THE CONTEXT

• As Singapore's stock market roar back to life, UOB Kay Hian is clearly a beneficiary, earning higher commissions as the volume of trades surge. Less well-known is its wealth management arm earning strong margins and recurring fees.

tickrs has initiated coverage on UOBKH which has deep roots in Asia’s brokerage business.

• The report argues that UOBKH's strong earnings rebound, attractive dividend yield, and much leaner valuation compared to peers all point to a stock ready for further re-rating.

• Whether you’re an income investor hunting for yield, or looking for growth as market activity picks up -- in Singapore, it sure is -- the report could help you spot UOBKH’s hidden value.

The analyst has tagged it a “BUY” with double-digit upside potential, even after a solid run as a recent chart shows:

• Read excerpts of tickrs report below .....

Excerpts from tickrs report
Analyst: Jaimes Chao

We initiate coverage on UOB Kay Hian Holdings Ltd (“UOBKH”) with a BUY rating and a 12-month target price of S$2.80, implying 13.4% upside.

UOB KAY HIAN
Share price: $2.45	Target: $2.80

Our recommendation is underpinned by three key pillars:

1. Earnings Recovery & Growth: We forecast a return to net profit growth in FY2025E, with earnings rising to S$227 million (EPS 23.3 cents) once the transient FX headwinds of 1H2025 subside.

2. Compelling Valuation Disconnect: The stock trades at ~10.6× FY2025E P/E, a significant discount to Singapore-listed financial services peers.

3. Sustainable and Growing Income: UOBKH offers a 4.9% dividend yield, supported by a disciplined ~50% payout policy and a projected DPS of 12.1 cents.

Our S$2.80 target price is derived from a 12× P/E multiple applied to our FY2025E EPS of 23.3 cents — a conservative assumption given the earnings recovery trajectory and peer valuations.

As Asia’s largest bank-backed brokerage, UOBKH is strategically positioned to benefit from the regional capital-markets recovery.

The 12.9% YoY net-profit decline in 1H2025 was primarily due to a S$33.4 million FX swing; underlying brokerage operations remain robust and highly leveraged to improving market volumes and institutional flows.

Our S$2.80 target price is triangulated from three valuation approaches:

• P/E Method: 12× FY2025F EPS of 23.5 cents = S$2.82

• EV/EBITDA Method: 8.5× FY2024 EBITDA less net cash = S$2.78

• P/B Method: 1.25× FY2024 book value = S$2.83

At our target, the stock would trade at ~12× P/E — still well below regional peers — offering clear scope for multiple expansion from current levels.

Stark Valuation Disconnect

UOBKH trades at a deep discount to its local financial peers, despite comparable growth exposure and a superior income profile.

Metric	UOBKH (FY25E)	iFAST Corp	SGX	Singapore Financial Avg.
P/E Ratio	12x	~35x	~29x	~30x
EV/EBITDA	~9.0x	~18x	~13x	~13x
Dividend Yield	4.90%	2.10%	2.45%	~2.2%

*Price-to-Book (P/B) is not a relevant valuation metric for SGX's asset-light, franchise-based business model. Analysis focuses on P/E and EV/EBITDA

This significant discount — approximately 65% on a P/E basis — is excessive.

JaimesChao linkedin Jaimes Chao, analystWe attribute it to UOBKH's legacy classification as a pure-play, cyclical broker, which overlooks its strategic evolution and the quality of its earnings.

We believe this gap will narrow as the market recognizes:

1. Strategic Evolution: UOBKH is not just a broker; its partnership with FNZ and focus on wealth management mirror the growth strategies of its higher-valued peers.

2. Earnings Quality: The company's robust ~33% net margin and high dividend yield are not adequately reflected in its current multiple.

3. Recovery Leverage: UOBKH offers purer, more direct operational leverage to a recovery in ASEAN trading volumes and capital markets activity than its peers.

A re-rating towards a more reasonable multiple, even at a discount to the sector average, represents the primary source of upside and is a core tenet of our Buy recommendation.