China Interest rate

China Interest rate hikes: DMG note surprise rate hikes could hit SGX listed companies, pointing out CapitaLand, China Minzhong and Yangzijiang to be possible casualties…..

Highlights that CapitaLand risks a bigger fall-out compared to peers with 35% of RNAV from China, but noted that that earnings should be less affected, given its resilient retail portfolio. By comparison, impact on Keppel Land which has a 25% RNAV exposure to China should be negated by its large exposure to the rebounding office sector in SG…..

Earnings of vegetable producer China Minzhong could notch lower as a stronger yuan puts pressure on its export sales with export sales making up 68% of the group's rev, while Yangzijiang, could be hit by a stronger Yuan as it takes in shipbuilding contracts that are typically in US dollar terms, but stomachs most of its costs in Yuan terms…..

Sees some positive impact for China Essence and C&O Pharmaceutical, with China Essence's higher borrowing costs likely to be more than offset by savings from USD and HKD denominated debts, while C&O Pharmaceutical could expand gross margins since cost of purchase are made with USD.