A Comprehensive Analysis of Key Companies in the Singapore Financial Landscape
Report by Lim & Tan Securities
Date: December 13, 2024
Introduction
The Singapore financial landscape is a bustling hub of activity, with various companies making significant strides in their respective sectors. In this detailed analysis, we delve into the performance and strategies of key players, offering a comprehensive overview of their current standing and future prospects.
AIMS APAC REIT (AAREIT)
AIMS APAC REIT, trading at S\$1.25, has maintained its price while advancing several key sustainability initiatives. Sustainability is a pivotal focus for AAREIT, as they aim to reduce scope 2 carbon emissions by 42% from FY2020 to FY2030. The REIT has embarked on Phase 2 of its rooftop solar panel system across three Singapore properties, targeting a capacity of 3.65 MWp to avoid nearly 2,000 tonnes of carbon emissions annually. Additionally, AA REIT has installed EV fast-charging stations at four properties and a smart lighting system at 20 Gul Way to enhance energy efficiency.
The introduction of a smart metering system across 15 properties will provide tenants with real-time energy consumption data. This initiative empowers tenants to reduce their carbon footprint and optimize operating costs. The CEO, Mr. Russell Ng, highlights these sustainability efforts as milestones in their ESG journey. AAREIT is capitalized at \$1.02 billion, trades at 1.0x P/B, and offers an attractive annualized yield of 7.5%. The “Accumulate” rating is maintained with a consensus target price of \$1.47, implying an 18% potential upside.
XMH Holdings
XMH Holdings, valued at S\$0.365 per share, reported a significant net profit increase to S\$12.6 million for 1HFY2025, up 94.5% from the previous year. Despite a 5.8% decrease in revenue to S\$66.9 million, the company achieved an improved gross profit margin of 36.3%. This rise is attributed to increased demand for engines and spare parts in the Distribution and After-Sales segments and better margins in the Project segment.
The Group anticipates that current business trends will persist over the next 6 to 12 months, driven by robust order books and a steady pipeline of deliveries in the Distribution and Project segments. XMH Holdings is capitalized at S\$40.0 million and trades at an annualized P/E of 1.6x and P/B of 0.6x. With a dividend yield of 9.6%, and the potential for higher dividends this year, XMH Holdings recently exited the SGX watchlist. The recommendation is to “Accumulate” due to its low valuations, attractive yield, and optimistic outlook.
Institutional and Retail Investment Insights
Institutional investors exhibited a net buy of S\$330.5 million, while retail investors recorded a net sell of S\$373.0 million for the week of December 2, 2024. Key institutional net buys included DBS (S\$100.0 million), Yangzijiang Shipbuilding (S\$89.6 million), and Suntec REIT (S\$77.1 million). Conversely, retail net buys were led by Singtel (S\$41.7 million), OCBC (S\$23.6 million), and CapitaLand Integrated Commercial Trust (S\$7.9 million).
Sector-wise, institutional investors favored Financial Services, Industrials, and Technology sectors, while retail investors showed interest in REITs and Technology sectors. The overall market sentiment indicates a cautious yet optimistic approach towards the financial markets.
Dividend Announcements
- KSH Holdings: 0.5c Interim (Ex-Dividend Date: 29 Nov, Payable: 9 Dec)
- Old Chang Kee: 1c Interim (Ex-Dividend Date: 29 Nov, Payable: 20 Dec)
- UMS Holdings Ltd: 1c Interim (Ex-Dividend Date: 4 Dec, Payable: 16 Dec)
- GP Industries Ltd: 1.5c Interim (Ex-Dividend Date: 9 Dec, Payable: 17 Dec)
Conclusion
The Singapore financial sector continues to show resilience with companies like AIMS APAC REIT and XMH Holdings leading the way in sustainability and profitability respectively. Investors are advised to stay informed and consider the potential for growth and yield in these dynamic market conditions. As always, a balanced and informed approach to investment is recommended.
