Hong Leong Asia - CGS-CIMB Research 2023-08-31: Better Days Ahead

• Hong Leong Asia (SGX:H22)’s 1H23 core PATMI of S$31m (-4% y-o-y) came in below expectations at 39% of our FY23F. Despite stronger underlying performance by both business segments, overall profitability was dragged by weaker FX translation, higher net financing costs and additional provision of tax of S$7m for prior years.

Diesel engines (Yuchai): Recovery from a low base

• - Read this at SGinvestors.io -
• Despite weaker than expected recovery of China economy post COVID-reopening year-to-date, we still expect sales volume recovery in 2H23F from a low base last year; with upside catalysts including
  1. - Read this at SGinvestors.io -
  2. rollout of more supportive policies on the provincial levels to accelerate elimination of National IV diesel trucks, and
  3. continued strength in export sales. Yuchai continues to invest in R&D to develop new energy solutions.

Building materials unit (BMU): Further growth ahead in 2H23F

• Building materials segment PAT grew to S$31m (+8% y-o-y) in 1H23, mainly driven by stronger performance at Tasek (Hong Leong Asia’s Malaysian subsidiary) while its Singapore operations were impacted by industry-wide challenges including safety issues, shortage of dormitories and higher costs.
• We expect further PBT growth for BMU segment in the 2H23F.
  • Read more at SGinvestors.io.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

Read also CGS-CIMB's most recent report:
2023-09-11 Hong Leong Asia - Well Set For The Future.

Price targets by other brokers at Hong Leong Asia Target Prices.

Listing of research reports at Hong Leong Asia Analyst Reports.

Relevant links:
Hong Leong Asia Share Price History,
Hong Leong Asia Announcements,
Hong Leong Asia Dividend Payout Dates & Corporate Actions,
Hong Leong Asia News