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UOB KAYHIAN |
CGS CIMB |
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REITs – Singapore Interest Rates To Eventually Ease
Tame inflation despite the reciprocal tariffs and nascent signs of weakness in the job market has led to expectations of two rate cuts in 4Q25. Maintain OVERWEIGHT. Our preferred BUYs are CICT (Target: S$2.72), FCT (Target: S$3.07) and LREIT (Target: S$0.80) for suburban retail, and DCREIT (Target: US$0.88) and KDCREIT (Target: S$2.87) for data centre, which are less affected by the reciprocal tariffs. We also like CLAR (Target: S$4.02) as it is a beneficiary of preferential tariff.
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Singapore Strategy Singapore in 5 – Jun 25
■ The SIMSCI closed Jun 2025 at 409.26 pts, up 2.54 pts mom (+0.62%), hitting a new high in early-Jun for a second consecutive month. ■ Eyes are on the 9 Jul US tariff ‘deadline’. ■ Maintain our CY25F MSCI target of 411.7pts, based on 15x CY25F earnings and expectations that oscillations around our index target will continue.
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CGS CIMB |
MAYBANK KIM ENG |
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Seatrium Ltd 1H25F preview: expect stronger net profit
■ We expect STM to achieve c.S$4.7bn revenue (+18% yoy, -9% hoh) and c.S$153m net profit (+33% yoy. +80% hoh) in 1H25F. ■ We expect the first Petrobras 78 (P-78) FPSO to be delivered in 2H25F. ■ As this is the first unit from the Petrobras series, we estimate GM for the project to be 9-10%. ■ Reiterate Add and TP of S$2.80. Catalysts: margin expansion, finalisation of investigation by MAS and CAD.
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Singapore Banks May loan growth remains soft
Loan growth YoY muted, except for front loading May 2025 MAS preliminary statistical data revealed total loan growth of +3.5% YoY, with total loans outstanding coming in at SGD1,306bn.
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| LIM & TAN | LIM & TAN |
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We highlight the key points from Singtel’s ($3.82, down 0.01) just released FY ended March’25 annual report: For FY ended March’25, underlying net profit increased by 9% to S$2.47 billion, underpinned by growth in our businesses and regional associates. Net profit was more than five times higher at S$4.02 billion, boosted by a one-time exceptional gain of S$1.3 billion from the partial divestment of our Comcentre headquarters. We continue to like Singtel for both its steady and defensive growth profile while providing a sustainable yield of 5%, while downside protection from its on-going $2bln share buy back program. Consensus 1 year target price of $4.40 implies a potential upside of 15%. We maintain an “Accumulate” rating on Singtel.
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Food Empire / FEH ($1.84, down 6 cents) refers to the announcements dated 20 August 2024, 30 October 2024 and 1 November 2024 in relation to the REN Issuance and announced that it has entered into a second supplemental agreement to amend the terms of the Subscription Agreement and the Note Conditions in accordance with the terms of the prevailing Subscription Agreement and the Note Conditions. FEH’s market cap stands at S$972mln and currently trades at 16x forward PE and 2.7x PB, with a dividend yield of 4.3% (6cts + 2cts special), or 3.3% without the special dividend.. Consensus target price stands at S$1.98, representing 7.6% upside from current share price. FEH has done well recently and while this corporate action has no impact on it’s existing business and will not impact fundamentals, FEH will register an one off accounting loss. However, as core earnings are expected to come in c.$60mln and this accounting loss is about c.$20 and FEH is likely to remain profitable for FY25. |
