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CGS INTERNATIONAL |
UOB KAYHIAN |
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Keppel Ltd Extension of deadline to sell M1
■ KEP and Simba have extended the date to divest M1 by 8 weeks to 21 May 2026; this is likely to be a focus during its 1Q26F results release on 23 Apr. ■ We think enhanced IMDA scrutiny of critical infrastructure and cyber security could be some of the reasons behind the extension of the long-stop date. ■ Deal completion is a key re-rating catalyst; however, any change to deal terms to accommodate IMDA’s concerns poses a downside risk.
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Lendlease Global Commercial REIT (LREIT SP) Maintaining Focus On Expansion In Singapore
Highlights • The acquisition of the remaining 30% interest in PLQ Mall was marginally accretive, increasing pro forma FY25 DPU by only 0.2%, due to a non-renounceable 119-for-1,000 preferential offering to raise S$197m. Aggregate leverage was reduced from 38.1% to 37.6% . • PLQ Mall provided positive rental reversion in the teens in 1HFY26. Management has commenced reconfiguration for NLA of 16,000sf at Levels 1 & 2, which would provide an uplift to rental rates. • LREIT provides an attractive FY26 DPU yield of 7.0% (CICT: 5.1%, FCT: 5.5%, SGREIT: 7.0%). Maintain BUY. Target price: S$0.78.
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MAYBANK SECURITIES |
MAYBANK SECURITIES |
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Singapore Industrials Offshore upcycle vs shipbuilding peak Positive, yet selective view; BUY STM/MPM, HOLD YZJ
We initiate coverage with a BUY on Seatrium (TP: SGD3.10) and a HOLD on Yangzijiang (TP: SGD4.15). We favour Seatrium given its >SGD32b pipeline, which supports potential order wins of SGD10–11b pa over FY26–28, alongside improving margins (11% by FY28 vs 3% in FY24) underpinning a 27% FY25-28 EPS CAGR. Geopolitical tensions are also reinforcing energy security, thereby supporting offshore capex. In contrast, YZJ’s USD22b orderbook provides visibility, but revenue growth is set to moderate (FY25– 30 CAGR 7% vs 19% in FY21–25), with margins normalising from 34% and order wins already at a 5-year low (USD2.5b in FY25), albeit supported by a 5–6% dividend yield. Reiterate BUY on Marco Polo Marine (MPM), supported by charter upcycle, offshore wind vessel demand, fleet expansion, and a strong FY26–30 growth runway.
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Yangzijiang Shipbuilding (YZJSGD SP) Order and margins tide easing from here; Initiate HOLD
HOLD: Newbuild cycle and margins past peak We initiate Yangzijiang with a non-consensus HOLD and DCF-based TP of SGD4.15, as we believe both the shipbuilding cycle and margins are past their peak. Yangzijiang remains one of China’s largest merchant shipbuilders, supported by a strong balance sheet and a robust c.USD22.4b orderbook, which provides medium-term revenue visibility and underpins a moderate 5% FY25–28 earnings CAGR. However, as the cycle turns, we expect order momentum to cool, pricing to soften and margins to normalise from unusually elevated levels. Gross margins have risen sharply from 14% in FY21 to 34% in FY25, though management has indicated that 30%+ margins are unlikely to be sustained. Rising domestic competition, softer end-demand and FX headwinds should increasingly cap upside.
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| LIM & TAN | LIM & TAN |
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Stoneweg Europe Stapled Trust / SERT (S$2.23, down 3 cts) announced that through its business trust, it has invested an additional €50 million in AiOnX, the sponsor’s private European data centre development platform, via a mandatory convertible loan (“MCL”).
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We highlight the key points from Hong Leong Asia’s / HLA ($2.85, down 4 cents) annual report. Hong Leong Asia delivered a strong performance in FY2025 despite a challenging global environment marked by geopolitical tensions, trade disruptions, and policy uncertainty. The Group achieved a 28.5% year-on-year increase in profit after tax and minority interests (PATMI) to S$112.8 million, while revenue rose 22% to S$5.2 billion. This growth was driven by solid contributions from its two core segments: HLA’s market cap stands at S$2.1bln and currently trades at 18.9x forward PE and 1.96 PB, with a dividend yield of 1.8%. Consensus target price stands at $4.20, representing 47.4% upside from current share price. Given the pull back in share price as a result of the current war situation, we find HLA price levels to be attractive, given the huge upside potential and strong fundamentals of both its construction and China engine business. As such, we recommend an Accumulate rating on HLA. |
