OCBC Investment Research
16 May 2025

Navigating Market Uncertainties: A Deep Dive into Key Singaporean and Asian Stocks

In a landscape marked by trade tensions and fluctuating commodity prices, OCBC Investment Research provides a comprehensive analysis of key stocks in Singapore and Asia. This report, dated May 16, 2025, offers insights into market performance, investment strategies, and specific stock recommendations. Here’s a detailed look at the findings.

Market Commentary: United States

• US stocks experienced a fourth consecutive session of gains, though momentum from earlier trade deals appeared to wane. Soft economic data and a decline in oil prices provided support.
• Benchmark 10-year Treasury note yields fell to 4.437% amid concerns over Donald Trump’s budget package increasing US debt.
• Treasury yields were also impacted by weak retail sales and producer prices data. The Producer Price Index (PPI) for April decreased by 0.5% month-over-month, while March’s figure was revised to flat from a 0.4% decline.
• Retail sales increased by 0.1% in April, but industrial production numbers decreased slightly more than expected.
• Walmart Inc. shares slipped 0.5% after reporting a decline in first-quarter profit despite solid sales and earnings growth. The retailer warned of raising prices due to higher tariffs.
• Value stocks advanced, offsetting a weak performance in technology, retail, and energy shares. The S&P 500 index rose 0.41%, the Dow Jones Industrial Average added 271.69 points (0.65%), and the Nasdaq Composite slipped 0.18%. [[1]]
• President Trump wants Apple to halt iPhone production relocation to India. Starbucks is considering options to revamp its China business, including a potential stake sale.
• UnitedHealth shares declined following a WSJ report of a criminal investigation into possible Medicare fraud.
• Oil futures posted back-to-back losses as President Trump expressed optimism about a nuclear deal with Iran, potentially increasing oil supply. The IEA forecasts a looser supply and demand balance this year despite a slight uptick in demand growth.
• Uncertainties persist as the market assesses the impact of tariffs. Despite easing tensions with China, trade-related headwinds remain. [[1]]

Market Commentary: Europe

• The Stoxx Europe 600 Index increased by approximately 0.56%, with attention focused on corporate earnings. Defensive sectors like utilities and telecoms saw the most gains.
• Energy stocks declined as oil prices fell after reports that Iran might forgo nuclear weapons in exchange for sanctions relief from the US. [[2]]

Market Commentary: Asia

• The MSCI Asia Pacific Index fell by 0.4% as the rally driven by reduced US tariff fears subsided. A stronger yen negatively impacted Japanese equities.
• Tencent shares dipped despite positive earnings, affecting Hong Kong gauges, as investors awaited major Chinese tech reports. Alibaba Group Holding Ltd’s quarterly revenue grew by a disappointing 7%, reflecting pressure on Chinese consumers. [[2]]

Singapore Market Statistics

Here’s a snapshot of the Singapore market statistics:

• Straits Times Index: 3,891.9 (Net Change: 20.8, % Change: 0.5%)
• FTSE ST Financials: 1,554.9 (Net Change: 15.6, % Change: 1.0%)
• FTSE ST REITs: 626.8 (Net Change: -3.5, % Change: -0.6%)
• FTSE ST Real Estate: 618.3 (Net Change: -1.6, % Change: -0.3%)
• Volume (m): 1,442.5 (Change: 354.3, % Change: 32.6%)
• Turnover (m): 1,512.7 (Change: 186.7, % Change: 14.1%)
• 52 week range: 3,198.4 – 4,005.2
• Gainers / losers: 239 / 287 [[3]]

World Indices

A glance at the global indices:

• S&P 500: 5,916.9 (Change: 24.4, % Change: 0.4%)
• DJI: 42,322.8 (Change: 271.7, % Change: 0.6%)
• Nasdaq Comp: 19,112.3 (Change: -34.5, % Change: -0.2%)
• FTSE 100: 8,633.8 (Change: 48.7, % Change: 0.6%)
• STOXX Europe 600: 547.0 (Change: 3.1, % Change: 0.6%)
• Nikkei 225: 37,755.5 (Change: -372.6, % Change: -1.0%)
• Hang Seng Index: 23,453.2 (Change: -187.5, % Change: -0.8%)
• SHSE Comp Index: 3,380.8 (Change: -23.1, % Change: -0.7%)
• SZSE Comp Index: 1,982.9 (Change: -27.6, % Change: -1.4%)
• SHSE SZSE CSI 300: 3,907.2 (Change: -36.0, % Change: -0.9%)
• KLCI: 1,573.0 (Change: -10.5, % Change: -0.7%)
• JCI: 7,040.2 (Change: 60.3, % Change: 0.9%)
• SET: 1,194.5 (Change: -22.2, % Change: -1.8%)
• KOSPI: 2,621.4 (Change: -19.2, % Change: -0.7%)
• TWSE: 21,730.3 (Change: -52.6, % Change: -0.2%) [[3]]

FX & Commodities

Key currency and commodity movements:

• USDSGD: 1.2977 (Change: 0.4%)
• USDJPY: 145.67 (Change: 0.7%)
• USDCNY: 7.207 (Change: 0.0%)
• USDHKD: 7.806 (Change: 0.0%)
• WTI Crude USD/bbl: 61.62 (Change: -2.4%)
• Brent USD/bbl: 64.53 (Change: -2.4%)
• Gold USD/oz: 3,240.1 (Change: 2.0%)
• Silver USD/oz: 32.64 (Change: 1.3%) [[3]]

Research Ideas: ComfortDelGro Corporation (CD SP)

Recommendation: BUY
Fair Value Estimate: SGD1.71

ComfortDelGro (CD) presents a steady growth profile with relatively defensive earnings. Key highlights include:

• 1Q25 results aligned with expectations, driven by FY24 acquisitions.
• Earnings are considered relatively sheltered from tariff risks.
• 1Q25 revenue grew 16.4% YoY to SGD1.2b, and operating profit increased 45.5% YoY to SGD81.5m. PATMI grew 19% YoY to SGD48.3m.
• Revenue from the Public Transport segment grew 2.6% YoY to SGD760.1m. Core OP jumped 52.9% YoY to SGD36.4m.
• The Taxi & Private Hire segment surged 74% YoY to SGD258.1m due to acquisitions.
• The Other Private Transport segment saw a 44.3% YoY increase in revenue to SGD94.3m.
• Inspection & Testing Services segment grew 18.0% and 8.4% YoY in revenue and OP, respectively.
• ESG: ComfortDelGro’s ESG score has improved, with strong governance structures. [[4], [5]]

Research Ideas: Tencent Holdings (700 HK)

Recommendation: BUY
Fair Value Estimate: HKD650.00

Tencent Holdings shows potential for growth acceleration, driven by AI services and strong core business performance. Key points:

• Another quarter of solid beat with revenue and adjusted net profit rising 13% and 22% year-on-year (YoY) respectively, beating consensus estimates by 3- 4%.
• Games revenue accelerated to +24% YoY, thanks to +24% YoY growth in domestic games and +23% YoY growth in international games.
• Online ad revenue accelerated to +20% YoY, driven by ongoing AI upgrades and strong advertising demand.
• Fintech and business services (FBS) revenue further recovered to +5% YoY, driven by cloud and consumer loan.
• Tencent is committed to AI investment and has seen early signs of monetisation with improving ad revenues and games engagement through AI.
• Commitment to shareholders’ return with repurchases of HKD17.1b worth of shares in 1Q25.
• ESG: The upgrade factors in improvements in Tencent’s data security practices. [[5], [6]]

Research Ideas: Bumitama Agri Ltd (BAL SP)

Recommendation: BUY
Revised Fair Value Estimate: SGD0.975

Bumitama Agri Ltd (BAL) demonstrates a strong start to the year with tight supply conditions supporting commodity prices. Key highlights:

• 1Q25 revenue grew 18.6% year-on-year (YoY) to IDR4.6t.
• CPO revenue grew 12% YoY to IDR4.0t, with a 26% jump in average selling price (ASP) to IDR14,700 per kg.
• PK revenue nearly doubled (+88% YoY) to IDR626b, in line with ASP (+94% to IDR10,900 per kg).
• 1Q25 EBITDA improved 36% YoY to IDR1.0t, with EBITDA margin expanding 2.8 percentage points (ppt) to 22%.
• Operating metrics were sequentially weaker QoQ, in line with the low crop cycle, but generally improved YoY.
• ESG: BAL has reduced its greenhouse gas (GHG) emissions intensity versus 2016 baseline by 18% in FY24. [[6], [7]]

Research Ideas: Singapore Post (SPOST)

Recommendation: HOLD
Trim Fair Value Estimate to SGD0.605

Singapore Post (SPOST) is sharpening its focus on its core business amidst a challenging operating environment. Key observations:

• FY25 underlying net profit contracted 40.3% amidst a challenging operating environment.
• Special dividend of 9 Singapore cents per share proposed, representing two thirds of divestment gains.
• 2HFY25 revenue fell 12.1% year-on-year (YoY) to SGD387.5m on a like-for-like basis.
• The Singapore postal and logistics business eked out a 0.2% increase in revenue to SGD259.3m for the year.
• The International business continued to face challenges, with FY25 revenue down 32.5% to SGD202.8m on a further decline in volumes.
• ESG: SPOST’s ESG rating was maintained in Apr 2025. [[7], [8]]

Singapore REITs – Quality Bias Amid a Mixed Outlook

A selective stock-picking approach is recommended, focusing on quality S-REITs that can exhibit DPU growth and are backed by strong sponsors. Key points:

• Preference for S-REITs that are in strong financial positions, have healthy WALE terms and meaningful Singapore asset exposure.
• Top picks are CapitaLand Ascendas REIT (CLAR), CapitaLand Integrated Commercial Trust (CICT), Keppel DC REIT (KDCREIT) and Parkway Life REIT (PLIFE).
• The FTSE ST All-Share REITs Index (FSTREI) has registered year-to-date (YTD) total returns of 0.4%.
• For the recently concluded 1Q25 results/business updates, 10 of the S-REITs under our coverage reported distribution per unit (DPU) data.
• We have adjusted our DPU forecasts by -1.4% for both our FY1 (current financial year) and FY2 (next financial year) on average.
• Our preference of the major sub-sectors from most preferred to least preferred remains as (1) retail, (2) logistics and industrial (data centres are most preferred within this segment), (3) office and (4) hospitality. [[8], [9]]

Latest OIR Reports

A summary of the latest reports from OCBC Investment Research:

• 15 May 2025: ComfortDelGro Corporation (CD SP) – BUY, SGD 1.71
• 15 May 2025: Tencent Holdings (700 HK) – BUY, HKD 650.00
• 15 May 2025: Bumitama Agri Ltd (BAL SP) – BUY, SGD 0.975
• 15 May 2025: Singapore Post (SPOST) – HOLD, SGD 0.0605
• 15 May 2025: Singapore REITs – Quality bias amid a mixed outlook
• 14 May 2025: DBS Group Holdings Ltd (DBS SP) – BUY, SGD 50.00
• 14 May 2025: JD.com (9618 HK/JD US) – BUY, HKD 200.00/USD 52.00
• 14 May 2025: Thai Beverage (THBEV SP) – BUY, SGD 0.60
• 14 May 2025: Sea Limited (SE US) – BUY, USD 180.00
• 13 May 2025: Jiangxi Copper Co Ltd (358 HK/600362 CH) – BUY, HKD 19.30/CNY 26.00
• 13 May 2025: SIA Engineering Co Ltd (SIE SP) – BUY, SGD 2.64
• 13 May 2025: Boustead Singapore (BOCS SP) – BUY, SGD 1.39
• 8 May 2025: Alphabet Inc (GOOGL US/GOOG US) – BUY, USD 210.00
• 7 May 2025: Frasers Logistics & Commercial Trust (FLT SP) – BUY, SGD 1.07
• 6 May 2025: Schneider Electric (SU FP) – BUY, EUR 268.00
• 6 May 2025: First Solar Inc (FSLR US) – BUY, USD 192.00 [[9], [10]]

STI Stocks Sorted by Market Capitalisation (US\$m)

Here’s a table summarizing STI stocks by market capitalization:

Source: Bloomberg [[10], [11]]

This report offers valuable insights for investors navigating a complex market environment. With detailed analysis and specific stock recommendations, OCBC Investment Research provides a roadmap for informed decision-making.