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CGS INTERNATIONAL |
PHILLIP SECURITIES |
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Seatrium Ltd Maersk uncertainty cleared
■ STM announced dispute resolution with Maersk, following which STM will deliver WTIV Sturgeon to Maersk by Feb 2026. No further legal actions. ■ Around US$110m will be due upon delivery, with the remaining US$250m restructured under a credit agreement over the next 10 years. ■ We estimate higher interest income of c.S$12m p.a. for STM over FY26F27F generated from the WTIV under the credit arrangement. ■ Reiterate Add with an unchanged TP of S$2.67. We do not expect major provisions as WTIV construction remains on track with visible delivery date.
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Phillip 2026 Singapore Strategy Fertile environment for equities
5 January 2026 Review: Singapore equities registered their highest gains in 16 years. The Singapore market was up 22.7% in 2025 (2024: +16.9%). It is now 19% above the all-time high in October 2007, or a 1% p.a. return over 18 years. We don’t think Singapore equities have run up excessively. Banks registered mixed returns, led by DBS attractive yield (Figure 1). The re-rating of the defence sector was a big boost to ST Engineering. Asset recycling and the property sector were a significant source of alpha (Figure 2). Consumer sector largely underperformed (Figure 3). Genting is registering its 2 nd consecutive year of negative returns. REITs are beginning to recover as interest rates decline (Figure 4).
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Equity Strategy Bullish Foundations In Place
For 2026 Highlights • We remain bullish on the Singapore market in 2026 given positive earnings growth prospects as well as funds flow momentum. • We forecast a 2026 year-end target of 5,000 for the STI, implying an 8% upside from current levels. • Key stock picks are CLAR, CLI, CIT, DFI, FR, GENS, KEP, OCBC, SE, ASL, CAREIT, CSE, FEH and VALUE.
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Sea Ltd (SE US) Correction overdone; upgrade to BUY
Risks priced in; growth pillars mostly intact After a ~36% share price correction from its 2025 peak, we see an attractive risk-reward skew for Sea. Ongoing investments in the VIP program & fulfilment strengthen Shopee’s competitive position in ASEAN, while Lazada’s continued decline points to a more rational 2-player market – paving way for lift in 2027 monetisation. In our bear case, intensified competition in Brazil & VIP-related spend reduce Shopee margins by ~30bps; already largely priced into street cuts. While nearterm Shopee monetisation is partly deferred, incremental upside can accrue via Monee. Garena-related single franchise valuation risk is contained by its ~15% SoTP weight. We Upgrade Sea to BUY and retain our USD156 TP.
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| LIM & TAN | MAYBANK KIM ENG |
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Civmec Ltd (S$1.16, up 2 cents) is pleased to advise that it has recently secured a series of new contracts and extensions with a combined value exceeding A$400 million. These awards refl ect the Group’s success in converti ng a strong pipeline of opportuniti es and reinforce Civmec’s strategic focus on conti nued early-contractor involvement, sustainable growth and order book diversifi cati on, whilst underscoring the strength of long-standing relati onships with Tier-1 clients. The A$400 million of new contracts and extensions are expected to be delivered across 2H FY26 and FY27, building upon an uplift in acti vity heading into 2H FY26. Capitalized at S$589mln, Civmec trades at 14.8x forward P/E and 1.3x P/B with a dividend yield of 4.6%. While FY25 was a relati vely weak year due to reduced acti vity levels, the company has maintained dividends with total full year dividends of 6 A cts. Civmec conti nues to add on to its order book with recent contracts exceeding A$400 million, providing visibility for the next couple of years. The company sees acti vity levels recovering in 2HFY26, supported by a robust pipeline of contracts. Consensus target price is S$1.35, representi ng a 16.4% potenti al upside. In view of more promising prospects ahead, we maintain our “Accumulate” recommendati on on Civmec.
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Malaysia Telcos Renewed focus on dividends
Preference for fixed-line The overall outlook for the sector remains mixed in our view, with possible upside risks to dividends (more proactive capital management) in the fixed-line space being offset by potential downside risks to earnings in the mobile space (equity accounting of DNB losses). We maintain our NEUTRAL stance on the sector, with our preferred pick being TM (T MK, BUY, CP: MYR7.93, TP: MYR8.50) for its exposure to data centre theme along with potential upside to dividends.
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