Broker: Lim & Tan Securities
Date of Report: 27 May 2025

Singapore Market Analysis: Top Dividend Plays, Fund Flows, and Strategic Insights for May 2025

Market Overview: Indices, Key Rates, and Commodities Snapshot

Singapore’s FSSTI Index closed at 3,875.6, reflecting a slight dip of 0.2% on the day but marking gains of 1.1% month-to-date (MTD) and 2.3% year-to-date (YTD). Global markets presented mixed performances:

• Dow Jones: 41,603.1 (-0.6% 1D, 2.3% MTD, -2.2% YTD)
• S&P 500: 5,802.8 (-0.7% 1D, 4.2% MTD, -1.3% YTD)
• NASDAQ: 18,737.2 (-1.0% 1D, 7.4% MTD, -3.0% YTD)
• FTSE 100: 8,718.0 (-0.2% 1D, 2.6% MTD, 6.7% YTD)
• Nikkei 225: 37,531.5 (+1.0% 1D, 4.1% MTD, -5.9% YTD)
• Hang Seng: 23,282.3 (-1.4% 1D, 5.3% MTD, 16.1% YTD)

Commodities also saw significant movements:

• Gold: \$3,347.7 (+0.1% 1D, 1.8% MTD, 27.6% YTD)
• Crude Oil: \$62.2 (+0.5% 1D, 6.8% MTD, -13.3% YTD)
• Baltic Dry Index: 1,340.0 (-0.1% 1D, -3.3% MTD, 34.4% YTD)
• Crude Palm Oil: 3,819.0 (-0.4% 1D, -2.2% MTD, -6.5% YTD)

Interest rates remain steady, with the 3-month SGD SORA at 2.3% and Singapore’s 10-year bond yield at 2.5%. US 10-year bond yield stands at 4.5%.

Spotlight: Bukit Sembawang Estates – Value Play Amid Cooling Measures

Bukit Sembawang Estates (BSE) closed at \$3.92, down \$0.01. The company’s revenue fell by 24% to \$225.9 million, while cost of sales decreased by 34% to \$166.5 million compared to the previous half-year. The decline in revenue was primarily due to the absence of contributions from The Atelier, which obtained TOP in May 2024 with revenue fully recognized in the first half.

Notable highlights:

• Property development revenue dropped 25% to \$219.0 million.
• Gross profit increased by 32% to \$59.4 million, driven by higher profits on development projects like Pollen Collection, LIV@MB, and Fraser Residence Orchard.
• Other income rose slightly due to higher late interest from purchasers.
• Other operating income fell by \$3.1 million due to a lower reversal of impairment losses related to Fraser Residence Orchard.

Cash flow remains robust:

• Net cash inflow for FY2024/25: \$130.2 million.
• Net cash from operating activities: \$173.8 million, buoyed by project sales collections.
• Net cash used in financing: \$43.4 million, mainly dividend payments.
• Cash and cash equivalents as of 31 March 2025: \$582.4 million (up from \$452.2 million).

Despite ongoing cooling measures and a cautious economic outlook, BSE remains focused on the sales of 8@BT and Pollen Collection, the upcoming launch of Nim Collection Phase 4, and planning for Luxus Hills Phase 10. The Group’s prudent approach to new launches is intended to align with market and buyer sentiment.

Valuation and Dividends:

• Market cap: \$1 billion
• Historical P/E: 9x
• Price/book: 0.6x
• Final dividend: 4 cents/share; Special dividend: 16 cents/share (up from 12 cents), total payout: 20 cents/share, 5.1% yield
• Net cash of \$582 million represents 58% of market cap

BSE is seen as undervalued, with accumulation recommended on price weakness.

Boustead Singapore: Strong Profit Growth and Dividend Upside

Boustead Singapore (Boustead) ended at \$1.04, down 1 cent. The firm reported a 48% year-on-year increase in net profit to S\$95.0 million for FY2025, bolstered by lower tax expenses and a one-off S\$29 million non-cash gain from transferring Boustead Projects’ fund management business to UIB in exchange for shares.

After adjusting for exceptional items, net profit would have been 8% higher year-on-year. Revenue, however, declined 31% to S\$527.1 million due to lower contributions from Real Estate Solutions and Energy Engineering Divisions.

Key divisional highlights:

• Geospatial Division: Record revenue of S\$221.4 million (+4% YoY), growth across all major markets.
• Real Estate Solutions Division: Revenue plunged 64% to S\$134.3 million due to a lower order backlog and challenging business conditions. However, two major design-and-build contracts were secured at year-end, replenishing backlog.
• Energy Engineering Division: Revenue fell 9% to S\$158.9 million, reflecting a lower starting backlog and moderate market activity despite resilient demand for energy infrastructure.
• Healthcare Division: Revenue rose 14% to S\$12.1 million, aided by a one-off turnkey contract.

Other key financials:

• Net asset value per share: 118.3 cents (up from 105.8 cents)
• Net liquid position: S\$198.6 million (40.4 cents/share)

Despite a tough macro environment, Boustead secured S\$377 million in new engineering contracts, more than doubling the previous year. The order backlog stands at S\$349 million, split between Energy Engineering (S\$126 million) and Real Estate Solutions (S\$223 million).

The transfer of Boustead Projects’ fund management business to UIB gives Boustead a 20% stake in a pan-Asian logistics and industrial platform managing US\$3.5 billion (~S\$4.7 billion) in assets, offering long-term value.

Valuations and Dividends:

• Market cap: S\$511 million
• Forward P/E: 9.5x
• Price/book: 0.8x
• Dividend yield: 6.8% (including 4 cents final and 2 cents special dividend, with scrip option)

Attractive valuations, a strong net cash position, and special dividends make Boustead an “Accumulate” recommendation.

Market Leaders: Dividend Yields and Valuation Metrics

Top stocks by forward dividend yield and lowest valuation metrics:

Macro Market Trends: US, China, and Hong Kong

In the US, the Federal Reserve remains focused on inflation risks from tariffs unless labor market data deteriorates. The current macro environment differs from the 2021–22 spike, with input costs up but demand-side pressures muted. BCA Research recommends a defensive bond stance.

In China, news centers on Bian Ximing, a reclusive billionaire who made a US\$1.5 billion profit betting on Chinese gold futures and now holds the largest net long position in copper contracts on the Shanghai Futures Exchange, reflecting bullish sentiment on copper amid US-China trade tensions. Bian’s investments emphasize a trend-focused, cost-conscious strategy, resonating with followers for its Warren Buffett-like philosophy.

Insider Transactions and Share Buybacks: Key Highlights

Share buybacks were active, with notable purchases by HK Land, APAC Realty, Olam, SGX, UOB, DBS, and others.

Institutional and Retail Fund Flows: Sector and Stock Movements

For the week of 19 May 2025:

• Institutional investors net sold S\$121.3m, higher than the previous week’s S\$47.9m net outflows.
• Retail investors net bought S\$9.6m, a slowdown from S\$56.3m net buying a week ago.

Top retail net buy stocks included Yangzijiang Shipbuilding (S\$37.8m), OCBC (S\$21.0m), and SATS (S\$15.3m), while SIA was the largest retail net sell (-S\$90.1m).

Sector-Wise Fund Flows: Institutional and Retail

Institutional investors were net sellers in Financial Services (-S\$80.0m), REITs (-S\$30.6m), and Technology (-S\$0.5m) but net buyers in Industrials (S\$24.2m) and Real Estate (S\$17.0m).

Retail investors showed strong net buying in Financial Services (S\$19.9m), REITs (S\$42.3m), and Technology (S\$2.4m), but were net sellers in Industrials (-S\$70.4m) and Telcos (-S\$13.8m).

Dividend Announcements: Key Payouts and Ex-Dates

SGX Watch-List: Latest Updates and Additions

There are 32 companies currently under the SGX Watch-List, including recent additions such as Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare. Regular monitoring of these companies is recommended due to their ongoing challenges.

Upcoming Corporate Events: May and June 2025

The calendar for May and June 2025 is packed with key earnings, ex-dividend dates, and other corporate actions, affecting major names such as UOB, DBS, OCBC, SIA Engineering, Singtel, SATS, and more.

Conclusion: Navigating a Challenging but Opportunity-Filled Landscape

Despite cautious market sentiment, rising costs, and regulatory headwinds, select Singapore-listed companies continue to deliver compelling dividend yields, solid fundamentals, and unique value propositions. Investors are urged to stay alert for value opportunities in undervalued counters like Bukit Sembawang Estates and Boustead Singapore, while keeping an eye on fund flows and sector trends for tactical positioning.