FSMOne SG - Research Highlights

2021-12-16 15:19:53 Stock Idea

SMIC: Expect 85% upside potential from China’s number one semiconductor company

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• SMIC’s revenue surged by more than 30% to a record high of USD 1,415 million, mainly due to an increase in wafer shipments and average selling price.

• Citing strong demand, the company raised its 2021 full year revenue growth target for the second time this year to 39% year-over-year, up from the previous target of 30%.

• To meet the burgeoning demand for chips from domestic companies, SMIC is planning to launch three new fabs, which should increase its production capacity by more than 25% by 2024.

• Despite being on the Entity List, export licenses to SMIC had an approval rate of 91%, which shows that the company is not significantly affected by the sanctions.

• Our target price for SMIC is HKD 37, which represents an upside potential of close to 85%.

: Read the full article here
: SMIC (HKEX:981) Open / Comment

2021-12-15 13:58:47 In this week’s Bond Market Monitor, both the Reserve Bank of Australia and India are maintaining their interest rate.

Plus, updates on increase in yields of US Treasuries, and First REIT’s sale and purchase agreement with OUE Lippo Healthcare: https://bit.ly/3pKfmus Open / Comment

2021-12-13 14:33:37 ETF Q&A - Premia Dow Jones Emerging ASEAN Titans 100 ETF

Looking for economic growth beyond China and India? ASEAN is worth your consideration – the region has delivered an impressive three decades of +5% GDP growth and opportunities lie ahead.

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Association of Southeast Asian Nations (ASEAN) is comprised of 10 countries – Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, Brunei, Laos, Cambodia, and Myanmar. Because of their relatively smaller economies, most of these countries are not included in the major indices, and even if they are, they make up a small weight. Hence, most investors have little to zero exposure to these countries.

Yet, ASEAN holds significant growth opportunities, having one of the largest and youngest populations in the world, with a collective GDP growing at a rate of 5-6% for the past four decades, just behind China and India. Given its immense growth potential, investors should not overlook ASEAN.

: Read the full article here
: Premia Dow Jones Emerging ASEAN Titans 100 ETF (HKEX: 2810/9810) Open / Comment

2021-12-13 03:30:50 As the construction and hospitality sectors continue to pick up, the recovery will be beneficial to Heeton. We continue to hold a positive credit outlook on the Singapore-based property developer: https://bit.ly/3DO5Mfe Open / Comment

2021-12-10 13:29:10 Macro Research

US equities 2022 outlook: Can S&P 500 continue its run?

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• Valuations are stretched, leaving little room for risk. S&P 500 Index is trading at (i) a 28% premium to its historical average and (ii) at larger-than-average premiums relative to other DMs. Risks for a valuation contraction has risen and earnings disappointment could be a likely trigger.

• While earnings have rebounded significantly this year (51% YoY), growth has likely peaked and should normalise moving ahead. US companies are also facing mounting cost pressures from higher wages and material costs which will pressure margins in the coming quarters.

• Earnings revision momentum is running out of steam. Positive earnings revisions for S&P 500’s top five largest sectors (by earnings contribution), have started to flatten in the last quarter. Big Tech is increasingly at risk of earnings disappointment which can pose a risk to aggregate US equity performance.

• Elevated valuations should limit upside potential. We project a target price of 4940 for S&P500 index by end-2023 which implies a 5% upside potential. US equities are increasingly less attractive and we maintain a 2.5 Stars “Neutral” rating for the region.

: Read the full article here Open / Comment

2021-12-10 03:45:39 Evergrande has been paying its coupons at the last hour, but can bondholders remain optimistic about the Group meeting its financial obligations? https://bit.ly/3xYg0Z2 Open / Comment

2021-12-09 13:17:50 Stock Idea

JD.com: Reiterating our buy call on stellar 3Q21 earnings and promising outlook

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• We like JD.com because they push boundaries in the digitalisation of retail and logistics, and their moat in high-tech integrated supply chain capabilities poises the company for growth.

• JD’s 3Q21 results were strong, which adds confidence to our investment case on JD, and we reiterate our recommendation to investors on JD.

• Furthermore, JD’s continued innovation in digitalisation coupled with its supply chain competitive edge gives the company strength to capture growth in the fast-growing grocery e-commerce segment.

• Our target price for JD.com (HKEX: 9618) is HKD 477, which gives investors an attractive upside potential of 55% at closing price of HKD 307 as of 8 December 2021.

: Read the full article here
: JD.com (HKEX:9168) Open / Comment

2021-12-07 03:31:22 In this week’s Bond Market Monitor, the European Banking Authority warned banks to prepare for an economic outlook deterioration or inflationary pressure.

Plus, updates on China Aoyuan’s rating downgrades and Evergrande’s ability (or not) to meet financial obligations: https://bit.ly/3xXQAuw Open / Comment

2021-12-06 03:33:56 All you need to know for our 2022 market outlook – investment grade, high yield and Chinese real estate bonds: https://bit.ly/3lywMJk Open / Comment

2021-12-03 13:41:46 Macro Research

iFAST 2022 Outlook: The Show Must Go On

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• We think that equities will outperform fixed income in 2022, especially as inflation is set to go higher and the Fed is likely to hike rates in 2022.

• Equities: In the DM space, we favour European and Japanese over US equities. In the EM space, we like Hong Kong and Chinese equities - in particular, we see more than 40% upside for the Hang Seng Index by end-2023.

• Bonds: Investing in Fixed Income remains challenging, particularly in a rising yield environment. We think the Asian High-Yield looks attractive, and recommend that investors opt for an active approach in this sector.

• Key Sectors: We think a global economic recovery is supportive of value and cyclical sectors, especially Financials (Global and Chinese Financials). Investors should also consider investments in the Digital Economy (though valuations are not as attractive) due to their disruptive nature.

: Read the full article here Open / Comment