FSMOne SG - Research Highlights

2021-09-14 03:38:41 In this week’s Bond Market Monitor, Bank of Canada and Bank Negara Malaysia are maintaining their overnight rate at 0.25% and 1.75% respectively.

Plus, updates on China Huarong’s downgraded ratings, Evergrande’s dollar bound rebound and Oxley’s bond re-opening proposal: https://bit.ly/3nrvhhz Open / Comment

2021-09-13 03:39:32 Stock Idea

Why Xiaomi is in a great position to become the world's #1 smartphone maker

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• While smartphones often come to mind whenever the Xiaomi brand is mentioned, the company also operates in other fast-growing business segments including IoT and lifestyle products as well as internet services.

• As of 2Q 2021, Xiaomi has become the world’s second largest smartphone maker. With an expanding premium smartphone portfolio as well as growth opportunities in mainland China and Europe, the company could be on track to reach the number one position.

• Meanwhile, it holds the market leading position in mainland China for AIoT thanks to a value-for-money proposition. The seamless connectivity of Xiaomi’s products has also successfully led to increased user stickiness.

• Supported by a growing user base, the company’s internet services segment will be an important driver of margin expansion and earnings in the longer term. Its ecosystem strategy creates cross-selling opportunities, lowering customer acquisition cost.

• Based on our fair PE ratio of 25X, our target price for Xiaomi is HKD 38. This represents an upside potential of 61%.

: Read the full article here
: Xiaomi (HKEX:1810) Open / Comment

2021-09-10 05:50:20 Faced with a liquidity crisis and USD 600mil due to bondholders in two days, Suning is offering a bond proposal with a consent fee and extended maturity date. Here’s what you need to know: https://bit.ly/3zSDQ8F Open / Comment

2021-09-08 04:17:37 In this week’s Bond Market Monitor, the Chinese real estate sector is dragging down the Barclays USD Asia High Yield Bond Index heavily, and more updates: https://bit.ly/3tmIOIf

Owner of popular shopping malls Wisma Atria and Ngee Ann City, Starhill Global REIT is tapping markets with a fairly priced SGD issue. It matures in 7 years and offers a FPG of 2.23%: https://bit.ly/3zJGk9j Open / Comment

2021-09-07 13:04:09 Thematic Portfolio

Ride the telecommuting wave with our new Remote Work thematic portfolio

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• Thematic investing is all about identifying long-term trends and the investments that stand to benefit from them.

• This year, we have added Remote Working and Environmental Sustainability to our line-up of thematic portfolios.

• While the COVID-19 pandemic seems to be easing, thanks to an efficient vaccine roll-out program, many firms are making plans to shift to permanent remote working after witnessing the cost savings and productivity that remote working has brought about.

• For the Remote Working portfolio, we have identified five key industries that will stand to benefit from this change in behaviour: cybersecurity, e-commerce, warehouse and logistic services, digital entertainment, and technology companies that offer collaboration and productivity solutions to facilitate remote working.

• As of 7 September 2021, the Remote Working portfolio is trading a forward PE of 52.3X, PB of 3.1X, while offering a dividend yield of 0.7%.

: Read the full article here Open / Comment

2021-09-07 04:04:09 The world's most indebted real estate developer just published their interim report this week. Here's what you need to know about it: https://bit.ly/2Vb1zSk Open / Comment

2021-09-06 13:43:48 Stock Idea

Betting on the smart car revolution and smartphone camera upgrade cycle? Buy Sunny Optical

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• Since the start of the crackdown on the Chinese technology sector, Sunny Optical is among the rare few that has been holding up well.

• Management remains optimistic about the multi-camera upgrade cycle in the longer term, and believe it is likely to resume by 2022 or 2023. 

• Sunny Optical will also benefit from strong growth in vehicle-related shipments in the coming years as more ADAS solutions are commercialised and adopted by car manufacturers.

• Given the high-margin and high-growth nature of the vehicle business, we have decided to upgrade our fair PE multiple to 25X (previously 23X).

• We continue to hold a positive view on Sunny Optical and we believe there is still ample room for the company to grow.

: Read the full article here
: Sunny Optical (HKEX:2382) Open / Comment

2021-09-03 15:31:35 There is a silver lining amidst the spread of inflation woes – banks are poised to capitalise on rising interest rates with improved margins. Societe Generale provides great value for investment with their strong earnings: https://bit.ly/3kLtGAq Open / Comment

2021-09-01 12:45:00 Macro Research

Semiconductors: Downgrade to 2.5 Stars “Neutral” on lofty valuations and greater near-term risks

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• Semiconductor companies enjoyed their recovery this year as strong sales momentum drove share prices to a new high.

• Although chipmakers are benefitting from higher prices due to the shortage of chips, we do not expect the current situation to last forever as demand gradually normalises.

• Massive investment plans by chipmakers and governments across the world could lead to excess capacity in the future.

• With valuations starting to look a little lofty in the near term, we have decided to downgrade the semiconductor industry from 3.0 Stars “Attractive” to 2.5 Stars “Neutral”.

: Read the full article here
: VanEck Vectors Semiconductor ETF (NASDAQ:SMH) Open / Comment

2021-08-30 12:41:04 Macro Research

Singapore: What’s next for the Straits Times Index?

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• Earnings for most companies in the STI have rebounded after a steep decline last year. We expect a robust earnings rebound (48% YoY) in ‘21 and ’22 (14% YoY), driven by the banks, capital goods industry, industrial REITs, developers as well as travel and tourism-related names.

• With the STI’s valuation being undemanding, we see scope for re-rating in the near term thanks to i) a high vaccination rate and soon-to-achieve herd immunity, as well as ii) a robust economic recovery.

• However, we remain reserved on Singapore’s longer-term outlook. From the macro front, there is also a lack of longer-term upside catalyst once Singapore’s exports strength fades.

• Nevertheless, we believe the risk-reward for Singapore equities is more favourable in the near term (’21 – ’22). However, we remain neutral and cautious on the longer-term outlook. Our team projects an upside potential of 22% by end-’23.

: Read the full article here
: Active approach - Nikko AM Singapore Dividend Equity SGD; Passive approach - SPDR STI ETF (SGX:ES3) Open / Comment