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UOB KAYHIAN |
UOB KAYHIAN |
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Singapore Technologies Engineering (STE SP) 1Q26: Strong Start To The Year; Record Orderbook And Robust Contract Pipeline Underpin Medium-term Growth
Highlights • STE’s 1Q26 revenue of S$3.26b (+11% yoy) was in line with our expectation, at 23.8% of our full-year forecast. The growth was driven by all segments. • Net profit was guided to have grown faster at a rate in excess of 15%. Recordhigh orderbook of S$34.5b and robust contract win momentum across all segments underpin STE’s medium-term growth outlook. Strong contract win momentum is expected to continue, as management is actively pursuing US$11b worth of international defence contracts and S$6b worth of smart mobility projects in the next two years.
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CapitaLand Integrated Commercial Trust (CICT SP) Strengthens Orchard Foothold With Freehold Paragon
Highlights • Paragon is a freehold upscale mall in the tightly held Orchard Road shopping corridor. Highly sought after medical suites accounted for more than 80% of its office annex. The acquisition is DPU accretive by 1.7%. • 1Q26 results were in line with expectations with NPI growing 7.9% yoy. Average cost of debt receded 0.5ppt yoy to 2.9%. • Maintain BUY. Target price: S$3.06.
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UOB KAYHIAN |
MAYBANK SECURITIES |
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Keppel (KEP SP) M1 Sale Is Deferred, Not Derailed
Highlights • Failure of the M1 deal is a counterparty problem, not an M1 or Keppel problem as the IMDA alleges that Simba used spectrum in an unauthorised manner. • Unchanged plans for S$2b-3b in asset monetisation this year with S$385m announced ytd. • We see this as a sentiment overhang, not a fundamental re-rating. Maintain BUY with an unchanged target price of S$13.23.
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Netlink NBN Trust (NETLINK SP) Anchor of stability; Retain BUY
FY26: stable yield; resilient cash flows NetLink delivered another stable year, with FY26 DPU rising 1% YoY to 5.42 SGD cents, implying an attractive ~5% yield. While earnings were down 13% YoY, impacted by higher depreciation and interest costs linked to elevated capex and the Seletar Central Office, operating cash flows remained broadly stable YoY. Importantly, management reiterated expectations for stable DPU going forward, supported by resilient cash generation under its regulated RAB framework. We continue to view NetLink as one of Singapore’s most defensive yield names, underpinned by highly visible and regulated cash flows. Maintain BUY at a higher TP of SGD1.10 on DCF roll-forward and a lower WACC of 6.4%.
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| LIM & TAN | DBS GROUP RESEARCH |
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The Board of Directors of Frencken Group Limited ($3.04, down 14 cents) wishes to provide a voluntary update on the Group’s business and financial performance for the three months ended 31 March 2026 (“1Q26”). During 1Q26, the Group’s Mechatronics operations in Asia (“Mechatronics Asia”) recorded continued revenue growth. This positive sales momentum provided a buffer against the anticipated easing in business volume at the Mechatronics operations in Europe (“Mechatronics Europe”) as previously guided in the Company’s FY2025 results announcement. As Mechatronics Europe positions itself for a pick-up in business activity in the second half of this year, the Group envisages improving momentum for the remainder of the year. It also expects to deliver higher revenue and profit in FY2026 as key customers’ outlook remain positive. Despite the weaker 1Q26 performance, management remains upbeat about FY26 performance due to 2H26 strong rebound expected and consensus is expecting FY26 profit to grow 20% to $44mln, implying a forward PE of 30x and price to book ratio of 2.7x. Div yield is only 1%. With its high valuations and consensus 1 year target price banded around current price level of $3.10-3.20 level, we would “HOLD” Frencken and await a better entry level.
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City Developments Ltd
Experienced Steward Returns to CDL Mr. Kwek Leng Peck returns to CDL as Vice Chairman and Non-Executive Director from 1 June 2026, marking a significant leadership development amid the group’s ongoing strategic review. His return comes at a pivotal time as CDL evaluates capital allocation, portfolio optimisation and longer-term value-unlocking initiatives. Mr. Kwek currently chairs Hong Leong Asia, which has seen a substantial re-rating in recent years driven by strong earnings execution, disciplined capital allocation and favourable industry tailwinds. BUY Call, TP SGD 12.00
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