The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0326 GMT - Petronas Chemicals' 4Q core profit could rebound sharply to MYR1 billion from a loss of MYR775 million in 3Q, partly supported by stronger dollar against the ringgit, CGS International analyst Raymond Yap says in a note. Its JV unit, Pengerang Petrochemical Company, is set to declare its commercial operations date by Dec. 1. PPC will qualify for a "special discount" on feedstock purchases from Pengerang Refining Company, a JV between Petronas and Saudi Aramco, if it remains unprofitable at the Ebitda level, he says. This discount could help reduce PPC's 4Q losses, he adds. Yap sees potential for near-term gains, with the stock poised to rebound from low valuations. CGS International raises Petronas Chemicals' rating to add from hold but lowers the target price to MYR5.18 from MYR5.70. Shares are 1.7% higher at MYR4.91 (yingxian.wong@wsj.com)
0322 GMT - NIO may need a longer time to turn profitable with its retail promotions weighing on vehicle prices and revenue, Morningstar analyst Vincent Sun writes in a note. The Chinese automaker's 3Q vehicle delivery rose 12% but vehicle price dropped 14% and revenue fell 2%, Sun says. The higher-than-expected marketing expenses and research spending offset its gross margin improvement during the quarter. Morningstar pushes back NIO's breakeven estimate by a year to 2027. The brokerage also cut its fair value estimate on the stock's ADR to $6.80 from $7.60. The ADRs last closed at $4.70. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0219 GMT - An expected improvement in Frencken Group's earnings growth is likely pushed back to 2H 2025, OCBC Investment Research's Donavan Tan says in a report. OCBC lowers the stock's fair value estimate to S$1.42 from S$1.74. OCBC's examination of Frencken Group's supply chain and key clients as well as guidance from management suggests that expected growth in Frencken Group's semiconductor business will probably materialize in late 2H 2025. The company's efforts for contracting new production initiatives by leveraging its key capabilities position it well to ride the recovery and growth of its various segments, the analyst says. OCBC remains confident in the company's long-term prospects, and maintains a buy rating on the stock. Shares are unchanged at S$1.21. (ronnie.harui@wsj.com)
0206 GMT - Aeon Co. $(M)$'s 4Q earnings could remain strong, helped by likely higher consumer spending following Malaysia's planned civil servant salary hike, Maybank IB analyst Jade Tam says in a note. Seasonally stronger sales during the year-end festive season could also help support the supermarkets owner's 4Q earnings, she reckons. Aeon could also benefit from recent government initiatives designed to boost consumers' disposable income, she adds. Tam raises Aeon's 2024-2026 earnings forecasts by 7%, 4% and 4%, respectively, after 3Q earnings beat expectations. Maybank lifts the stock's target price to MYR1.95 from MYR1.86, while maintaining a buy rating. Shares are 0.7% higher at MYR1.47.(yingxian.wong@wsj.com)
0152 GMT - Hong Kong's Hang Seng Index edges 0.2% higher at 19650.71, supported by consumer stocks. Risk-on sentiment is driving Asia markets, as market participants "reassessed initial jitters" about Nvidia's earnings, IG market strategist Yeap Jun Rong writes in a note. The bullish sentiment going into the year-end is supported by a positive seasonal trend, he adds. Sunny Optical Technology Group rises 5.8%, Chow Tai Fook Jewellery Group gains 3.0% and Lenovo Group is 2.6% higher. Baidu leads declines, falling 9% after posting a lower 3Q revenue. Geely Automobile loses 1.6% and WuXi AppTec is 1.4% lower. (kimberley.kao@wsj.com)
0148 GMT - Chinese shares open lower, weighed by auto and financial stocks. Moody's reckons that China's supportive measures could provide relief, but a growth deceleration remains on the cards in 2025. The expect real GDP growth to slow to 4.2% in 2025. BYD drops 0.4% and Great Wall Motor is 1.2% lower. Among the financial stocks, Citic Securities puts off 0.4% and East Money Information is down 0.6%. Semiconductor stocks edge higher, with Semiconductor Manufacturing International Corp. rising 1.2%. The benchmark Shanghai Composite Index is 0.1% lower at 3365.4, the Shenzhen Composite Index edges 0.1% lower and the ChiNext Price Index declines 0.3%.(sherry.qin@wsj.com)
0139 GMT - Keppel DC REIT stands to benefit from its proposed acquisition of two data centers in Singapore, UOB Kay Hian's Jonathan Koh says in a research report. The proposed deal would expand the REIT's assets under management by 36% to S$5.2 billion with 25 data centers across Asia-Pacific and Europe, the analyst says. The data centers are 100% contracted to global hyperscalers from cloud services, Internet enterprise and telecommunications sectors on a colocation basis, and offer net-property-income yield of 6.5%-7.0%, the analyst notes. The brokerage raises the unit's target price to S$2.64 from S$2.50 with an unchanged buy rating. Units are 0.4% lower at S$2.24. (ronnie.harui@wsj.com)
0138 GMT - SD Guthrie's diversification strategies are expected to yield results by 2026, RHB IB analyst Hoe Lee Leng says in a note. The planter will reclassify earnings into four segments--upstream, downstream, industrial development and renewable energy-- from 4Q, she notes. Industrial development will cover industrial land sales and property development income, while RE will include revenue sharing from RE projects, and income from solar farms and biogas, she says. Significant contributions from these new segments are anticipated by 2026, she reckons. Hoe cuts SD Guthrie's 2024-2026 earnings estimates by 11.7%, 4.1% and 5.9%, respectively, on lower fresh fruit bunch output forecasts. RHB cuts SD Guthrie's target price to MYR5.55 from MYR5.75 with an unchanged buy rating. Shares are 0.2% higher at MYR4.81. (yingxian.wong@wsj.com)
0136 GMT - A2 Milk recovers almost all this month's share-price decline following its introduction of a dividend policy and rosier view of annual revenue. A2 Milk says it plans to pay out 60%-80% of net profit as dividends, sending its Australia-listed stock up 18% to A$5.66. Citi analyst Sam Teeger says the commencement of the policy in 1H of FY 2025 is earlier than the market expected. Consensus expectations had been for its implementation in 1H of FY 2026, says Citi, which has a buy call on A2 Milk. "Further, given how weak the stock has been recently the revenue guidance upgrade (regardless of the driver) should be taken positively," Citi says. A2 Milk now expects FY 2025 revenue to rise by mid-to-high single digits percent. That compares to prior guidance for mid-single digit growth. (david.winning@wsj.com; @dwinningWSJ)
0131 GMT - The size of WiseTech's guidance downgrade surprised its bull at Citi, who hadn't expected the now-delayed product to contribute so much revenue in the current fiscal year. Analyst Siraj Ahmed tells clients in a note that he had expected the Container Transport Optimization product to contribute less revenue over six months than the A$75 million potentially implied by the downgrade. He is interested to hear more about the significant initiatives flagged by the company to help offset the revenue delay, but warns that the downgrade could exacerbate concerns about revenue visibility. Citi has a last-published buy rating and A$124.50 target price on the stock, which is down 9.7% at A$125.50. (stuart.condie@wsj.com)
0124 GMT - CIMB Securities raises its rating on Petronas Chemicals' to buy from hold as it believes the market has overreacted to the company's unrealised forex loss in 3Q. The chemical company's shares have dropped 17% since Nov. 4, analyst Nurzulaikha Azali says in a note. The analyst cuts Petronas Chemicals' 2024-2026 earnings estimates by 7.9%, 19.1% and 19.7%, respectively, citing depreciation, interest charge and lower plant utilization rate assumptions due to planned facility shutdowns. CIMB Securities cuts Petronas Chemicals' target price to MYR5.41 from MYR6.04. Shares are 1.7% lower at MYR4.75.(yingxian.wong@wsj.com)
0111 GMT - SD Guthrie appears on track to achieve additional land disposal gains in 4Q, aiming for its annual target of MYR500 million-MYR700 million, Maybank IB analyst Ong Chee Ting says in a note. The company's management remains optimistic about its 4Q earnings, driven by higher average selling prices, an improved output and a stronger near-term downstream outlook, he notes. Maybank raises SD Guthrie's 2024-2026 core EPS forecasts by 10%, 3% and 2%, respectively. It also raises its target price for SD Guthrie's stock to MYR5.41 from MYR5.20, while maintaining a buy rating. Shares are 1.0% higher at 4.85.(yingxian.wong@wsj.com)
(END) Dow Jones Newswires
November 21, 2024 22:26 ET (03:26 GMT)
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