Broker: UOB Kay Hian
Date of Report: Thursday, 15 May 2025

Singapore Market Outlook: In-Depth Review of Q1 2025 Results and Strategic Forecasts for Leading Stocks

Key Market Highlights and Indices Performance

The Singapore market opened the quarter with a mix of resilience and volatility, reflecting global macro headwinds and sector-specific developments. While the Straits Times Index (FSSTI) posted a slight year-to-date gain of 2.2%, Asian and US indices showed varied performance, with the S&P 500 up 0.2% YTD and the Hang Seng Index surging 17.9%. Top trading turnover was seen in blue-chip names such as DBS, UOB, Singtel, and OCBC, while Hotel Properties, UOB-Kay Hian Holdings, and Frasers Hospitality Trust led gainers.

Key Economic Assumptions

• US GDP growth forecast: 1.8% (2025F)
• Singapore GDP growth: 2.5% (2025F)
• Brent Crude (2025F): US\$70/bbl
• CPO (2025F): RM4,500/mt

AEM Holdings (AEM SP): Revenue Steady, Earnings Remain Under Pressure

AEM Holdings, a global leader in semiconductor and electronics test solutions, reported Q1 2025 earnings of S\$3 million (+43% YoY, -71% QoQ) and revenue of S\$86 million (-9% YoY, -35% QoQ), constituting 22% of full-year estimates. Despite revenue meeting expectations, net margin remained subdued at 3.9%, attributed to a lack of operating leverage and upfront costs for new products prior to mass production.

• Segment Performance: Both Test Cell Solutions (TCS) and Contract Manufacturing (CM) segments saw weaker YoY revenues. TCS revenue declined 47% QoQ, primarily due to order pull-ins in late 2024. CM revenue (S\$32m, 38% of total) decreased 3% QoQ, but was buffered by a diversified customer base.
• Guidance: H1 2025 revenue forecast is unchanged at S\$155-170 million. The company maintains confidence in long-term prospects, especially in thermal technology, a key enabler for AI/HPC testing and advanced chip packaging.
• Valuation: Current valuation appears rich at 18x 2025 PE, with the stock trading above historical mean due to the earnings trough cycle.
• Key Financials (S\$M):
  

  2023	2024	2025F	2026F	2027F
  Net turnover	481	380	391	424	465
  Net profit (adj.)	(1)	12	23	25	27
  EPS (S\$ cent)	(0.4)	3.8	7.4	8.1	8.8
  PE (x)	n.a.	34.1	17.5	16.0	14.6
  Dividend yield (%)	0.0	0.0	1.4	1.6	1.7

• Share Price Catalyst: Potential upside from positive revenue surprises or new customer wins.

ComfortDelGro Corporation (CD SP): Mixed Q1, Poised for Sequential Growth

ComfortDelGro, the world’s second-largest listed land transport group, posted a 16.4% YoY revenue increase in Q1 2025 to S\$1.17 billion, in line with expectations. However, core PATMI rose 18.8% YoY to S\$47.3 million, missing estimates due to higher amortisation costs following a new Purchase Price Allocation (PPA) accounting adjustment.

• Public Transport: Robust growth (+2.6% YoY revenue, +52.9% YoY profit), driven by higher domestic fares, better UK contract margins, and new contracts in Manchester. Segmental operating margins expanded 1.6ppt YoY to 4.8%.
• Taxi & Private Hire: Revenue surged 74% thanks to Addison Lee and A2B acquisitions, but competition from ride-hailing intensifies. Excluding acquisitions and China, domestic taxi operating profit grew ~16.1% YoY.
• Guidance: Full-year contributions from acquisitions expected to sustain momentum, with UK bus margins set to gradually rise as more contracts are renewed.
• Key Financials (S\$M):
  

  2023	2024	2025F	2026F	2027F
  Net turnover	3,880	4,477	5,024	5,208	5,359
  Net profit (adj.)	174	205	228	256	277
  EPS (S\$ cent)	8.0	9.5	10.5	11.8	12.8
  PE (x)	18.4	15.6	14.1	12.5	11.6
  Dividend yield (%)	4.5	5.3	5.8	6.4	6.9

• Risks: Higher amortisation costs, continued ride-hailing competition, and subdued China taxi segment.
• Share Price Catalyst: Overseas acquisitions, higher taxi commissions.

Genting Singapore (GENS SP): Tourism Headwinds Prompt Earnings Downgrade, Value Remains

Genting Singapore, a specialist in regional leisure and integrated resorts, saw a soft start to 2025 as 1Q revenue dipped 20% YoY to S\$626.2 million, and core adjusted EBITDA fell 36% YoY to S\$235.8 million. The decline was largely due to an exceptionally strong Q1 2024 base, buoyed by Taylor Swift’s Eras Tour, and slower foreign tourism spend.

• Gaming Segment: Q1 2025 gaming revenue up 5% QoQ but down 20% YoY. VIP rolling chip volume rose 26% QoQ but was down 19% YoY; win percentage dropped to 3.39% from 4.62% a year earlier.
• Non-Gaming: Revenue fell 10% YoY, 4% QoQ, due to softer hotel patronage and fewer available rooms following renovations.
• Tourism Trends: 1Q25 tourist arrivals recovered to 92% of pre-pandemic levels, though average spending faces risk from global economic uncertainty and trade policies.
• Competitive Landscape: Marina Bay Sands (MBS) continues to outperform, benefitting from a more strategic location and recent hotel upgrades.
• Development Pipeline: New attractions (e.g., Minion Land, Singapore Oceanarium, super luxury all-suite hotel) are expected to drive vibrancy and visitation from 3Q25 onwards.
• Key Financials (S\$M):
  

  2023	2024	2025F	2026F	2027F
  Net turnover	2,418	2,530	2,494	2,631	2,763
  Net profit (adj.)	634	594	577	640	660
  EPS (S\$ cent)	5.3	4.9	4.8	5.3	5.5
  PE (x)	14.7	14.9	15.4	13.9	13.4
  Dividend yield (%)	5.2	5.4	5.4	6.1	6.1

• Balance Sheet: Net cash position (S\$3.58b), offering flexibility for higher payouts or new ventures (e.g., Thailand IR bid).
• Risks: Weakening consumer sentiment, intensified competition, and macroeconomic headwinds.

United Hampshire US REIT (UHU SP): Strip Centres Offer Defensive Yield and Resilience

United Hampshire US REIT, focused on grocery-anchored and necessity-based retail in the US, delivered solid Q1 2025 results with distributable income of US\$6.3 million (-1.6% YoY), matching expectations. Portfolio occupancy held firm at 97.2% with a long WALE of 7.8 years.

• Operational Highlights:
  • Positive rental reversion at mid-single digits
  • Six new/renewal leases signed in Q1, totalling 46,487 sf
  • Minimal lease expiries: 1.8% in 2025, 3.4% in 2026
• Financials & Capital Management:
  • Aggregate leverage down to 39.2% post-divestments
  • No major loan maturities until Nov 2026; 74% of borrowings hedged to fixed rates
  • Weighted average interest rate: 5.21%
• Macro & Structural Trends:
  • Strip centres are increasingly attracting institutional investors, supported by geolocation data and rising foot traffic
  • Physical stores serve as fulfilment hubs for omnichannel retailing
  • Blackstone’s US\$4b acquisition of Retail Opportunity Investments underscores sector appeal
• Key Financials (US\$M):
  

  2023	2024	2025F	2026F	2027F
  Net turnover	72	73	74	75	77
  DPU (US\$ cent)	4.8	4.1	4.4	4.9	5.0
  DPU Yield (%)	10.8	9.1	10.0	10.9	11.2
  P/B (x)	0.6	0.6	0.6	0.6	0.6

• Share Price Catalyst: Resilience of essential retail spending, yield-accretive acquisitions.

Venture Corporation (VMS SP): Earnings Miss, Geopolitical Tariffs Cloud Visibility

Venture Corporation, a global leader in technology solutions, posted Q1 2025 earnings of S\$56 million (-7% YoY), representing only 22% of full-year estimates. Revenue dropped 8% YoY to S\$616.6 million, mainly due to reduced demand in the Lifestyle Consumer technology segment, where improved product reliability led to fewer replacements.

• Segment Trends: Excluding Lifestyle Consumer tech, revenues would have risen. Networking & Communications and Advanced Industrials showed YoY progress. Net margin improved slightly to 9.1%.
• Strategic Focus: VMS aims to leverage demand for hyperscale data centres and advanced semiconductors, driven by AI adoption.
• Balance Sheet: Net cash of S\$1.3b (30% of market cap). Consistent dividend payout and S\$17.4m in share buybacks YTD 2025.
• Uncertainties: Ongoing tariffs create visibility challenges for the next 12 months, impacting customer demand and delaying recovery.
• Key Financials (S\$M):
  

  2023	2024	2025F	2026F	2027F
  Net turnover	3,025	2,736	2,544	2,621	2,699
  Net profit (adj.)	270	245	227	234	242
  EPS (S\$ cent)	92.8	84.8	78.5	81.1	83.7
  PE (x)	12.1	13.3	14.4	13.9	13.5
  Dividend yield (%)	6.7	6.7	6.7	6.7	6.7

• Peers Comparison: VMS trades at a discount to global tech peers, with a lower PE and higher yield.
• Share Price Catalyst: Market share expansion in core domains, new innovative solutions, improved tariff outlook.

Technical Trading Ideas: AEM Holdings and Singapore Exchange

• AEM Holdings: Trading Buy (S\$1.25-1.26 entry, S\$1.59 target, S\$1.18 stop). Technicals show a breakout from a flag pattern, rising RSI, and positive momentum. However, fundamental rating remains SELL with a S\$1.09 target.
• Singapore Exchange (SGX): Trading Sell (S\$14.00-14.03 entry, S\$12.43 target, S\$14.70 stop). Possible double-top formation, breaking below neckline and middle Bollinger band. Institutional research holds a HOLD view with a S\$12.58 target.

Conclusion: Navigating Opportunities Amid Uncertainty

Singapore’s leading stocks are navigating a complex landscape of global trade tensions, sectoral shifts, and evolving consumer trends. Defensive plays like United Hampshire US REIT offer high yields and stability, while ComfortDelGro and Genting Singapore present selective growth opportunities. Meanwhile, AEM Holdings and Venture Corporation face challenges from weak margins and tariff uncertainties, requiring cautious positioning. Investors are advised to balance yield, valuation, and sectoral resilience as Q2 unfolds.