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UOB KAYHIAN |
UOB KAYHIAN |
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Strategy Alpha Picks:
Finishing 2025 Strong, Conviction Into 2026 • Over the past 12 months, Alpha Picks outperformed the STI in 11 months, reinforcing our conviction heading into 2026. • Our Dec 25 Alpha Picks gave an outperformance on all weighted measures. • Jan 26 Alpha Picks: ASL, CIT, CLAR, CSSC, CSE, DFI, FEH, KEP, LREIT, MPM, OCBC, RSTON, SATS, UGAI and VALUE.
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REITs S-REITs Monthly Update (Dec 25)
Highlights • S-REITs would be active in asset recycling in 2026 supported by depressed domestic interest rates. M&A activities could be a positive surprise . • Maintain OVERWEIGHT. BUY blue-chip S-REITs with specific catalysts: CLAR (Target: S$4.02), FLT (Target: S$1.22), LREIT (Target: S$0.81), MPACT (Target: S$1.84) and NTTDCR.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Keppel REIT (KREIT SP) Resiliency From Expansion In Singapore
Highlights • The additional one-third interest in MBFC Tower 3 is priced at S$1,453m or S$3,268psf, providing a tight NPI yield of 3.5%. • The acquisition expands KREIT’s exposure to resiliency in Singapore from 75.8% to 79.0% of AUM. Vacancy is expected to remain tight as there is no new office supply in the Marina Bay vicinity from 2026 to 2029. • Maintain BUY. We lower our target price from S$1.20 to S$1.12 due to the dilution caused by the non-renounceable 23-for-100 preferential offering.
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Malaysia Banking 5.2% YoY loan growth in Nov 2025
Forecasting loan growth of 5% for 2026 Industry loan growth was a slower 5.2% YoY in Nov 2025 and 4.8% on an annualised basis. Indicatively, loan growth is likely to end 2025 at ~5% versus our forecast of 5.2%. Where we would like to see a pick-up is in terms of business loans growth to drive lending growth in 2026, where we have forecasted stable loan growth of 5.0%, against a GDP growth forecast of 4.5%. POSITIVE maintained on the sector and our 3 top BUYs continue to be CIMB, AMMB and ABMB.
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| LIM & TAN | DBS GROUP RESEARCH |
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We highlight the key points from Keppel Ltd’s ($10.35, up 0.03) CEO’s year end speech and 2026 outlook:
2025 was a year of strong progress for Keppel. Despite a turbulent and uncertain world, we pressed ahead with and are seeing the results of our transformati on as a global asset manager and operator — delivering strong returns to our investors, while creating real assets and solutions that meet the world’s pressing needs. At our annual townhall, the Global Keppelites Forum, in February 2025, I shared three ideas on how we can accelerate our transformati on and unlock the full potential of Keppel. We continue to remain constructive on Keppel Ltd even though it has done well in 2025, as we believe that management’s transformation strategy into a global asset operator is only half way done. Hence, the re-rating process remains in force. Consensus 1 year target price of $11.40 implies upside of 10%. We maintain an Accumulate rating on Keppel Ltd.
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Sale of PSV; Rise of newbuild activities on the horizon
Divestment of a 4,000 DWT mid-sized PSV for USD20.5mn (c.RM83.2mn), crystallising an estimated c.RM50mn gain in FY25. Transaction underscores disciplined capital recycling and highlights that vessel book values are at least 50% below current resale values. Proceeds will be redeployed into shipbuilding and fleet expansion, positioning Nam Cheong to capture the next OSV newbuild and charter upcycle. Re-rating catalysts in sight – OSV newbuild contracts, re-deployment of two workboats and one AHTS; Reiterate BUY and TP SGD1.25.
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