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DJ Global Equities Roundup: Market Talk

· 02/04/2021 23:04

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

0404 GMT - Shanghai Henlius Biotech could emerge as an innovative market leader due to its diverse product offerings, UOB Kay Hian says. It initiates coverage of the stock with a buy rating and HK$56.00 target price, as it expects the company's new biosimilar products to boost revenue growth to 102% CAGR over 2020-22. Henlius is also entering the global market faster than most of its peers. The brokerage sees a growth opportunity in China's biologics market, which it expects to expand at a CAGR of 18.0% over 2019-24. Shares are down 1.5% to HK$39.00. (yiwei.wong@wsj.com)

0354 GMT - SP Setia poses relatively low ESG concerns thanks to continuing efforts to establish policies to prevent and mitigate these risks, Maybank IB Research says. Environmental concerns are central to SP Setia's property-development projects. Maybank notes that the real-estate developer's green designs take into account efficient use of energy and water throughout the project lifecycle. Maybank maintains a buy rating and target price at MYR1.29 on SP Setia. Shares rise 0.6% to MYR0.90. (chester.tay@wsj.com)

0346 GMT - State Bank of India's loan-growth outlook has likely improved, based on its fiscal 3Q results, Citi says, as it raises the stock's target price to INR430.00 from INR350.00 with an unchanged buy rating. Its loan growth improved sequentially in 3Q, led by retail and small and medium-size enterprise segments. Its cumulative proforma slippages for 2Q and 3Q totaled INR165 billion, of which INR144 billion occurred in 2Q, implying sharply lower slippages in 3Q. Lower-than-expected levels of stress, strong deposit traction and improvement in loan growth should drive earnings for the lender, Citi says. State Bank of India shares climb 10% to INR390.60. (ronnie.harui@wsj.com)

0338 GMT - Innovent Biologics' robust pipeline of new clinical drugs shows strong commercial potential, UOB Kay Hian says, initiating coverage on the stock with a buy rating and a target price of HK$122.80. Innovent is a market leader in China's biotechnology sector and owns the most biomedical products among domestic peers. The company is actively exploring new opportunities in research and development by entering strategic collaborations with global partners such as Eli Lilly. These collaboration efforts should ensure Innovent stays ahead in the competition in the long term, UOB KH adds. Shares rise 1.8% to HK$95.45. (yiwei.wong@wsj.com)

0334 GMT - Sime Darby Property may aim for a higher sales target in 2021 given its plans for more aggressive launches to capitalize on the government's initiatives to promote home ownership, says CGS-CIMB. The property developer is looking to roll out real estate with gross development value of MYR2.5 billion this year, versus MYR1.4 billion in 2020, it says. CGS-CIMB keeps its rating but cuts its target price to MYR0.84 from MYR0.85 to account for the potential impact on earnings after adopting new accounting standards that prevent the capitalization of borrowing costs for unsold units. Shares are unchanged at MYR0.59. (chester.tay@wsj.com)

0327 GMT - Petronas Chemicals Group could be a key beneficiary of stronger fertilizer demand, Citi says. It upgrades the stock to buy from sell and lifts its target price to MYR8.50 from MYR6.80, also citing faster earnings growth and rising urea prices. Urea is a white crystalline solid material often used in fertilizers. Citi forecasts the Ebitda of Petronas Chemicals' fertilizer-and-methanol segment to rise 40% in 2021, as it raises the 2021-2022 EPS estimates for the company by 23%-24% to reflect higher crude-oil prices. Shares rise 2.9% to MYR7.42. (yiwei.wong@wsj.com)

0317 GMT - AIMS APAC REIT's valuation looks attractive on all fronts, DBS says, as it raises the units' target price to S$1.50 from S$1.40 with an unchanged buy rating. The REIT is trading at a forward dividend yield of 7.5%, supported by its healthy portfolio weighted average lease expiry, and at a price-to-net asset value multiple of 0.96 times, both of which imply an attractive risk-reward ratio. The REIT also surprised DBS with its fast execution of two accretive acquisitions in FY 2021, which are expected to drive DPU higher by 9% in FY 2022. AIMS APAC REIT's units are 1.6% higher at S$1.30. (ronnie.harui@wsj.com)

0311 GMT - China's restrictions on Australia's thermal coal may last longer than the curbs on its coking coal because Australian thermal coal is relatively easy to replace in the broader market, says CBA. "The same is not true for Australia's coking coal," it says. Australia is the world's No. 1 producer of coking coal, which is used to make steel. Russia and Indonesia have in the meantime stepped up to meet China's thermal-coal needs after Beijing halted Australian cargoes, the bank notes. "China's deal with Indonesia for $1.46 billion of thermal coal over the next three years also signals China's intent to solidify its relationship with Indonesia," CBA says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0310 GMT - ComfortDelGro is likely to post earnings growth this year on a gradual recovery in ridership and easing of social-distancing measures in the domestic Singapore market, Maybank Kim Eng says. The progressive rollout of Covid-19 vaccines in Singapore should help boost land transport demand, supporting ComfortDelGro's earnings. The transport operator may also benefit as the taxi industry stabilizes, with regulators leveling the playing field and competitors such as Grab and GoJek pivoting to focus on other businesses. Maybank KE maintains a S$1.88 price target at a buy rating. ComfortDelGro shares are unchanged at S$1.59. (justina.lee@wsj.com)

0250 GMT - Novatek Microelectronics is likely to report another quarter of record earnings in 1Q, supported by strong work-from-home demand, Daiwa Capital says, as it maintains an outperform call on its stock. The investment bank raises the stock's target price to NT$500 from NT$325, citing Novatek's record 4Q net profit on stronger-than-expected price increases. But investors should be mindful of potential business uncertainties in 2H. "As opposed to the rosy 1H21, we suspect the sustainability of [work-from-home] demand and forecast likely a below seasonal 2H21 for Novatek on our inventory risk concerns," Daiwa says. Shares are up 10% at NT$479. (justina.lee@wsj.com)

0237 GMT - Base metals inch up in early Asian trade after taking a hit from a stronger USD overnight. The approaching Chinese New Year holidays, which start on Feb. 11, may continue to cloud the outlook for copper. Copper inventories are likely to build up over the next two weeks because of a potential drop in demand amid the holidays, Huatai Futures says, as it advises investors to stay on the sidelines. The three-month LME copper contract is up 0.4% at $7,851 a ton, while the nickel contract adds 0.8% to $17,790 a ton. (martin.mou@wsj.com)

0230 GMT - Sunny Optical Technology's earnings growth is likely to be strong this year thanks to the potential Apple orders win and growing trends for intact multicamera in smartphones, Daiwa Capital says. The Japanese bank expects the optical-lenses maker's earnings to grow 35%-39% over 2021-2022 as it capitalizes on Apple's lens supply chain. Daiwa's forecasts for Sunny's 2021-2022 EPS are 5%-14% above consensus as it is more optimistic about long-term benefits from rising multicamera trends. Daiwa maintains a buy call and raises its target price to HK$256 from HK$175. Shares rise 1.8% to HK$220.20. (justina.lee@wsj.com)

(END) Dow Jones Newswires

February 04, 2021 23:04 ET (04:04 GMT)

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