DBS Insights Direct

⚔️ Apple strikes back in the AI smartphone rally We expect the launch of Apple's AI-featured iPhone 16 by Sep 2024 to drive its smartphone shipments to 92mn units in 4Q24, beating consensus by 6%. Together with robust growth from Chinese brands in overseas markets, we expect global smartphone shipments to increase by 7.5% in 2024, ahead of market expectations 📱   AI-boosted specification upgrades could drive earnings rebound for suppliers in 2024. Which names stand to benenfit most?

Morning update ⏰ 🤔 Global copper stocks: How much longer before the copper rally starts to tarnish? Copper prices have surged to record USD11,000 per ton due to tight supply and a short squeeze, exceeding our forecast by 20%. Could the recent surge to a key technical level signal limited further gains and raise the likelihood of profit-taking in copper stocks under our coverage? https://go.dbs.com/3WOJeb1  😬 SGD rates: Brace for ultra-long dated tenors We expect ultra-long tenors (>10Y) of the Singapore Government Securities curve to underperform due to upcoming 15Y and 50Y auctions later this year, with a new syndicated 30Y issuance planned for mid-2024. Which tenors do we prefer? https://go.dbs.com/4bqRUsC 🙌 Trip.com: Earnings beat market expectations 1Q24 revenue increased by 29% y/y to RMB11.9bn, in line with market expectations. Net profit increased by 96% y/y to RMB4.1bn, beating expectations thanks to improved operating efficiency. We remain positive on FY24 outlook, supported by flight capacity recovery and relaxation of visa requirements. Is the stock a BUY?  https://go.dbs.com/4dGaHBQ 

👟 Sports brands outperformed in the lead-up to the past two Summer Olympics Sales trends for sportswear generally improved during Olympic years based on past data, which bodes well for sector players as the 2024 Paris Olympic Games commencing in July draws near. Inventories also stand at healthier levels, showing a high single-digit to low double-digit y/y drop, providing flexibility to adjust product offerings prior to the Olympics 🤸   While international brands could be pricing in the good momentum, we prefer two Chinese names for their attractive discount to global peers. Find out who they are. 

Morning update ⏰ 🧐 Revisiting stocks with China property exposure The People's Bank of China's announcement of a RMB300 billion low-cost relending facility may be a shot in the arm for China’s property sector, hinting a more favourable policy direction. Singapore-listed stocks with exposure to the sector are likely to benefit from the improved sentiment, as seen in the Hang Seng Property Index recording its first positive year-to-date return. Find out who they are. https://go.dbs.com/3wKT1o7   🏠 Singapore property agencies: Another shadow looms The new HDB resale listing service adds uncertainty for Singapore property agencies, by allowing buyers/sellers to bypass a property agent. The sector is already facing headwinds from limited transaction growth and high-for-longer interest rates, and this service is expected to further depress HDB resale volumes for property agencies. Which stocks are impacted?  https://go.dbs.com/3wKT1o7   🛒 Walmart Inc: Better outlook for the full year Revenue expanded by 6% y/y to USD161.5bn in 1Q FY25, slightly above consensus, driven by a 21% growth in global e-commerce sales and stronger-than-expected comparable sales growth. Adjusted earnings per share grew 2% y/y, exceeding market expectations by over 10%. What are the growth drivers for the company? https://go.dbs.com/4boCVzt

🌆 Singapore and Hong Kong Retail REITs: A tale of two cities The retail markets of Singapore and Hong Kong enjoyed robust sales recovery in 2023, nearing pre-COVID levels. However, as spending patterns evolve on the back of sticky inflation and high mortgage rates, it will be vital to watch for signs of stabilisation of this trend. We believe Hong Kong faces a more challenging recovery, while the Singapore retail scene is better positioned as customers tighten their wallets 👛 That said, one sector stands out and could bring a positive surprise for both cities, with a greater impact on Hong Kong. Find out what it is.

Morning update ⏰ 💪 Singapore Tourism: Strong 3Q to follow 2Q lull Singapore's tourist arrivals dipped 8% to 1.36 million in April, the lowest number year-to-date, likely due to seasonal factors. Data points reinforce our view that 3Q will see a rebound when Chinese tourists return during their summer break in July/August, and Singapore Grand Prix in takes place September. What are the stocks to watch? https://go.dbs.com/3UJGppk 🐶 JD.com: Core earnings growth surprises market expectations   Retail revenue increased by 6.8% y/y in 1Q24, supported by steady growth of both electronics and general merchandise segments. Non-GAAP net profit increased by 17.2% y/y, above market expectations on higher operating efficiency. Will growth momentum continue?   https://go.dbs.com/3QNbQh8 🇸🇬 Equity Picks: Remove a tech stock from growth Upside to consensus fair value has narrowed to 6.6% following the latest jump in this stock’s price post 1Q24 results, which saw better-than-expected revenue. But its long upper shadow’ candlestick suggests further near-term upside may be limited for now. Find out who it is. https://go.dbs.com/3UJGppk

💴 Is a weak yen better for Japan’s economy?   Japan’s weaker-than-expected GDP performance in 1Q 2024, which led us to revise our full-year GDP forecast to 0.3% from 0.8% previously, has raised debates over whether a weak yen benefits the Japanese economy. While the yen’s depreciation bolsters export revenues, exports remained stagnant in real terms between 2021 and 2023 despite the 40% depreciation over the past three years ☹️ Moreover, a weak yen can potentially spur corporate profits and wage increases, but it also accelerates imported inflation. What do we think the Bank of Japan will do next?

Morning update ⏰ 🇸🇬 Equity Picks: Adding a REIT We add a large cap REIT in response to a slight dip in April US CPI compared to March, suggesting a potential stall in the 1Q inflation rebound. While a one-month pullback doesn’t form a trend, this REIT is among our preferred choices and typically reacts quickly to positive changes in rate cut expectations. Find out who it is. https://go.dbs.com/3QNz2vA 🤞 STI: Index removal not all doom and gloom   5 stocks were removed during the MSCI quarterly review. These stocks were sold down yesterday, and there could be another negative knee-jerk reaction heading to the 31 May cut-in date. However, history shows that some stocks bottomed out but significantly rebounded post-removal. What are the factors to watch for the 5 deleted stocks beyond 31 May?   https://go.dbs.com/44IW0K9 ⭐️ Grab Holdings: Stellar 1Q24 and upgraded guidance 1Q24 group adjusted EBITDA was up 72% from 4Q23, surpassing consensus estimate. The robust performance was driven by effective cost control and the mobility segment. Grab has raised its FY24F guidance, which is 24% above consensus. Is the street likely to raise projections?  https://go.dbs.com/4dB7UKp   😮‍💨 Relief rally over the Fed’s last mile on inflation The DXY Index depreciated a third day to a five-week low of 104.35. The Fed's restrictive monetary policy allowed core inflation to cool to 0.3% m/m in April, but more progress towards the 2% inflation target is needed before rate cuts are supported. Until then, we see the Fed reducing the three rate cuts it projected in March. What else are we expecting? https://go.dbs.com/3K2QkBf 

✨ Luxury developments to outshine mass market projects Following the government’s announcement to ease policies for residential properties in February this year, developers have seized the opportunity to offer more new residential projects for sale and expedite inventory sales to tap pent-up demand. This has caused the primary market to rebound with the support of affluent Mainland buyers and property investors 🏘️   Despite the stable home prices since March and upcoming interest rate cuts, local buyers are still price sensitive. With the return of affluent Mainland buyers, luxury developments should exhibit more resilience and fare better than mass market projects. Amid attractive sector valuations, which names stand out?