Singapore

• AEM (AEM SP) published dismal 1Q24 results and kept its modest guidance for 1H24.
• AEM has announced new customer wins going into FY25 which should improve results materially next year. The sell-side has downgraded estimates aggressively making room for upside surprises next year.
• AEM has seen an implosion in investor confidence because of the inventory issues, and slow orders from its key customer Intel Corp (INTC US). Long-term investors should accumulate here. 

Yesterday, Lippo Malls Indonesia Retail Trust (LMIRT) launched an exchange offer for the USD 7.25% 2024 notes maturing on June 19th, with an outstanding amount of USD 138.4 mn. The company has offered to exchange each of the USD 1,000 principal of the notes for USD 432 of USD 7.5% 2026 notes and a USD 600 cash payment. The funding will come from a credit facility of up to IDR 1.5 tn.

We recommend that holders of the 2024 notes participate in the offer. Considering that it requires 70% of holders to take part, holding out could cause the transaction to fall through, with LMIRT then defaulting on the notes.

• We expect Singapore Airlines to report a disappointing 4Q24 on 15 May, as earnings normalisation continues.
• Inflationary pressure is a key theme at SIA, with it suffering one of the highest levels of inflation in the APAC region.
• Our forecasts for FY25, which suggest further earnings normalisation, are c.20% below consensus at the operating level.

• Institutions were net buyers of Singapore stocks over the four trading sessions through to May 2, with S$12.9 million of net institutional inflow, as 17 primary-listed companies conducted buybacks with a total consideration of S$28.4 million.
• Leading the net institutional inflow over the four sessions were DBS, UOB, Seatrium, City Developments, UOL Group, iFast Corporation, Singapore Tech Engineering, Singapore Exchange, Cortina Holdings, CapitaLand Integrated Commercial Trust and Hongkong Land Holdings.
• For the month of April, Singapore stocks booked S$225 million of net institutional inflow, following S$1.15 billion of net institutional outflow in Q1.

• Source: SGX, Bloomberg (data as of 31 March 2024).
• This is probably why the ETF industry exceeded US$11 trillion in global assets under management (AUM) in 2023, after growing 24 per cent year on year since the end of 2022, according to data from ETFGI.
• The Phillip SGX APAC Dividend Leaders REIT ETF tracks the iEdge APAC ex-Japan Dividend Leaders REIT Index, which consists of 33 REITs across Australia (52 per cent by geographical breakdown), Singapore (36 per cent), and Hong Kong (12 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 Karawaci
• Lippo Malls Indonesia Retail Trust
• MGM China Holdings
• SK Hynix

• Ohmyhome Property Management continues to increase the number of residential units managed.
• The business unit managed 6,746 residential units as of December 31, 2023, up about 45% compared to some 4,648 units at the end of 2022, according to the company’s filings, and up from 2,962 at the end of 2021.
• The goal is to continue to increase the number of units under management, which Ohmyhome believes will contribute to consolidated revenue growth.

• We are initiating coverage of Webuy Global (WBUY) with a $0.85 target valuation.
• Webuy Global is a community-based buying group platform that sells groceries, fresh produce, and packaged travel tours through its app in Indonesia and Singapore.
• The company is attempting to leverage its customer relationships to expand into additional markets where group buying has shown promise, like insurance.

• Q1 FY24 revenues/profits were up 5.5%/9.3% YoY as inflationary pressure in Singapore force consumers to adopt cost-cutting measures like eating at home and shopping in supermarkets with value for money.
• Cash continued to pile on the balance sheet with >350 mn SGD ( now almost 15% of market capitalization). Capital allocation (besides a 70% pay out ratio) is key now. 
• Trading at 16.5x PE with ROEs consistently over 25% and a dividend yield of 4.3%, this is one of the rare quality companies in Singapore worth exploring 

• Although Shein has yet to formally announce the listing destination, there is a growing anticipation that the listing venue could be London, rather than New York. 
• It has been reported that the company has more than doubled its net profit to more than US$2 billion in 2023. 
• The company is currently seeking a corporate value of nearly US$70 billion to US$90 billion in the Shein IPO which would be one of the biggest IPOs globally in 2024. 

• LHT, Bumitama and JB Foods directors add to stakes City Developments again led the buyback consideration tally for the week, acquiring 2,439,900 shares at an average of S$5.93 per share.
• Between Apr 19 and 23, LHT Holdings managing director Yap Mui Kee acquired 138,000 shares at an average price of S$1.186 per share.

• In Smartkarma Corporate Webinar | Elite Commercial REIT: Essential Assets at an Attractive Yield we conducted a fireside chat with Elite Commercial REIT.
• Elite Commercial REIT is a Singapore real estate investment trust established with the investment strategy of principally investing, directly or indirectly, in commercial real-estate related assets in the United Kingdom.
• The company has recently expanded its strategy to look at other commercial assets in the UK, beyond its existing portfolio of assets rented by the UK government.

This Insight is part of the Smartkarma Corporate Webinar series, supported by SGX through the Investor Education Fund.

• Jardine Cycle & Carriage (JCNC SP)‘s current implied stub value is around its highest-ever level.
• The simple ratio of JCNC/Astra International (ASII IJ) is at its highest level outside the 2008 GFC.
• A weak Indonesian rupiah is likely a factor. Still, JCNC is trading rich to its NAV. A takeover from parent Jardine Matheson Holdings (JM SP) is idealistic.

• CapitaLand is a real estate investment manager with funds under management of c.S$100b and core markets being Singapore, China and India
• They reported solid FY2023 results earlier this year.  Singapore and India are showing strong market outlook while China struggles.
• Valuation is attractive with >50% upside and we view there are multiple catalysts ahead

• Plato Capital chairman Lim Kian Onn boosts his stake Digital Core Reit Management bought back 210,000 units of Digital Core Reit.
• On Apr 12, Plato Capital chairman and non-executive non-independent director Lim Kian Onn acquired 283,000 shares at an average price of S$2.21 per share.

• Since the end of 1Q24, Jardine C&C has gained 10%.
• Jardine C&C also maintains a Refinitiv Consensus Estimates Target Price of S$27.08, an ROE of 16% and P/E of 6x.
• Like Jardine C&C, the past three weeks has seen Silverlake Axis partially reverse share price declines in 1Q24.

• Keppel Pacific Oak US REIT 17-Apr CapitaLand Integrated Commercial Trust 19-Apr 19-Apr Keppel Pacific Oak US REIT reported a 0.8 per cent year-on-year decline in net property income (NPI) in the first quarter ended Mar 31, 2024 to US$21 million, from US$21.2 million in Q1 2023.