in FY22.
• Market consensus.

(Source: Bloomberg)

The United States market is closed today in observance of a public holiday (Juneteenth). Trading resumes on Thursday, 20 June.

^ Back To Top

Trading Dashboard Update: Take profit on Sunny Optical Technology (2382 HK) at HK$52. Add Singapore Airlines Inc (SIA SP) at S$6.74. Cut loss on Advanced Micro Devices Inc (AMD US) at US$156.

^ Back To Top