UOB Kay Hian has added MM2, SIA Engineering Company (SIAEC) and Venture Corporation to its alpha picks portfolio for the month of April.
To the analysts, MM2 should benefit from seeing higher capacities at its cinemas and live performances on the back of the relaxed measures, while SIAEC is leveraged to the airlines’ increased activity at Changi Airport in the wake of easing travel rules.
Venture was always chosen for its “robust demand outlook” as well as its attractive valuations.
On the other hand, counters such as BRC Asia and Yangzijiang (YZJ) have been removed from the alpha portfolio as the team has chosen to take profit on them.
BRC Asia, which has seen its share price increase by 11.4% since its inclusion in the portfolio, saw its shares re-rate after it released its results for the 1QFY2022 ended December.
“While we remain bullish on BRC for the long term, we remain cautious due to short-term headwinds such as rising steel prices,” says the team in its April 4 report.
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YZJ has also seen its shares increase some 52.5% since its inclusion in the brokerage’s alpha picks.
“While we continue to like YZJ, we believe that near-term catalysts remain scarce and would look to re-enter at lower levels,” the team adds.
Overall, the brokerage’s alpha picks portfolio rose 6.3% m-o-m and outperformed the benchmark Straits Times Index (STI), which rose 5.1% m-o-m.
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Key stocks that outperformed were Sembcorp Marine (SembMarine), YZJ and Ascott Residence Trust (ART), which rose 18%, 11% and 10% m-o-m respectively.
However, the portfolio underperformed on a quarterly basis, with it being up 5.3% in the 1QFY2022, compared to the STI’s 9.1% q-o-q growth. The STI was the performing Asian index during the same quarter.
The analysts have given “buy” calls on MM2, SIAEC and Venture Corp with target prices of 12 cents for MM2, $2.80 for SIAEC and $22.80 for Venture Corp.
They are also keeping “buy” on BRC Asia and YZJ.
The STI closed 2.14 points lower or 0.06% down at 3,416.97 points on April 4.
