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UOB KAYHIAN |
UOB KAYHIAN |
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Banking 3Q26 Results Round-up: NII Turns Around Into Upward Trend
Highlights • Banks’ 3Q26 results showed resilient lending and wealth management growth, although weaker trading and investment income weighed on earnings. Asset quality improved across all three banks, with NPL ratios declining by 0.1ppt qoq to 0.9% for DBS, 0.8% for OCBC and 1.5% for UOB. • We upgrade the Banking sector to OVERWEIGHT due to rising SORA, healthy lending demand and wealth inflows, which will support earnings growth. Our preferred pick is DBS (BUY/Target: S$84.70) due to its wealth management leadership and strong deposit franchise. We lowered our target price for OCBC (BUY/Target: S$33.00) as its regional growth strategy is tempered by near-term uncertainties in Indonesia.
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Frasers Logistics & Commercial Trust (FLT SP) 2HFY26: Logistics Strength But Higher Gearing Limits Debt Headroom
Highlights • FLT reported 2HFY26 DPU of 2.95 S cents, flat yoy due to lower capital distributions from past divestment gains. NPI grew 9.6% yoy, supported by rental uplift for logistics properties, stronger AUD and EUR exchange rates, higher occupancy at ATP, and recent logistics acquisitions in Europe. • FLT's logistics portfolio remained resilient with occupancy of 99.1%, with virtually full occupancies in Australia, Europe and the UK. Management continues to backfill vacant space at ATP and saw stronger performance from Farnborough Business Park and Blythe Valley Park in the UK. • FLT continues to reposition towards logistics assets, targeting allocation of 85% over time through acquisitions in Europe and Singapore. Downgrade to HOLD due to limited upside with target price at S$0.98.
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| UOB KAYHIAN | UOB KAYHIAN |
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Oversea-Chinese Banking Corp (OCBC SP) 3Q26: Banking Strength Offsets Insurance Weakness
Highlights • OCBC reported 3Q26 net profit of S$2,042m, up 3% yoy but down 8% qoq, as weaker Great Eastern investment returns tempered record banking profits. Strong loan growth supported NII, while fees remained near record levels and wealth AUM reached S$358b. • Asset quality improved. NPLs fell 3% qoq to S$3,044m due to recovery from real estate exposures in China. New NPLs were benign at S$127m as NPL ratio improved 0.1ppt qoq to 0.8%. Credit costs declined to 6bp. • OCBC aims to grow domestically in Malaysia and Indonesia under its New Frontier strategy. While Malaysia is growing from strength to strength, Indonesia faces potential crunch of being relegated to a Standalone Market status by MSCI. Maintain BUY with a lower target price of S$33.00.
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Venture Corporation (VMS SP) 3Q26: Broadening Growth Led By Portfolio B; Maintain BUY
Highlights • 9M26 revenue of S$2,145.1m and PATMI of S$187.1m met 80.4% and 76.6% of our full-year forecasts respectively; earnings were broadly in line. • Portfolio B grew 38.1% yoy on production ramp-ups and market share gains; recovery in life science segment supported Portfolio A’s growth. • Maintain BUY with a target price of S$18.30, pegged to 20.2x 2027F PE. Broadening demand and a strong balance sheet support our view.
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| MAYBANK SECURITIES | DBS GROUP RESEARCH |
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MoneyMax Financial Services (MMFS SP) Striking gold on multiple fronts
Initiate coverage with BUY and TP of SGD0.69 We initiate coverage on MoneyMax with a BUY and TP of SGD0.69. We see MoneyMax as a structural winner in Singapore and Malaysia’s pawnbroking and gold markets, with three mutually reinforcing growth engines: a) a fast-scaling Malaysian outlet network; b) a high-margin, gold-backed pawn loan book; and c) gold retail riding structurally higher gold prices. Despite the highest ROE among its peers, it trades at only 4.8x FY27E P/E. Our TP is based on peers’ market-cap-weighted average 7.9x FY27E P/E. Risks: a sharp gold price correction, regulatory tightening and operational lapses.
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Frasers Centrepoint Trust
CIC and PGIM’s 50% stake in NEX reportedly up for sale at SGD 1.2-1.25bn; FCT holds ROFR Broadly DPU-neutral initially at -0.5% to +0.5% with estimated SGD525mn EFR, but a strategic acquisition with earnings uplift post-AEI Alternative funding structure could potentially be explored, including partnering with Sponsor or capital recycling through divestments Maintain BUY and unchanged TP of SGD 2.50
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