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UOB KAYHIAN |
PHILLIP SECURITIES |
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DBS Group Holdings (DBS SP) 3Q26: Focus On Resiliency And Growth Of Core Franchise
Highlights • DBS reported 3Q26 net profit of S$2,813m, down 5% yoy and 9% qoq, due to weaker markets trading income. Underlying momentum remained healthy, with NII rising 4% yoy, wealth AUM reaching S$544b and record net new money of S$15b. Asset quality improved as NPL ratio fell to 0.9%. • Management expects NII and loans to grow about 5% in 2027, alongside high single-digit to low double-digit growth in non-interest income. A resilient wealth franchise, disciplined costs and S$2.6b of unused share buyback capacity support earnings and capital return outlook. • We like DBS for its leadership in wealth management and attractive 2027 dividend yield of 4.9%. Maintain BUY. Target price: S$84.70.
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Phillip Singapore Monthly – Nov26 AI indigestion
• Singapore equities endured a difficult month. The 5.3% pullback was the steepest monthly drop since the 17% rout in March 2020. Cyclicals and commodities bore the brunt of the de-risking, alongside retreating banks. Conversely, Jardine Group counters led gainers. The Next50 mid-cap index shed 7%, while REITs were resilient, easing just 1%.
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| PHILLIP SECURITIES | MAYBANK SECURITIES |
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SIA Engineering Co. Ltd SAESL drag will near its peak
SINGAPORE|AEROSPACE|RESULT • 2Q27/1H27 PATMI was largely stable, +3.0%/-1.7% YoY to S$41.6mn/S$81.9mn, and forming 23%/45% of our full year FY27e estimate. However, revenue fell 10.7%/9.7% YoY to S$331.0mn/S$658.6mn on lower pass-through materials revenue attributed to the mix of work performed (fewer material-intensive heavy checks: 37 in 1H27 vs 44 in 1H26)
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CapitaLand Investment Ltd (CLI SP) Sharpening its focus
Core operations steady, maintain BUY CLI reported 9MFY26 revenue of SGD1.5b, -3% YoY and representing 68% of MIBG’s full-year estimate. Core fee-related revenue was consistent with expectations, while the real estate investment business was impacted by ongoing divestments. Event-driven fees led to strong growth in fund management, while lodging management was relatively flat. Private funds maintained a steady pace of capital raising. The group seeks to further sharpen its focus by reorganizing into a fee-generating unit and an assetholding unit, with further details to be announced. Overall, performance was in line with expectations, but we lower our FY26 earnings estimate to reflect valuation losses. Maintain our TP and BUY.
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| LIM & TAN | DBS GROUP RESEARCH |
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Centurion Accommodation REIT / CAREIT (S$1.09, up 2 cts) has announced the business updates for the third quarter ended 30 September 2026 (“3Q 2026”) and nine months ended 30 September 2026 (“9M 2026”). CAREIT’s market cap stands at $1.9bln and currently trades at 1.3x P/B, with a dividend yield of 6.4%. CAREIT continues to see positive momentum in 3Q, driven by a robust PBWA performance and expanded bed capacity. Going forward, mgmt expects the rest of the year to exceed IPO forecasts, supported by rental reversions and committed occupancy levels. Consensus target price stands at S$1.31, representing 20% upside from current share price. We continue to be positive on CAREIT given its strong fundamentals and organic growth pipeline across its PBWA assets and hence maintain our Accumulate recommendation.
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Visibility remains limited, but risks to Singapore semiconductor medium-term earnings are skewed to the downside. Globally, delays to future facilities could push out chip and equipment purchases, although upgrades within existing data centres and shipments redirected elsewhere could provide offsets. The Wafer Fab Equipment sector should be more insulated as what they deliver in 2027/28 is for wafer production in 2030 or beyond, though there is a risk of order deferments. Hyperscalers could gain cash flow relief from more measured spending, although prolonged capacity constraints would eventually limit revenue growth. This is generally posiitve on hyperscalers except for Microsoft who may be more reliant on Neoclouds for future capacity addition. Memory faces additional pricing risk if demand weakens, while longer term fab investment plans should initially cushion front end equipment orders. Neoclouds are the most exposed, as tighter approvals could delay revenue from new projects while financing costs accrue. Asian data centre players who can charge a premium price from 2028 onwards could also benefit from relocated demand. For Singapore suppliers, a more staggered buildout could temper earnings momentum while extending the investment upcycle, provided underlying demand holds. Project relocation may preserve cumulative spending while deferring order conversion and revenue recognition. Customer device release schedules, order rescheduling and backlog conversion are the key indicators we are watching. Tactically, Venture and Frencken may prove more resilient than more AI exposed proxies such as UMS, supported by their diversified end markets. |
