Broker’s pick today: Key Trends, Hot Stocks & Must-Know Risks.

1. Financial Markets Overview

US stocks remained mixed, with the S&P 500 up slightly (+0.03%) and the Nasdaq Composite declining (-0.36%). The Dow Jones Industrial Average (DJIA) rose 0.28%, supported by strong earnings from Coca-Cola and Apple.
Gold prices hit a new peak of US$2,942 per ounce, reaffirming its role as a hedge against economic uncertainties.
The US Federal Reserve signaled stable interest rates, stating they remain in a “good place” amid inflation concerns.

The Straits Times Index (STI) closed at 3,860.8 (-0.4%), while REITs held steady despite financing cost pressures.
Singapore’s 10-year bond yield fell to 2.9%, reflecting investor appetite for defensive assets.

Revenue declined by 1% YoY due to reduced regulated pricing.
Residential connections remained stable, while non-building address point (NBAP) connections grew 2% QoQ, supported by Smart Nation initiatives.
BUY rating maintained, with a target price of SGD 0.97 and a 6% dividend yield.

ISOTeam’s AI-powered drone painting technology is expected to cut costs by 30-40% and enhance competitiveness.
FY25 expected to be a major turnaround year, with 230% YoY profit growth and a SGD 202.4 million orderbook.
Stock initiated at BUY with a target price of SGD 0.09, with risks including labour shortages and regulatory hurdles.

Facing lease expirations for key US data center tenants, potentially impacting revenue by 1.2-1.5%.
Management is exploring re-leasing, conversion, or divestment strategies to mitigate risks.
Distribution yield remains attractive at 6.5%, making it a defensive pick in the REIT sector.

DPU for FY24 fell 4.8% YoY, impacted by Indonesian Rupiah and Japanese Yen depreciation.
Healthcare properties in Indonesia and Singapore posted rental income growth in local currency terms.
A strategic review, including potential asset sales, is underway, which could drive future stock performance.

Cuscaden Peak has proposed to privatise Paragon REIT at SGD 0.98 per unit.
The offer price represents a 10.9% and 12.8% premium over the 1-month and 12-month volume-weighted average prices, respectively.
Cuscaden plans a major SGD 300-600 million asset enhancement initiative (AEI) for Paragon Mall, aiming to modernize it and counter rising Orchard Road competition.
DPU could decline by 21.4-64% during the AEI period, making privatisation an attractive exit for unitholders.
HOLD rating maintained, with an increased target price of SGD 0.98 due to limited upside in the near term.

ISDN Holdings Ltd expects FY24 net profit to grow 60.4% YoY, driven by recovery in industrial automation (IA) in China.
Expansion into Malaysia and Taiwan aims to diversify revenue streams.
Stock upgraded from HOLD to ADD, with a revised target price of SGD 0.35 (+14.8% upside).

Industrial Automation & Smart Infrastructure: Companies like ISOTeam (drone painting) and NetLink NBN Trust (Smart Nation fiber deployment) are leveraging technology for cost efficiency.
Healthcare REITs: First REIT remains a stable defensive play, despite currency headwinds.
Privatisation Plays: Paragon REIT’s offer could benefit unitholders seeking an exit ahead of major AEI disruptions.

Data Centers & Industrial REITs: Lease expirations pose short-term risks, but long-term demand remains strong.
Construction: Labour costs and regulatory challenges could pressure margins, though automation provides an edge.

Global inflation & interest rate trends: The Fed’s monetary policy remains a critical factor in market liquidity.
US-China trade tensions & tariffs: A continued dispute could hurt export-driven sectors and industrial investments.
Currency risks: The weakening Indonesian Rupiah and Japanese Yen remain concerns for Singapore-based REITs with international exposure.

Final Verdict: ISOTeam = The Most Bullish Stock

With its pioneering technology, strong government support, record-high orderbook, and massive earnings rebound, ISOTeam stands out as the most bullish pick for high-growth investors in 2025!

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