Macquarie tips four key themes in Singapore’s equity space: 1) earnings quality with an overseas bias; 2) China domestic demand; 3) visitor arrivals to Singapore; 4) stock-specific stories.
For the first, it likes SembCorp Marine (S51.SG) as it is well-positioned for an expected order surge in 2H and has a healthy order book, Vard (MS7.SG) with its improving order outlook and asset enhancement investments, and Genting Hong Kong (S21.SG) given its valuations and improving asset performance.
For the second, it likes CapitaMalls Asia (JS8.SG) as Singapore’s best play on Asian retail and consumption, Global Logistic Properties (MC0.SG) as China’s 12th five-year plan highlighted the logistics sector as a pillar industry, and China Minzhong Food (K2N.SG) as its large-scale vegetables origination and processing business in China is well poised to grow given a burgeoning population and urbanisation trend.
On the third, it likes Genting Singapore (G13.SG) as it runs a high-traffic casino in Singapore’s protected two-player market, which has 25-year concession visibility. On the fourth, it likes Hongkong Land (H78.SG) as it provides the greatest leverage to a recovery in the Hong Kong Central office market, Neptune Orient Lines (N03.SG) on expectations for a rebound in net profit, and ARA Asset Management (D1R.SG) given its track record of growing assets under management and its scalable business model.
Macquarie has Outperform ratings on all of these top picks.