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CGS CIMB |
PHILLIP SECURITIES |
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China Aviation Oil Delivering on volume and margin
■ CAO trades at c.8.5x CY26F P/E, or 0.5 s.d. below its 10-year historical mean, offering a compelling entry point, in our view. ■ 1H25 results were lifted by volume and stronger SAF trading; expect 2H25F volume and margin growth to be partially offset by oil price weakness. ■ Reiterate Add. As we raise FY25-27F core EPS by 5-7%, our TP rises to S$1.45, still based on CY26F P/E of 10x (10-year historical mean).
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Singapore Air Transport – Aug25 Mixed performance, supported by EQDP
▪ In July 2025, the aviation sector delivered a mixed performance, with small- to mid-cap counters supported by the positive momentum of the Equity Market Development Programme (EQDP). China Aviation Oil (CAO) was the top gainer, surging 26.2% on the back of strong 1H25 results, while SATS edged up 0.9%. Conversely, Singapore Airlines (SIA) and SIA Engineering (SIE) entered a correction phase, plunging 10.5% and 6.0%, respectively, amid fading recovery tailwinds.
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UOB KAYHIAN |
UOB KAYHIAN |
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Suntec REIT (SUN SP) 1H25: One-off Compensation Boosts Australia Contribution
NPI from Australia grew 20.8% yoy in 2Q25, boosted by a one-off compensation of A$10m from a tenant at 177 Pacific Highway in Sydney. SUN is in advanced negotiations with a government agency at 55 Currie Street in Adelaide and a financial institution at The Minster Building in London to backfill vacant space. It is expected to regain its MIT status for Australia in 2026. 2026 distribution yield is fair at 5.4%, although P/NAV of 0.61x is attractive. Maintain HOLD. Target price: S$1.31.
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RH Petrogas (RHP SP) 1H25: Cash-Fuelled Resilience With Two Exploration Wells In Sep/Oct 25
RH Petrogas’ 1H25 revenue fell 19% yoy on lower oil prices and reduced liftings, but cost control helped the company to beat our earnings estimates on a run-rate basis. Free cash flow surged to US$15m, implying an annualised 28% FCF yield, supported by a net cash balance that makes up 54% of its market capitalisation. The upcoming exploration drilling in September and October, if successful, could be potential share price catalysts. Maintain BUY. Target price lowered slightly to S$0.245.
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| MAYBANK KIM ENG | LIM & TAN |
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ST Engineering (STE SP) Sustained earnings growth
Inline 1H, stretched multiples; Downgrade to HOLD STE reported 1H PATMI of SGD403m, +10% HoH/+20% YoY, with annualised run-rate 4% below MIBG’s FY25E. Key items were in line with expectation with top line growing 7% YoY while cost savings and better margin mix improved bottom-line growth. Focus is on exiting non-core business and recycling capital. While STE has visible earnings growth from a record order book, risk-reward is unfavourable from its stretched valuation (31x ‘25e PE vs. historical mean 19x) and tariff-related risks. Downgrade to HOLD on a slightly higher SOTP-based TP of SGD8.40 on lower debt cost.
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Centurion Corp’s (S$1.71, down 2 cents) 1HFY25 results came in slightly above our expectations with revenue and core profits coming in at 53%/55% of our full year forecast.
At S$1.71, Centurion is capitalized at S$1.4bln and trades at 12.8x forward P/E and 1.2x P/B with an annualized dividend yield of 2.3%. We raise our previous core earnings forecast for FY25F/FY26F by 6%/4% to reflect better operational performance. The capital recycling of mature assets into an upcoming REIT will provide value-unlocking opportunities for Centurion and crystallize some of these huge fair-value gains realized over the past 2-3 years. Accordingly, we shift our valuation methodology from P/E to Sum-Of-The-Parts (SOTP) based on Centurion’s stake in the REIT and its other remaining assets. Maintain “Accumulate on Weakness” with a higher target price of S$2.00 (previous TP: S$1.20). |
