30 September 2022: Genting Singapore (GENS SP), TRIP.COM (9961 HK)
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Genting Singapore (GENS SP): “Rooms” are hot
- RE-ITERATE BUY Entry – 0.780 Target – 0.835 Stop Loss – 0.750
- Genting Singapore is best known for its award-winning flagship project Resorts World Sentosa, one of the largest fully integrated destination resorts in South East Asia. Genting Singapore is one of the constituent stocks of the FTSE Straits Times Index.
- Hotel prices hit a 10-year high. Singapore hotel room prices exceeded the pre-Covid level and hit a high in almost a decade in July 2022. As of July, the average room rate reached S$259/night, up c.70% YoY. The strong demand was driven by the increase in visitor arrivals amidst easing Covid-19 restrictions. Visitor arrivals in Singapore rose for the sixth straight month in July to 726,601, up from 543,733 in June, according to the tourism board.
Singapore hotel room price by tier
(Source: Singapore Tourism Analytics Network)
- Upcoming high-profile events pushing hotel prices higher. This week, hundreds of chief executives, crypto investors and innovators, and even a Bollywood star are flying in for a series of high-profile Mice events. The Singapore Tourism Board mentioned that nearly 90,000 delegates would be expected to attend about 25 Mice events around this period, similar to the number of events held pre-Covid-19. Some of the events held this week include the crypto conference – Token2049, the 20th Forbes Global CEO Conference, the ninth annual Milken Institute Asia Summit and the inaugural edition of the Time100 Leadership Forum. A number of these events will be held concurrently with the Formula One Grand Prix, taking place between Friday to Sunday. The entertainment lineup this weekend includes performances by Marshmello, Westlife and Green Day. Other big names in entertainment coming to Singapore later this year include Justin Bieber, Maroon Five, Guns N’ Roses and Jay Chou.
- Updated market consensus of the EPS growth in FY22/23 is 82.1%/60.7% YoY respectively, which translates to 28.2x/17.5x forward PE. Current PER is 53.1x. Bloomberg consensus average 12-month target price is S$0.95.
(Source: Bloomberg)
DBS Group Holdings Ltd (DBS SP): Tailwinds from rate hikes
- RE-ITERATE BUY Entry 33.0 – Target – 34.5 Stop Loss – 32.3
- DBS Group Holdings Limited and its subsidiaries provide a variety of financial services. The company offers mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage services. DBS Group also is the primary dealer of Singapore government securities. DBS Bank Ltd operates as a bank offering wealth management, personal, and business banking services. DBS Bank serves customers worldwide.
- Housing loan rate adjustments. After the recent rate hike from the United States Federal Reserve, DBS announced that it would temporarily cease its fixed-rate home loans as the loan rates on these packages are being reviewed. The bank however continues to offer floating rate packages which are pegged to the SORA. By putting a pause on fixed-rate home loan packages in this volatile interest rate market, they are mitigating their risks and passing them on to their borrowers.
- Benefiting from higher Interest rates. With the constant rise in interest rates, DBS will be able to increase its margins when lending money to borrowers. Additionally, by taking advantage of the difference between the interest paid out to lenders and the interest earned from short-term investments, their profits will grow.
- Expansion of services. With the rapid boom of the cryptocurrency sector and the surge in the volume of crypto transactions carried out on its members-only platform, DBS recently expanded access to its crypto trading services. It announced the roll-out of self-directed crypto trading on DBS digibank, enabling 100,000 of the bank’s wealth clients who are accredited investors to trade cryptocurrencies on the DBS Digital Exchange (DDEx) at their convenience. These clients will be able to trade four cryptocurrencies – Bitcoin, Bitcoin Cash, Ether and Ripple – on DDEx with a minimum investment of S$500.
- The updated market consensus of the EPS growth in FY22/23 is 15.2%/18.7% YoY, respectively, translating to 11.1×/9.4x forward PE. The current PER is 12.8x. Bloomberg consensus average 12-month target price is S$39.31.
(Source: Bloomberg)
TRIP.COM (9961 HK): Japan, Taiwan, and Hong Kong reopen
- RE-ITERATE Buy Entry – 218 Target – 235 Stop Loss – 210
- Trip.com Group Limited, formerly Ctrip.com International, Ltd., is a travel service provider in China that provides accommodation booking, transportation ticketing, package tours and corporate travel management. The company aggregates hotel and transportation information to help leisure and business travellers make reservations. The company helps leisure travellers book travel packages and guided tours and helps corporate clients manage their travel needs. The company also offers a range of travel-related services to meet the different booking and travel needs of leisure and business travellers, including visitor reviews, attraction tickets, travel-related financial services, car services, travel insurance services and passport services. The company also offers package tours for independent leisure travellers, including tour groups, semi-tour groups and private groups, as well as package tours that require different transportation arrangements (such as cruise, buses or self-driving).
- Tailwinds of Asia tourism. Japan will fully reopen to foreign tourists from 11th October onwards. Tourists will no longer need a visa to enter the country. Taiwan will reopen its borders from 13 October onwards. Arrivals will be asked to self-monitor for seven days. From 26 October, travellers arriving in Hong Kong will no longer have to go into mandatory hotel quarantine.
- 2Q22 results review. Net revenue dropped by 32% YoY and 2% QoQ to RMB4.0bn due to the continued disruptions resulting from the COVID-19 resurgence in China. Gross profit dropped by 35.0% YoY and 0.2% QoQ to RMB3.0bn. Net profit attributable to company shareholders was RMB69mn compared to a net loss of RMB647mn during the same period in 2021 due mainly to effective cost control.
- Updated market consensus of the EPS in FY22/23 is RMB1.55/RMB7.14 respectively, which translates to 121.0x/26.3x forward PE. Bloomberg consensus average 12-month target price is HK$262.31.
(Source: Bloomberg)
Tsingtao Brewery Company Limited (168 HK): A FIFA World Cup themed play
- RE-ITERATE Buy Entry – 70 Target – 80 Stop Loss – 65
- Tsingtao Brewery Company Limited, together with its subsidiaries, engages in the production, distribution, wholesale, and retail sale of beer products worldwide. The company sells its beer products primarily under the Tsingtaoand and Laoshan brand names. It also provides wealth management, and agency collection and payment services; and financing, construction, and logistics services, as well as technology promotion and application services.
- FIFA World Cup Qatar 2022 in two months. The once in every four years FIFA World Cup is going to take place from November to December 2022. This is the global largest sports event after the Tokyo Olympic Games, and it is expected to attract a record high of spectators as most countries have eased COVID restrictions. Accordingly, it will stimulate sales of alcohol and other drinks. The beer feast will take place during the world cup period.
- 1H22 earnings review. Revenue grew by 5.4% YoY to RMB19.3bn. Gross profit dropped by 9.6% YoY to RMB7.3bn. GPM dropped by 6.3ppts to 38.1%. Net profit attributable to shareholders of the company grew by 18.1% YoY to RMB2.9bn. NPM increased by 1.3ppts to 14.8%. The growth of the bottom line was due mainly to the upgrade of the product mix and improvement of cost control.
- The updated market consensus of the EPS growth in FY22/23 is 1.5%/17.1% YoY, respectively, translating to 27.4×/23.4x forward PE. The current PER is 24.4x. Bloomberg consensus average 12-month target price is HK$89.35.
(Source: Bloomberg)
United States
Top Sector Gainers
| Sector | Gain | Related News |
| Other Metals/Minerals | +0.80% | Copper Rebound Chances Fade on Weak Demand and Rising Supply Freeport-McMoRan Inc (FCX US) |
| Property/Casualty Insurance | +0.56% | Hurricane Ian’s Devastation Shows the Challenge of Pricing Climate Risk Chubb Ltd (CB US) |
| Oil & Gas Production | +0.38% | Oil settles lower after hitting $90/bbl as OPEC+ considers output cut ConocoPhillips (COP US) |
Top Sector Losers
| Sector | Loss | Related News |
| Motor Vehicles | -5.87% | Why Tesla Shares Tanked Today Tesla Inc (TSLA US) |
| Telecommunications Equipment | -4.56% | Apple downgrade sparks tech sell-off, sending Alphabet and Microsoft to one-year lows Apple Inc (AAPL US) |
| Semiconductors | -3.50% | Semiconductors plunge as PC weakness continues, BofA downgrades Apple NVIDIA Corp (NVDA US) |
- Apple Inc (AAPL US) shed 4.9% following a rare downgrade by Bank of America. The bank downgraded shares of the iPhone maker to neutral and cut its price target to $160 a share from $185, citing macroeconomic challenges ahead.
- Carmax Inc (KMX US) plummeted 24.6% after it released second-quarter earnings below analyst expectations before the bell. The company’s earnings per share dropped to $0.79, down about 54% from a year ago.
- Coinbase Global Inc (COIN US) shares slid 8.0% after Wells Fargo initiated coverage of the cryptocurrency company with an underweight rating and said a tough economic environment could hurt shares and profitability going forward.
- Peloton Interactive Inc (PTON US) tumbled 14.4% after the company announced it will sell its equipment at Dick’s Sporting Goods, a deal that marks its first brick-and-mortar partnership. Peloton has been struggling to expand its customer base and stem its losses as people return to life outside their homes, after its share price ballooned in the pandemic.
- Rite Aid Corp (RAD US) slumped 28.0% after Rite Aid slashed its earnings guidance for the full year and posted a wider-than-expected loss for the quarter.
Singapore
- Keppel Corp Ltd (KEP SP) rose 2.5% yesterday. Keppel Shipyard announced on Wednesday that it secured a repeat contract for a newbuild floating production, storage and offloading vessel worth about US$2.8 billion ($4 billion). The tender for this contract was from Brazil’s national oil company, Petroleo Brasileiro (Petrobras). The contract will see Keppel offshore and marine undertake the engineering, procurement and construction of a P-83 FPSO vessel. With this order, Keppel’s O&M unit will see its order book increase to $11.8 billion.
- Golden Agri-Resources Ltd (GGR SP) rose 1.9% yesterday. Malaysian palm oil rebounded on Thursday after plunging to a near 20-month low in the previous session, buoyed by expectations for solid exports data and a weaker ringgit. The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange rose 3.63% to 3,343 ringgit ($721.56) per tonne by the end of the afternoon trade, having hit its lowest level since early February 2021 on Wednesday. The Malaysian ringgit MYR slipped to a record low on Thursday, making palm oil cheaper for buyers holding the U.S. currency.
- SATS Ltd (SATS SP) plunged 20.7% yesterday, following the company’s deal to buy the world’s largest air cargo handler for $1.64 billion. The ground handling and catering provider announced on Wednesday it will acquire Paris-based Worldwide Flight Services. The combined entity’s network will cover trade routes responsible for more than 50 percent of global air cargo volume.
- Golden Energy & Resources Ltd (GER SP) and Geo Energy Resources Ltd (GERL SP) slid 5.1% and 4.1% respectively yesterday. Coal prices fell by 0.38%. Chinese coal production over the first eight months of the year reached 2.93 billion tonnes, up 11% on the same period last year, offsetting a decline in imports. The country has also raised annual production capacity at its coal mines by 490 million tonnes since last year.
Hong Kong
Top Sector Gainers
| Sector | Gain | Related News |
| Real Estate Investment Trust | +0.86% | Link Reit eyes more property in Australia, entry into Japan and Singapore, as it seeks to diversify from Hong Kong Link REIT (823 HK) |
| Conglomerates | +0.41% | HSBC, Alibaba lead Hong Kong stock rebound from 11-year low as China defends yuan and global markets halt slump CITIC Ltd (267 HK) |
| Restaurants & Fast Food Shops | +0.04% | China Stock Traders Seek Golden Week Boost After Brual Selloff Yum China Holdings Inc (9987 HK) |
Top Sector Losers
| Sector | Loss | Related News |
| Dairy Products | -2.89% | China’s Dairy Imports Slow along with Economy China Mengniu Dairy Company Limited (2319 HK) |
| Airline Services | -2.83% | China’s COVID worries to take shine off Golden Week holiday Cathay Pacific Airways Ltd (293 HK) |
| Automobiles & Components | -2.66% | Chinese EV Maker Leapmotor Tumbles in Hong Kong Trading Debut BYD Co Ltd (1211 HK) |
- Weibo Corp (9898 HK) rose 8.5% yesterday. The outlook of some Chinese industries from internet to property has turned brighter as much of the bad news has been priced in, according to HSBC Holdings Plc., joining a debate among global investors over the health of the world’s No. 2 stock market. HSBC identified four promising sectors in China, including internet firms with better-than-expected earnings growth.
- Zhejiang Leapmotor Technology Co Ltd (9863 HK) slumped 33.5% yesterday in its first day of trade in Hong Kong, dimming the outlook for a pick up in deal activity in the city for the rest of the year. The Hangzhou-based firm is debuting in the Asian financial hub during a grim week for equities trading globally, with volatility jumping after hawkish comments from Federal Reserve policymakers and a surge in Treasury yields. Leapmotor is part of an industry that has largely escaped the scrutiny of Chinese regulators, whose spotlight has hobbled the nation’s broader technology sector and put a damper on share sales overseas.
- Country Garden Holdings Co Ltd (2007 HK) and China Jinmao Holdings Group Ltd (817 HK) fell 11.6% and 9.0% respectively yesterday. China’s real estate should be a point of concern for investors, short-seller Jim Chanos, founder of Chanos & Company, said at an investing conference on Wednesday. Woes in China’s property market worsened in August, with official data showing home prices, sales and investment all falling, adding pressure on the country’s economy.
- Dongfeng Motor Group Co Ltd (489 HK) fell 8.1% yesterday. China-based lithium-ion battery cell and module maker Sunwoda Electronic will set up a factory of Li-ion battery cells, modules, and packs for use in electric vehicles in central China on a joint-venture basis with China-based automaker Dongfeng Motor. Sunwoda Electric Vehicle, Dongfeng Motor, and Dongfeng Hingtai will together invest CNY 12.0 billion (US$1.68 billion) for 51%, 35%, and 14% stakes respectively for the factory.
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