Lim & Tan Securities

Date of Report: April 25, 2025

Geo Energy Resources: A Coal Mining Company Poised for Growth

Financial Markets Overview

The FSSTI Index closed at 3,831.9, showing no change, with a month-to-date (MTD) decrease of -3.5% and a year-to-date (YTD) increase of 1.2%. Other key indices include:

• INDU Index: 40,093.4 (1D: 1.2%, MTD: -4.5%, YTD: -5.8%) [[1]]
• SPX Index: 5,484.8 (1D: 2.0%, MTD: -2.3%, YTD: -6.7%) [[1]]
• CCMP Index: 17,166.0 (1D: 2.7%, MTD: -0.8%, YTD: -11.1%) [[1]]
• UKX Index: 8,407.4 (1D: 0.1%, MTD: -2.0%, YTD: 2.9%) [[1]]
• NKY Index: 35,039.2 (1D: 0.5%, MTD: -1.6%, YTD: -12.2%) [[1]]
• HSI Index: 21,909.8 (1D: -0.7%, MTD: -5.2%, YTD: 9.2%) [[1]]
• SHCOMP Index: 3,297.3 (1D: 0.0%, MTD: -1.2%, YTD: -1.6%) [[1]]
• VIX Index: 26.5 (1D: -7.0%, MTD: 18.8%, YTD: 52.6%) [[1]]

The Singapore market saw a daily market value of S\$1,586.1 million and a daily market volume of 1,176.8 million shares. The 52-week STI high was 4,005.2, and the low was 3,198.4. [[1]]

Key Interest Rates

• 3 Mth SGD SORA: 2.4 (1D: -0.4%, MTD: -4.7%, YTD: -20.5%) [[1]]
• SG 10 YR Bond Yield: 2.5 (1D: 0.4%, MTD: -5.6%, YTD: -11.4%) [[1]]
• US 10 YR Bond Yield: 4.3 (1D: -1.5%, MTD: 2.6%, YTD: -5.6%) [[1]]

US Futures

• Dow Jones: 40,263.0 (1D: 0.0%, MTD: -4.7%, YTD: -5.8%) [[1]]
• S&P 500: 5,530.8 (1D: 0.4%, MTD: -2.2%, YTD: -7.7%) [[1]]
• NASDAQ: 19,420.3 (1D: 0.5%, MTD: -0.1%, YTD: -9.5%) [[1]]

Commodities

• Gold: 3,351.5 (1D: 0.1%, MTD: 7.3%, YTD: 27.7%) [[1]]
• Crude Oil: 63.6 (1D: 0.9%, MTD: -11.1%, YTD: -11.4%) [[1]]
• Baltic Dry: 1,300.0 (1D: 3.1%, MTD: -18.6%, YTD: 30.4%) [[1]]
• Crude Palm Oil: 4,059.0 (1D: 0.6%, MTD: -5.9%, YTD: -1.0%) [[1]]

Market Commentary

On Thursday, the S&P 500 rose 2.0%, the tech-heavy Nasdaq composite increased 2.7%, and the Dow Jones moved up 1.2%. [[1]]

Idea of the Day: Geo Energy Resources (Geo)

Geo Energy Resources (Geo) is highlighted as a coal-mining company set to benefit from upcoming infrastructure development. The report forecasts EBITDA levels to triple from US\$60 million in FY24 to US\$168 million in FY26F upon completion of the development. [[1]]

Strategic Infrastructure Investment

A US\$150 million investment into a new 92 km hauling road and a jetty, expected to be completed in 1H26, is projected to yield significant benefits. This includes the use of trucks capable of carrying three to four times their current load, offering faster and safer navigation. [[2]] Geo also has the opportunity to generate additional revenue by leasing its infrastructure to other miners. [[2]]

Increased Coal Sales and Production

Geo is targeting total coal sales of 10.5-11.5 million tonnes in 2025, a 33%-46% year-over-year increase. The newly acquired TRA coal mine contributed 1.1 million tonnes in FY24, and Geo acquired an additional 15% of TRA at a 12.5% discount in March 2025, bringing its total effective interest to 75.1%. Production volumes are expected to steadily increase to 25 million tonnes by FY29. [[2]]

Sustained Coal Demand in China

China’s demand for economic growth continues to exceed the power output of existing clean energy sources, maintaining reliance on coal imports, particularly from Indonesia. The report anticipates that demand and price for quality coal will remain robust, benefiting Geo, whose largest customer base is in China. [[3]]

Investment Recommendation

A “BUY” recommendation is initiated for Geo Energy Resources with a target price (TP) of S\$0.60, based on DCF (WACC: 12.5%). Key factors include expected increase in 2025 coal sales, addition of coal reserves, strategic infrastructure investment, and attractive valuations with dividend returns. The FY25F net profit estimate is US\$63.0 million (+68% yoy). Geo trades at 5.9x forward P/E and 0.8x P/B, with a FY25F/FY26F dividend yield of 5.1%/7.4%. [[4]]

FSSTI Stock Selection

Highest Consensus Forward Dividend Yield (%) [[5]]

• DBS BANK: 7.11
• FRASERS LOGISTICS TRUST: 7.00
• MAPLETREE INDUSTRIAL TRUST: 6.80
• MAPLETREE LOGISTICS TRUST: 6.72
• VENTURE CORP: 6.68

Lowest Consensus Forward P/E (X) [[5]]

• YANGZIJIANG SHIPBUILDING: 6.51
• JARDINE CYCLE & CARRIAGE: 7.35
• JARDINE MATHESON: 7.57
• SINGAPORE AIRLINES: 8.68
• UOB BANK: 9.56

Lowest Trailing P/B (X) [[5]]

• HONGKONG LAND: 0.31
• UOL GROUP: 0.42
• JARDINE MATHESON: 0.44
• CITY DEVELOPMENTS: 0.51
• MAPLETREE PAN ASIA COMM TRUST: 0.70

Lowest Trailing EV/EBITDA (X) [[5]]

• YANGZIJIANG SHIPBUILDING: 3.22
• GENTING SINGAPORE: 5.78
• JARDINE CYCLE & CARRIAGE: 5.96
• DFI RETAIL GROUP: 6.32
• SATS: 8.21

Suntec REIT Analysis

Suntec REIT announced improved distributable income of \$45.9 million for 1Q 25, 4.3% higher than 1Q 24. Distribution per unit (DPU) to unitholders was 1.563 cents, or 3.4% higher year-on-year. All properties, except for 55 Currie Street, Adelaide, registered stronger operating performance. [[5]]

Management Commentary

Mr. Chong Kee Hiong, Chief Executive Officer of the Manager, noted strong operating performances in Singapore Office, Retail, and Convention, as well as the UK portfolios. Financing costs for the REIT also declined year-on-year due to refinancing efforts in FY24 and debt reduction from divestment of strata office units. [[5]]

Suntec REIT completed \$730 million refinancing due in 2025 and 2026, expected to result in interest savings of approximately \$1.8 million per annum. The company remains focused on strengthening the operating performance of its properties amidst global macroeconomic uncertainties. [[6]]

Market Outlook

The interest rate easing cycle is expected to be gradual. Refinancing of debt due in 2025 is expected to be completed in the first half of 2025, with all-in financing costs remaining elevated at approximately 4.0%. Cautious demand for office spaces is expected, with positive rent reversion being modest, in the range of 1% to 5%. [[6]]

Property Performance

The Singapore office portfolio is expected to remain stable, supported by healthy occupancies and past quarters of robust rent reversions. Stable performance is expected at Suntec City Mall, supported by high committed occupancy and positive rent reversions. Long-term MICE growth in Singapore is anticipated, with stable performance expected at Suntec Convention. [[6]]

Australia and UK Portfolios

Office market vacancies in Melbourne and Adelaide CBD are expected to remain elevated. The Australia portfolio is expected to remain stable, supported by the Sydney and Melbourne properties. The United Kingdom Portfolio is expected to be stable, with healthy committed occupancy and long WALE. [[7]]

Investment Recommendation

Suntec REIT’s market cap stands at S\$3.4 billion and currently trades at 0.6x PB, with a dividend yield of 5.4%. The consensus target price stands at S\$1.25, representing 8% upside from the current share price. A “HOLD” recommendation is maintained on Suntec REIT. [[7]]

Macro Market News Affecting US, Hong Kong and China Markets

China/HK: Nike’s Expansion in Shanghai

Nike is opening a new creative studio in Shanghai, named Icon Studios, to create content for e-commerce, social media, and live streaming. This investment aims to get closer to Chinese shoppers and recapture market share, with China accounting for US\$7.5 billion in annual revenue in fiscal 2024. The company also has a technology center in Shenzhen and a sports research lab in Shanghai. Former Apple marketing executive Jason King is leading Icon for Nike in Shanghai. [[7]]

US: BCA Research on Market Sentiment

BCA Research indicates that the sharp drop in March’s NFIB survey reinforces a defensive asset allocation. They remain overweight government bonds and underweight risk assets, while tactically shorting the January 2026 fed funds futures contract to hedge short-term inflation risk. [[8]]

The NFIB Small Business Optimism Index fell more than expected to 97.4 from 100.7, signaling increasing policy risk. Confidence and hiring plans declined further, while price pressures moderated. Only a net 21% of respondents expect better business conditions in six months, down from 52% in December. [[8]]

BCA Research’s Global Fixed Income strategists recommend long duration exposure, curve steepeners, and an underweight in corporate bonds relative to government bonds, as global recession risks rise. [[8]]

Share Transactions (1 APR’25 – 24 APR’25)

Acquisitions [[9]]

• Hyphens Pharma: Tan Kia King acquired 88,000 shares at S\$0.285
• Valuemax: Yeo Hiang Nam acquired 284,100 shares at S\$0.50
• Audience Analytics: Ng Yan Meng acquired 76,000 shares at S\$0.28
• Singpost: Temasek (via DBS) acquired 300,000 shares at S\$0.51
• UMS Integration: Catcher Tech Co Ltd acquired 950,000 shares at S\$0.995
• Zixing: Thomas Clive Khoo acquired 5,110,000 shares at S\$0.027
• Unionsteel Holdings Ltd: Ang Yew Chye acquired 45,000 shares at S\$0.51

Disposals [[9]]

• CNMC Goldmine: Choo Chee Kong disposed of 750,000 shares at S\$0.38
• Singpost: Temasek (via DBS) disposed of 350,000 shares at S\$0.55

Share Buyback [[9]]

*5.2% of current buy back maximum mandate of 85,328,308 shares

*15.3% of DBS’ \$3billion buy back target absolute \$ mandate

Institutional and Retail Fund Flows (Week of 14 April 2025)

Top 10 Institution Net Buy (+) Stocks (S\$M) [[10]]

• Singtel: 157.1
• DBS: 59.3
• ST Engineering: 38.9
• UOB: 37.2
• SGX: 28.8
• ComfortDelGro: 9.7
• Frasers Centrepoint Trust: 9.6
• SIA: 8.9
• Seatrium: 7.7
• Keppel DC REIT: 5.2

Top 10 Institution Net Sell (-) Stocks (S\$M) [[10]]

• Wilmar International: (19.7)
• OCBC: (17.3)
• Sembcorp Industries: (7.6)
• CapitaLand Ascendas REIT: (7.3)
• CapitaLand Investment: (6.6)
• Venture Corporation: (6.5)
• CapitaLand Integrated Commercial Trust: (6.1)
• Yangzijiang Shipbuilding: (5.6)
• Yangzijiang Financial: (5.2)
• ESR REIT: (5.0)

Top 10 Retail Net Buy (+) Stocks (S\$M) [[10]]

• OCBC: 29.0
• Yangzijiang Shipbuilding: 18.3
• Wilmar International: 7.8
• Yangzijiang Financial: 7.1
• Keppel: 6.5
• SATS: 5.1
• Venture Corporation: 4.8
• Aztech Global: 4.3
• CapitaLand Investment: 4.0
• UOB: 3.4

Top 10 Retail Net Sell (-) Stocks (S\$M) [[10]]

• Singtel: (102.1)
• SGX: (28.0)
• ST Engineering: (25.1)
• DBS: (15.8)
• Frasers Centrepoint Trust: (10.4)
• SIA: (9.6)
• ComfortDelGro: (8.0)
• CapitaLand Ascendas REIT: (7.7)
• Seatrium: (6.1)
• Frasers Logistics & Commercial Trust: (5.2)

Institutional investors net buy (+S\$273.0m) vs. (-S\$178.9m) a week ago

Retail investors net sell (-S\$161.8m) vs. (+S\$776.0m) a week ago

Institutional Investors Net Buy/Sell (S\$M) by Sector [[11]]

STI Constituents – Week of 14 Apr [[12]]

Retail Investors Net Buy/Sell (S\$M) by Sector [[12]]

Dividends / Special Distributions / Others (List Is Not Exhaustive) [[13]]

SGX Watch-List (List Is Not Exhaustive) [[14]]

• Amos Group (06-Jun-23)
• Ascent Bridge Ltd (04-Dec-19)
• ASTI Holdings (06-Jun-19)
• British And Malayan Hldgs (06-Jun-23)
• CH Offshore (06-Jun-23)
• Cosmosteel (05-Jun-18)
• Datapulse Technology (06-Jun-23)
• Debao Property (04-Dec-19)
• Eneco Energy (04-Dec-19)
• Full Apex (Holdings) (05-Jun-17)
• GRP Limited (06-Jun-23)
• Interra Resources (05-Dec-17)
• Intraco Ltd (06-Jun-23)
• IPC Corp (06-Jun-23)
• Jadason Enterprises (06-Jun-23)
• Jasper Investments (Salt Investments) (06-Jun-23)
• Manufacturing Integration Technology (06-Jun-23)
• Metis Energy (05-Dec-18)
• Raffles Infrastructure (06-Jun-19)
• Shanghai Turbo (06-Jun-23)
• SMI Vantage (04-Dec-19)
• Trek 2000 Intl (06-Jun-23)
• United Food Hldgs (06-Jun-19)