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

Singapore Market Outlook: Key Earnings, Stock Picks & Sector Insights for May 2025

UOB Kay Hian’s latest market research brings a thorough analysis of Singapore’s top-listed companies, including AEM Holdings, ComfortDelGro Corporation, Genting Singapore, United Hampshire US REIT, and Venture Corporation. This in-depth review covers Q1 2025 results, sector headwinds, and trading ideas, offering actionable insights for investors and market watchers.

Market Snapshot: Indices and Top Movers

• FSSTI: 3,871.1 (-0.3% daily, +2.2% YTD)
• S&P 500: 5892.6 (+0.1% daily, +0.2% YTD)
• HSI: 23,640.7 (+2.3% daily, +17.9% YTD)
• Key Gainers: Hotel Properties (+5.0%), UOB-Kay Hian Holdings (+4.8%), Frasers Hospitality Trust (+4.6%), Yangzijiang Financial (+4.1%), Tianjin Pharmaceutical (+3.2%)
• Key Losers: Thai Beverage (-3.0%), Digital Core REIT (-2.8%), Sheng Siong Group (-2.7%), Stoneweg European Real Estate (-2.6%), iFast Corp (-2.4%)
• Highest Trading Turnover: DBS Group Holdings (S\$44.25, S\$218.8m 5-day ADT), UOB (S\$35.27, S\$140.6m), Singtel (S\$3.75, S\$125.2m)

AEM Holdings (AEM SP): 1Q25 Results Show Muted Outlook Despite Revenue Alignment

Rating: SELL (Maintained) Share Price: S\$1.29 Target Price: S\$1.09 Upside: -15.5%

Company Overview: AEM is a global leader in semiconductor and electronics test solutions, with products spanning handlers, testers, consumables, and analytics.

Key Shareholders: Temasek Holdings (12.5%), EPF (11.2%)

Q1 2025 Financial Highlights:

• Revenue: S\$86.0m (-9% YoY, -35% QoQ), meeting 22% of full-year estimate
• Net Profit: S\$3.3m (+43% YoY, -71% QoQ)
• Net Margin: 3.9% (remains weak due to lack of operating leverage and high upfront costs for new products)

Segment Performance:

• Test Cell Solutions (TCS): Revenue doubled from new customers (vs 4Q24), but overall segment fell 47% QoQ due to inventory pull-in from a major customer.
• Contract Manufacturing (CM): Revenue S\$32m (38% of total), down 3% QoQ; diversified customer base helped cushion order volatility.

Strategic/Operational Updates:

• AMPS-BI system achieved customer acceptance and entered volume production, powered by proprietary PiXL™ thermal technology.
• Expanded System-Level Test customer base, including a leading AI customer and memory customer installations.
• Long-term growth confidence, especially in AI/HPC device testing, but near-term earnings (2Q25, 2H25) expected to remain muted amid tariff risks and weak margins.

Valuation and Risks:

• Valuation rich at 18x 2025 PE (target price based on 15x PE, 1SD above historical mean).
• Upside catalysts: Positive revenue surprises, new customer wins.

ComfortDelGro Corporation (CD SP): Mixed Q1 2025 Results, But Sequential Growth Expected

Rating: BUY (Maintained) Share Price: S\$1.52 Target Price: S\$1.71 Upside: +12.8%

Company Overview: ComfortDelGro is the world’s second-largest listed passenger land transport company (c.43,000 vehicles), spanning bus, taxi, rail, car rental, and maintenance services.

Q1 2025 Financial Highlights:

• Revenue: S\$1,169.7m (+16.4% YoY)
• Core Operating Profit: S\$80.5m (+45.8% YoY, -10.6% QoQ)
• Core PATMI: S\$47.3m (+18.8% YoY, -17.2% QoQ)
• Operating Margin: 6.9% (+1.4ppt YoY)
• PATMI Margin: 4.0% (flat YoY)

Segment Analysis:

• Public Transport: Revenue +2.6% YoY, Core Operating Profit +52.9% YoY. Supported by higher fares, improved UK margins, new Manchester contract; loss of Jurong West bus package offset some growth.
• Taxi & Private Hire: Revenue +74.0% YoY, Operating Profit +36.9% YoY (acquisitions: Addison Lee, A2B). Domestic profit +16.1% YoY (excluding acquisitions/China); competition remains stiff, especially from GrabCab.
• Other Segments: Growth in inspection, testing services, and private transport, though small in contribution.

Key Developments and Outlook:

• Higher UK bus contract margins expected to continue, with more renewals anticipated from 2Q25 onwards.
• Domestic rail ridership and fares to boost revenue, while Australia’s bus driver shortage is easing.
• Headwinds in the taxi segment from ride-hailing competitors; China taxi rentals subdued.

Valuation and Risks:

• 2025-2027 core PATMI forecasts trimmed by ~3% due to higher amortisation from purchase price allocations.
• Target price adjusted to S\$1.71, pegged at 16x 2025F PE.
• Dividend yield of 5.8% remains attractive; company seen as a defensive pick for 2H25.
• Potential catalysts: Overseas acquisitions, higher taxi commission rates.

Genting Singapore (GENS SP): Q1 2025 Soft on Tourism Slowdown, Attractive Dividend Yield Remains

Rating: BUY (Maintained) Share Price: S\$0.735 Target Price: S\$0.90 Upside: +22.4%

Company Overview: Genting Singapore is a leading developer/operator of integrated resorts in the region.

Q1 2025 Financial Highlights:

• Revenue: S\$626.2m (+2.3% QoQ, -20.2% YoY)
• EBITDA: S\$235.8m (+4.6% QoQ, -36.2% YoY)
• Core Net Profit: S\$150.3m (+4.5% QoQ, -39.7% YoY)
• Adjusted EBITDA Margin: 37.7% (+0.8ppt QoQ, -9.5ppt YoY)

Segment & Operational Updates:

• Gaming: Revenue up 5% QoQ (higher VIP rolling chip volume, festive season), but down 20% YoY (lower VIP volume, win rate, fewer available rooms).
• Non-Gaming: Revenue down 10% YoY, 4% QoQ due to fewer hotel rooms (closure for renovations), lower occupancy (72%), but higher average room rate (S\$512).

Sector & Strategic Insights:

• Singapore tourist arrivals in Q1 2025 reached 92% of pre-pandemic levels (4.31m visitors, +2% YoY), but March saw normalization after a strong base in Q1 2024 (boosted by Taylor Swift concerts).
• Headwinds: Global trade uncertainties, weaker consumer sentiment, intensifying competition from Marina Bay Sands (MBS), which now offers renovated rooms and stronger city-center positioning.
• Opportunities: Major events (Lady Gaga, Anime Festival Asia, F1) expected to support tourism. RWS 1.5/2.0 expansion includes Minion Land (opened Feb 2025), Singapore Oceanarium (opening July 2025), super luxury all-suite hotel (3Q25), and a 21,243 sqm waterfront development (2027).
• Leadership transition: New CEO appointed; no material impact expected.
• Large cash pile (S\$3.58b, 29.6 S cents/share as of 4Q24) offers flexibility for capex, acquisitions, or potential higher dividends.

Valuation and Outlook:

• Earnings forecasts for 2025-2026 cut by 12-17% due to softer consumer spending and competition.
• Target price reduced to S\$0.90 (from S\$1.12), using 8x 2025F EV/EBITDA (-1SD below mean).
• Dividend yield of 5.4% remains attractive with strong net cash backing.

United Hampshire US REIT (UHU SP): Defensive US Strip Centers Deliver High Yield

Rating: BUY (Maintained) Share Price: US\$0.445 Target Price: US\$0.64 Upside: +43.8%

Company Overview: UHU focuses on income-producing, necessity-based retail and self-storage real estate in the US, primarily grocery-anchored strip centers.

Q1 2025 Financial Highlights:

• Gross Revenue: US\$18.1m (-2.0% YoY)
• Net Property Income (NPI): US\$11.7m (-8.4% YoY)
• Distributable Income: US\$6.3m (-1.4% YoY)
• Portfolio Occupancy: 97.2%
• Rental Reversion: Positive at mid-single digit, six new/renewed leases signed (46,487sf)

Portfolio and Strategic Updates:

• WALE: 7.8 years (as of Mar 2025), minimal lease expiries in 2025-26 (1.8% and 3.4% of base rental).
• Major tenants include BJ’s Wholesale Club (fulfilling 90% of online orders via stores), ShopRite, Home Depot, Walmart.
• Recent divestments (Lowe’s and Sam’s Club at Hudson Valley Plaza, Albany Supermarket) reduced leverage to 39.2% (down 3ppt YoY); no debt maturities until Nov 2026.
• Weighted average interest rate: 5.21% (74% debt hedged); benefits from lower floating rates (SOFR).
• Triple net leases shelter UHU from inflation; tenants have limited early termination rights.

Industry Trends & Institutional Interest:

• Strip centers are gaining institutional traction, supported by geolocation data, rising foot traffic, and improved lending.
• Blackstone’s US\$4b acquisition of Retail Opportunity Investments in Feb 2025 highlights sector attractiveness.

Valuation and Outlook:

• Trades at an attractive 2025 DPU yield of 10.0%, with a 5.5% yield spread over US 10-year treasuries.
• P/NAV at 0.59x.
• Target price maintained at US\$0.64, based on a dividend discount model (CoE 9%, terminal growth 1.5%).
• Key catalysts: Resilience in essential retail, yield-accretive acquisitions.

Venture Corporation (VMS SP): Q1 2025 Earnings Miss, Tariff Uncertainty Clouds Outlook

Rating: HOLD (Maintained) Share Price: S\$11.27 Target Price: S\$12.01 Upside: +6.6%

Company Overview: Venture is a global electronics services giant, delivering high-mix, high-value, and complex products across diversified technology domains.

Q1 2025 Financial Highlights:

• Revenue: S\$616.6m (-7.5% YoY)
• Net Profit: S\$55.9m (-7.0% YoY)
• Net Margin: 9.1% (+0.1ppt YoY)

Key Observations:

• Revenue weakness pinned on lower demand in Lifestyle Consumer technology; R&D innovation improved product reliability, reducing replacement cycles.
• Revenue would have risen YoY without this segment’s softness; other domains (Networking & Communications, Advanced Industrials) showed progress.
• Consensus among customers: Global tariff situation has created significant uncertainty with little visibility for the next 12 months.
• VMS is focusing on growth in hyperscale data centre and semiconductor solutions (AI-driven demand), and has executed S\$17.4m share buybacks YTD 2025.
• Strong balance sheet: Net cash S\$1.3b (30% of market cap), consistent dividends, no debt.

Valuation and Risks:

• 2025/26/27 earnings cut by 9%/11%/14% due to lower revenue assumptions.
• Target price reduced to S\$12.01 (15.3x 2025F PE, long-term mean).
• Dividend yield remains robust at 6.7%.
• Catalysts: Recovery in demand, easing of tariff uncertainty, further cost efficiencies.

Traders’ Corner: Key Technical Calls

• AEM Holdings (AEM SP): Trading Buy (range S\$1.25-1.26, target S\$1.59, stop S\$1.18). Technicals show breakout from flag pattern, rising RSI, and potential momentum upside. Note: Fundamental call is SELL (target S\$1.09).
• Singapore Exchange (SGX SP): Trading Sell (range S\$14.00-14.03, target S\$12.43, stop S\$14.70). Possible double-top pattern and falling RSI signal downside risk. Institutional research rating: HOLD (target S\$12.58).

Summary: Sector Headwinds, Valuations, and Opportunities

Singapore’s corporate earnings season for Q1 2025 reveals sector-specific headwinds—tariffs impacting tech, cost pressures in transport, tourism normalization, and resilient yields in US retail REITs. Despite cautious sentiment and certain earnings misses, value can be found in select stocks with strong balance sheets, defensive business models, or unique expansion catalysts. Dividend yields remain an important focus for income-seeking investors.

Key Assumptions for 2024-2026