Singapore

• DBS is now guiding for no profit growth during FY24. This may end up missing with negative growth more statistically likely, in a worsening world.
• Credit metrics are not particularly positive in today’s release with SGD215m of credit costs compared with SGD72m in the preceding quarter.
• If rate rises are done or nearly done, than the main positive delta of DBS earnings are also done or nearly done. Management guidance suggests as much too.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Lippo Malls Indonesia Retail Trust’s ESG as “Adequate”, in line with its Environmental and Social scores. We deem Governance as “Weak”, despite the “Adequate” score in quantitative terms. Controversies are “Immaterial” and Disclosure is “Adequate”.

• AEM (AEM SP) will report 3Q23 results on 10/11/23. This will be the first loss-making quarter since 4Q14.
• We expect a loss as AEM will have to recognize the 26.7M SGD arbitration expense to settle with Advantest Corp (6857 JP). 
• Investors will be looking for an early read on the FY24 outlook to determine if AEM’s stock has bottomed.

• The MAS is not at all happy with the frequent digital banking services outages at DBS (DBS SP). There will be fines and higher required capital. 
• The outlook for the home market lending is already poor, with negative loan growth in recent months. Probes of money laundering will likely make lending even more sparse.
• UOB (UOB SP) , Standard Chartered (STAN LN) , HSBC Holdings (HSBA LN) results are all illustrative of risks facing DBS (DBS SP) before results come out, especially credit costs.

• This update builds upon our initial report on the APAC Luxury Industry, in which we expressed our belief that potential opportunities lie within the small niches of the luxury sector.
• While the share price performance hasn’t met our expectations, the broader trend we highlighted, Luxury Travel and Tourism, has shown robust growth.
• Even though travel flows have returned to pre-pandemic levels, Shiseido has not yet regained its pre-pandemic performance, however the two hotels are already operating at levels close to 2019 levels.

• Temasek raised around US$300m via its secondary selldown in Singapore Airlines (SIA SP) in Jun 2023. The lockup from that placement will expire soon.
• Temasek still owns over 50% of SIA and hence, any selldown might not come before SIA reports its 1H23/24 results in mid-Nov 2023.
• In this note, we talk about the placement lockup dynamics.

• UOB (UOB SP) just released their 3Q23 results, with their IR documents attached below. Our interpretation of their numbers is less positive than their own presentation.
• Credit growth is faltering, with worsening NIM in QoQ, and with what appears to be topping out net interest income. Citi integration costs remain an issue.
• Underlying credit metrics with worse recoveries and worse new NPAs are not positive, nor is the 126% rise YoY in credit costs in 3Q23.  Will this improve in 4Q23?

• 400+ days ago, the TCC Group bid for Frasers Hospitality Trust (FHT SP) at just over 1.05x NAV failed on a combination of vocal minority opposition and minority apathy.
• FHT has dramatically outperformed plummeting peers over the last few months on hope TCC might re-up that bid, but weaker peers and CRE markets suggest financing could be tougher.
• Nothing is impossible, but it might make more sense for TCC to up its stake by stealth here rather than brute force. Earnings are 7 November.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Lippo Malls Indonesia Retail Trust
• Vedanta Resources

• REIT Watch – Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than markets had anticipated, leading to higher expectations that the Federal Reserve will likely implement one more interest rate hike before the year ends.
• The three S-Reits with the lowest gearing ratios are: Sasseur Reit (26.2 per cent), Frasers Logistics & Commercial Trust (28.6 per cent) and Paragon Reit (29.8 per cent).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Lippo Malls Indonesia Retail Trust
• Tata Motors ADR

• Wing Tai chairman Cheng Wai Keung continues building deemed interest Heavy lifting specialist Sin Heng Heavy Machinery also bought back 648,200 shares at an average price of S$0.49 per share.
• Wing Tai Holdings chairman and managing director Cheng Wai Keung continued to build his deemed interest in the company, through his spouse Helen Chow acquiring shares.

• Southeast Asian SME digital finance platform Funding Societies (known as Modalku in Indonesia) has secured US$27 million in debt funding led by AlteriQ Global. 
• Aument Capital Partners (ACP) and Orange Bloom also invested.
• The funds will be channelled via the fintech startup’s tailored financing solutions to support the underserved SME segments in its five markets.

• Singapore-based insurtech company bolttech has raised US$50 million from impact investor LeapFrog Investments, bringing its total Series B round to US$246 million.
• bolttech will use the new capital to grow in emerging markets and expand its technology-enabled ecosystem for protection and insurance for emerging consumers.
• LeapFrog’s track record with tech-enabled insurance businesses in Africa and Asia will help bolttech to target its products to these growing markets.

• Singapore-based biotechnology startup Automera has secured US$16 million in a Series A round of investment co-led by early-stage life science accelerator and investment firm Accelerator Life Science Partners (ALSP) and Temasek-backed venture builder ClavystBio.
• EDBI, Xora Innovation, and other undisclosed investors also participated.
• Automera was established by Associate Professor Michael Lazarou, Loong Wang, and Taiyang Zhang at Talo Labs in collaboration with ALSP.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Hongqiao
• Sunny Optical Technology Group
• Yanlord Land