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CGS INTERNATIONAL |
CGS INTERNATIONAL |
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Genting Singapore Signs of earnings inflection
■ 3Q25 adj. EBITDA of S$222.7m (+35.9% yoy/+18.5% qoq) was in-line, with 9M25 adj. EBITDA at 75.4%/69.7% of our/Bloomberg FY25F estimates. ■ Key driver was the 6.7% yoy/37.4% qoq growth in non-gaming revenue which benefitted from opening of new attractions in Resorts World Sentosa (RWS). ■ Reiterate Add with TP unchanged at S$0.785 as we believe GENS will see sustained growth in profitability with stronger non-gaming revenue ahead.
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United Overseas Bank Uncertain pace of earnings recovery
■ UOB said its pre-emptive provision in 3Q25 of S$615m was one-off but we think confidence in credit management could take time to restore. ■ The provisions were mainly for UOB’s commercial real estate (CRE) exposure in US and Greater China. ■ We cut our FY25F EPS by 18.8% to account for the one-off provisioning and FY26F/27F by 13.1%/10.4% due to lower NII from NIM compression. ■ Maintain Hold, with a lowered GGM-based TP (LTG: 2%; ROE: 11.5%) of S$36.50 after rolling forward our valuation to FY26F.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Sanli Environmental (SANLI SP) On a roll – More to come
Raise TP to SGD0.53 from SGD0.50 Sanli has been awarded a SGD205m contract by PUB for the development of Changi NEWater Factory 3 over 2 years. This will boost its orderbook to a fresh record of SGD838.7m. Sanli is also waiting for the result of its SGD142m tender for a Tuas Water reclamation plant contract, which could boost its orderbook to close to SGD1bn. We lift our FY26/27E PATMI estimates by 5.2% and 10.1%, respectively, resulting in a 6% higher TP of SGD0.53 based on 15x FY27E P/E. Maintain BUY. Sanli is on the verge of rapid growth in coming years and is one of our top SMID picks.
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Singapore Post Ltd (SPOST SP) Still awaiting revised strategy
Maintain HOLD with a lower TP of SGD0.43 1H26 revenue continued to decline, by 27.4% YoY to SGD188.4m. However, core PATMI returned to profitability to SGD5.5m after cost rationalising. We revise our earnings for FY25E and 26E by +44.2%/64.9% However, we think it’s not easy and will take a long time to fix the structural decline in its core business as well as the intense competition within the last-mile delivery space. We apply a 20% discount to our NAV valuation and derive a lower TP of SGD0.43, down from SGD0.51. Maintain HOLD as near-term earnings are unable to justify its current valuations and it lacks immediate catalysts, in our view.
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| LIM & TAN | LIM & TAN |
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For 3Q’25, both DBS ($54.27, down 0.71) and OCBC ($18.19, up 0.41) beat consensus expectations due to better than expected provisioning policy which saw lower than expected provisions for OCBC and provision writebacks for DBS as well as strong than expected Non-Interest Income from both banks, thanks to more than 30% growth in both banks wellmanagement businesses as well as insurance business segments for OCBC. Fee income performance for both banks also surprised on the upside. All 3 banks are currently yielding an attractive 6+ percent yield. Price to Book wise, UOB is at 1.1x book, OCBC 1.4x book and DBS at 2.3x book. While core PE wise, UOB and OCBC are about 11x versus DBS’ 13x. Combined with their potential 10% capital upside, their 6+ percent yield indicates a total potential return of just under 20% for the 3 banks. We maintain an “Accumulate” rating on the 3 banks with preference for DBS (most visible return policy till FY2027), OCBC then UOB.
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Zixin (S$0.036, up 0.1 cent) is a highly profitable and undervalued S-Chip consumer staple stock whose next step of expansion in Hainan can potentially see its profit more than double over the next few years as it seeks to replicate its successful model in an area five times its current size with the help of the China government co-investing alongside Zixin. As one of the few listed companies with a fully integrated vertical value chain in the sweet potato sector, Zixin enjoys a moat that is difficult for competitors to replicate given the time, CapEx and know-how needed to succeed. As such, we initiate a BUY recommendation on Zixin with a target price of S$0.066, pegged to 10x FY26F PE. Our target PE is significantly below peer averages and we believe Zixin presents a compelling opportunity for investors to participate in the structural transformation and growth of China’s agricultural sector via Zixin. |
