Maybank Singapore Daily (Apr 30, 2025): Sheng Siong Profit Up, Wilmar Stable, CLAS Buy, ASEAN Internet Growth

Maybank Research Pte Ltd 30 April 2025

This report delves into recent market-shaping news, focusing on quarterly results from key players like Sheng Siong and Wilmar International, operational updates from Rex International, and performance analysis of CapitaLand Ascott Trust and the ASEAN Internet sector.

Sheng Siong Reports Strong Q1 2025 Growth Amid Cautious Outlook

Sheng Siong Group Ltd announced its financial results for the first quarter of 2025 (1Q25), showcasing resilience and growth.

• Net Profit: Reached SGD38.5 million, marking a 6.1% increase year-over-year (YoY).
• Revenue: Grew by 7.1% YoY to SGD403 million. This growth was primarily attributed to contributions from eight new store openings across 1Q25 and the full year 2024 (FY24), alongside increased sales during the Hari Raya festive period in March.
• Gross Profit: Growth was bolstered by improvements in the group’s sales mix, which successfully helped to mitigate the impact of higher operating costs.

Despite the Singapore Ministry of Trade and Industry (MTI) adopting a more cautious stance on the 2025 economic outlook, Sheng Siong remains optimistic. The company believes its strong value-for-money proposition, underpinned by competitively priced goods and a robust house brand portfolio, positions it effectively to cater to consumer demands. This is particularly relevant as more households prioritize quality essentials at affordable prices.

Wilmar International Q1 2025 Core Profit Rises, Results Meet Expectations

Wilmar International Limited reported its 1Q25 results, which were generally in line with market expectations.

• Core Net Profit After Tax (Core-NPAT): Recorded at USD343 million, up 4% YoY but down 2% quarter-over-quarter (QoQ). This figure represents approximately 24% of both street consensus and Maybank IBG (MIBG) full-year estimates.
• Revenue: Increased by 3% YoY to USD62.9 billion, trending at 22% of street and 21% of MIBG full-year forecasts.
• Performance Drivers: The first quarter performance was significantly boosted by contributions from Associates and Joint Ventures (JVs). On the operational front, growth stemmed mainly from improved performance in the Food Products and Plantation & Sugar Milling segments, alongside higher contributions from associates/JVs.
• Segment Volumes: Food product volumes saw a 3% YoY increase. Conversely, Feed and Industrial Products volumes decreased by 3% YoY, primarily driven by a substantial 42% YoY decline in Sugar volumes.
• Margins & Cash Flow: Management highlighted that operating conditions for the tropical oils business remained challenging in 1Q25, although crushing margins saw improvement during the quarter. EBITDA margins improved by 90 basis points (bps) YoY. Operating cash flows were strong at USD2.1 billion (up 16% YoY), and Free Cash Flow (FCF) reached USD1.8 billion (up 32% YoY).
• Outlook: Wilmar’s management anticipates that tariff uncertainties could introduce increased market volatility. However, they expect the company’s overall business performance to remain satisfactory, supported by its product diversification strategy and integrated business model.

Rex International Subsidiary Advances Benin Field Development

Rex International Holding provided an update on its operations in Benin.

• New Contracts: Akrake Petroleum Benin, an indirect subsidiary of Rex Intl, has signed contracts for key production infrastructure. This includes a mobile production unit (MOPU) and an Aframax tanker designated to serve as a Floating Storage and Offloading (FSO) unit for the Akrake field development.
• MOPU Details: The MOPU will be converted from a medium-sized drilling rig and fitted with a purpose-built process package.
• Operator & Ownership: Akrake Petroleum, a wholly-owned subsidiary of Lime Petroleum, acts as the operator of the Sm Field in Benin. Lime Petroleum previously signed a contract on April 4th for a modern jack-up rig intended for an anticipated 120-day drilling campaign in Benin. Akrake holds a working interest of approximately 76% in the field.
• Development Plans: The company aims to submit a field development plan to Benin’s Ministry of Energy, Water and Mines. The goal is to restart production in the field during the second half of 2025 (2H25). It’s noted that the working interest is subject to the Benin government’s entitlements as per the production sharing contract.

CapitaLand Ascott Trust: Positioning for Resilience with Stable Q1 Growth

CapitaLand Ascott Trust (CLAS) demonstrated resilience in its 1Q results.

• Gross Profit: Increased by 4% YoY overall and 1% YoY on a same-store basis. Growth was driven by accretive asset recycling and improved performance from renovated properties, which helped counter headwinds from higher operating expenses.
• RevPAU Growth: Revenue per Available Unit (RevPAU) grew by 4% YoY, primarily due to higher occupancy rates.
• Singapore Performance: However, on a same-store basis, RevPAU in Singapore experienced a decline. This was attributed to the absence of high-profile events compared to the previous corresponding period.
• Financials: Gearing saw an increase, mainly due to ongoing asset enhancement initiatives. Debt cost and interest coverage ratio remained stable.
• Strategy & Recommendation: CLAS’s focus remains on portfolio reconstitution and delivering stable distributions to unitholders. Maybank maintains a BUY recommendation on CLAS.

ASEAN Internet Outlook: Strong Q1 2025 Momentum Expected for Sea & Grab

The outlook for key ASEAN internet players Sea Limited and Grab Holdings appears positive for 1Q25.

• Expected Growth: Both Sea and Grab are anticipated to report strong YoY growth for 1Q25. Projections include Gross Merchandise Value (GMV) increases of 19% YoY for Sea and 15% YoY for Grab. Adjusted EBITDA is expected to surge by 83% YoY for Sea and 57% YoY for Grab, aligning with their optimistic full-year guidance.
• Seasonal Factors: Seasonal effects stemming from the Lunar New Year and Lebaran periods might exert some downward pressure on QoQ performance.
• Estimates vs. Consensus: Maybank’s Adjusted EBITDA estimates for these companies are currently 3–14% higher than consensus forecasts.
• Risks & Valuation: While near-term growth appears intact, potential macroeconomic risks could impact discretionary consumer demand. In a bear-case scenario, Maybank sees a potential downside of up to 40% for Sea shares and 16% for Grab shares.
• Forecasts & Recommendation: Maybank has slightly trimmed forecasts and target prices for Sea but maintains a BUY recommendation on both Sea and Grab.