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UOB KAYHIAN |
CGS INTERNATIONAL |
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Strategy – Monthly Market Radar Highlights
• The STI dropped 1.4% mom to 5,676 in Sep 26. Banks (+0.6%) and aviation (+0.3%) held up, but plantation, property, REITs and telecoms sustained losses of 5.6%, 5.7%, 4.7% and 5.3% respectively. Sentiment was affected by geopolitical tensions emanating from the Middle East and the first interest rate hike instituted by new Fed chairman Kevin Warsh.
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iFAST Corporation Ltd Steady and readying in 3Q26F
■ We estimate iFAST could deliver 3Q26F net profit of c.S$32m (+23.1% yoy, +7.2% qoq) on stronger recurring income from wealth management. ■ We expect contribution from Hong Kong to remain flat qoq in 3Q26F despite completion of trustees’ onboarding for its eMPF project in Apr 26. ■ Reiterate Add with an unchanged TP of S$13.00 as we like iFAST’s 3-year EPS CAGR of over 20%, which we believe will be backed by its AUA growth.
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| CGS INTERNATIONAL | PHILLIP SECURITIES |
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AIA Group Extrapolating a 'clean' base to other markets
■ We trim our FY26F VONB forecast to 10.4% yoy (previously 11.9%), and forecast 3Q26F VONB fell 2% yoy on an actual exchange rate (AER) basis (prev. +5% yoy). ■ This was driven by forecasting 3Q26F qoq off a 'clean' 2Q26 base in mainland China and Thailand, resulting in VONB at -21% yoy and +4% yoy for these regions (Fig 1). ■ We remain comfortable with our 3Q26F HK VONB of -6% yoy. We expect group VONB to swing from -2% yoy in 3Q26F to +19% yoy in 4Q26F (Fig 1). ■ AIA's VONB growth post pandemic seems structurally lower compared to prepandemic (Fig 22). This may necessitate a different valuation approach, in our view. ■ We maintain an Add rating and GGM-based TP of HK$117, which remains unchanged despite our lower FY26F–28F VONB, as we slightly raise FY26F–28F EPS.
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Phillip 4Q26 Singapore Strategy Please, can we have some more
SINGAPORE | STRATEGY Review: Singapore equities posted their fifth consecutive and strongest quarterly gain, rising 9.8% in 3Q26 and touching a fresh record on 4 September. A 22% YTD advance ranks Singapore as Asia’s fourth-best performer. Banks led 3Q26 outperformance on above-consensus 2Q26 results, driven predominantly by the jump in wealth management fees (Figure 1). Shipbuilders rallied on an order book recovery as US-to-China container freight rates surged 36% (Figure 2). Cost pressures and demand headwinds weighed on consumer and food-related counters (Figure 3). The spike in bond yields, worsened by hawkish Fed rhetoric and elevated dot plots, triggered a de-rating across S-REITs (Figure 4).
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| MAYBANK SECURITIES | LIM & TAN |
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Singapore Strategy Show me the money
SG’s performance is narrow. Can EQDP broaden it out? Singapore’s YTD outperformance has been narrow – limited to just large cap financials. While SGD5.4bn of the government’s Equity Market Development Programme (EQDP) has been allocated, it is yet to meaningfully appear as institutional buying in the market. Recent retail flows seem to have rotated towards large-cap, safe-haven stocks. As a result, small and mid-cap (SMIDs) counters have had sizable valuation retreats. We believe this could now be an entry catalyst for EQDP funds compared to when multiples were richer. Directing liquidity to SMIDs is a critical goal of Singapore’s market reforms. Stocks under our coverage with large valuation discounts are: FEH, CD, STH, RFMD, THBEV, OLG, GENS, and SCI.
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Far East Orchard Limited / FEOR (S$1.06, up 1 ct) announced that it has entered into a conditi onal share purchase agreement (the “SPA”) with FEO Asset Management Pte. Ltd. (the “Seller”) for the acquisiti on of 42% of the issued capital in FEO Hospitality Asset Management Pte. Ltd. (“FEOHAM”), the manager of Far East Hospitality Real Estate Investment Trust (“Far East H-REIT”) and in FEO Hospitality Trust Management Pte. Ltd. (“FEOHTM”), the trustee-manager of Far East Hospitality Business Trust (“Far East H-BT”) (together the “Managers”) for S$28.3 million (the “Acquisiti on”). Capitalized at S$521mln, Far East Orchard trades at 11.3x P/E and 0.4x P/B with a dividend yield of 3.8%. The increased stake into Far East Hospitality Trust’s manager will repositi on FEOR as the main sponsor of FEHT, increase its assets under management, and grow recurring earnings. There is currently no analyst coverage on FEOR. FEHT is capitalized at S$1.1bln and trades at 0.6x P/B and 7.1% dividend yield. Consensus TP of S$0.72 represents a 41% potenti al upside. |
