Lim & Tan Securities

29 May 2025

Singapore Market Insights: Seatrium Upgrade, Valuetronics’ Strong FY2025, and Fund Flow Analysis

Financial Markets Overview

The FSSTI Index closed at 3,911.9, up 0.4%, with MTD and YTD gains of 2.1% and 3.3% respectively. Key global indices showed mixed performance:

• INDU Index: 42,098.7 (-0.6% 1D, 3.5% MTD, -1.0% YTD) [[1]]
• SPX Index: 5,888.6 (-0.6% 1D, 5.7% MTD, 0.1% YTD) [[1]]
• CCMP Index: 19,100.9 (-0.5% 1D, 9.5% MTD, -1.1% YTD) [[1]]
• UKX Index: 8,726.0 (-0.6% 1D, 2.7% MTD, 6.8% YTD) [[1]]
• NKY Index: 37,722.4 (0.0% 1D, 4.7% MTD, -5.4% YTD) [[1]]
• HSI Index: 23,258.3 (-0.5% 1D, 5.1% MTD, 15.9% YTD) [[1]]
• SHCOMP Index: 3,339.9 (0.0% 1D, 1.9% MTD, -0.4% YTD) [[1]]

The VIX Index stood at 19.3, up 1.8% on the day, with significant MTD decline of -21.8% but YTD increase of 11.3%. Daily market value was S\$1,214.0 million with a volume of 1,232.6 million shares. The 52-week STI high was 4,005.2 and low was 3,198.4. [[1]]

Key Interest Rates

• 3 Mth SGD SORA: 2.3 (-0.2% 1D, -4.0% MTD, -25.7% YTD) [[1]]
• SG 10 YR Bond Yield: 2.4 (0.4% 1D, -2.3% MTD, -15.3% YTD) [[1]]
• US 10 YR Bond Yield: 4.5 (0.6% 1D, 8.2% MTD, -1.4% YTD) [[1]]

US Futures

As of 8:00 am SG time, US futures showed positive momentum:

• Dow Jones: 42,612.0 (1.0% 1D, 4.5% MTD, -0.5% YTD) [[1]]
• S&P 500: 5,986.3 (1.4% 1D, 7.1% MTD, -0.1% YTD) [[1]]
• NASDAQ: 21,747.5 (1.7% 1D, 10.6% MTD, 1.3% YTD) [[1]]

Commodities

• Gold: 3,262.3 (-0.8% 1D, -0.8% MTD, 24.3% YTD) [[1]]
• Crude Oil: 61.8 (1.6% 1D, 6.2% MTD, -13.8% YTD) [[1]]
• Baltic Dry: 1,296.0 (-3.3% 1D, -6.5% MTD, 30.0% YTD) [[1]]
• Crude Palm Oil: 3,882.0 (-0.4% 1D, -0.6% MTD, -5.0% YTD) [[1]]

Market Sentiment

Profit-taking led to a 0.5-0.6% fall in US stocks overnight following last week’s gains. [[1]]

Idea of the Day: Seatrium (S51) – Accumulate on Weakness

Seatrium (S\$2.06, up 1 cent) reported its 1Q25 operational performance, highlighting its focus on operational excellence and cost optimization amidst an uncertain operating environment. Seatrium is positioned as a leading solutions provider in the offshore and marine industry, securing repeat orders and expanding into new markets. [[1]] [[2]]

• Order Book: As of 31 March 2025, Seatrium’s net order book stood at S\$21.3 billion, comprising 26 projects with deliveries extending to 2031. Projects related to renewables and green/cleaner solutions amounted to S\$7.1 billion. [[2]]
• FPSO Projects: Seatrium delivered One Guyana, its fourth FPSO project for Guyanese waters. Topsides fabrication and integration are underway for FPSO Errea Wittu and FPSO Jaguar. Commissioning of FPSO P-78 for Petrobras is progressing well, with departure to Brazil expected later this year. Integration work has commenced for FPSO P-80. [[2]]
• Oil and Gas: The Group anticipates a stable order pipeline for oil and gas projects due to increased focus on energy security and demand. [[2]]
• MOU with bp: Seatrium signed an MOU with bp for a second FPU, Tiber, in the Gulf of America, building on the Kaskida FPU partnership. [[3]]
• LeTourneau Super 116E Class jack-up rig: A contract was secured for the supply of equipment and license for this rig. [[3]]
• Offshore Wind Projects: Completed strike steel for IJmuiden Ver Gamma, the second of three 2GW offshore converter platforms for TenneT. Offshore commissioning is underway for Revolution Wind offshore substations, with completion expected by June. Despite US market uncertainties, opportunities are seen in Europe and Asia Pacific. [[3]]
• Heavy Lift Vessel for Penta-Ocean Construction (POC): Seatrium was awarded an EPC contract for a 5,000-ton Heavy Lift Vessel, marking its entry into the Japanese offshore wind market. [[3]]
• FPSO BW Opal Delivery: Successful delivery of FPSO BW Opal to BW Offshore, designed with a gas handling capacity of 850 million standard cubic feet per day (MMscfd) and 11,000 barrels per day of stabilised condensate, to be deployed at the Santos operated Barossa Field in northern Australia. Designed with cutting-edge energy-efficient technologies, the FPSO will reduce greenhouse gas emissions by 15%, translating to a reduction of up to 2.3 million tonnes of CO2 emissions over the life of the asset. [[4]] [[5]]
• Valuation: Seatrium’s market cap stands at S\$7.0 billion, trading at 18.6x forward PE and 1.1x PB, with a dividend yield of 0.7%. Consensus target price is S\$2.72, representing 32% upside. [[5]]

Given the potential for increased deliveries and the recovery of the oil & gas sector, Seatrium can leverage its fixed cost structure. After declining 17.2% since the last SELL call, coupled with improving fundamentals and a 32% consensus upside, Lim & Tan Securities upgrades Seatrium to an ACCUMULATE ON WEAKNESS rating. [[5]]

FSSTI Stock Selection

Highest Consensus Forward Dividend Yield (%)

1. Frasers Logistics Trust: 7.59 [[2]]
2. Mapletree Industrial Trust: 6.84 [[2]]
3. Mapletree Logistics Trust: 6.82 [[2]]
4. DBS Bank: 6.75 [[2]]
5. Mapletree Pan Asia Comm Trust: 6.75 [[2]]

Lowest Consensus Forward P/E (X)

1. Yangzijiang Shipbuilding: 6.25 [[2]]
2. Jardine Cycle & Carriage: 7.28 [[2]]
3. Jardine Matheson: 8.06 [[2]]
4. UOB Bank: 10.10 [[2]]
5. OCBC Bank: 10.13 [[2]]

Lowest Trailing P/B (X)

1. Hongkong Land: 0.39 [[2]]
2. UOL Group: 0.42 [[2]]
3. Jardine Matheson: 0.46 [[2]]
4. City Developments: 0.49 [[2]]
5. Mapletree Pan Asia Comm Trust: 0.66 [[2]]

Lowest Trailing EV/EBITDA (X)

1. Yangzijiang Shipbuilding: 2.96 [[2]]
2. Genting Singapore: 5.14 [[2]]
3. Jardine Cycle & Carriage: 5.92 [[2]]
4. DFI Retail Group: 6.60 [[2]]
5. Venture Corp: 7.53 [[2]]

Company Update: Valuetronics Holdings Limited (BN2) – Accumulate on Weakness

Valuetronics Holdings Limited (S\$0.695, down 1/2 cent) reported a 4.3% yoy increase in net profit to HK\$166.5 million for FY2025, with revenue growth of 3.5% to HK\$1,729.1 million. Earnings per share increased to 41.6 Hong Kong cents from 38.7 Hong Kong cents in FY2024. [[2]]

• CE Segment: Saw encouraging revenue contributions from a new entertainment-focused customer supplying electronic products to a leading global entertainment conglomerate. However, overall revenue in the CE segment was dragged down by the continued decline in demand for traditional consumer lifestyle products, coming in 12.2% lower yoy at HK\$367.0 million. [[2]] [[3]]
• ICE Segment: Benefited from strong revenue contributions from a Canadian-based network access solutions provider, achieving an 8.8% yoy increase in revenue to HK\$1,362.1 million, offsetting the softer performance of the CE segment. [[3]]
• Gross Profit: Rose 10.8% yoy to HK\$293.7 million, leading to a 1.1% basis point increase in gross profit margin to 17.0% in FY2025, compared to 15.9% in FY2024, driven by a shift in sales mix to higher margin products. [[3]]
• Other Income: Fell 10.1% yoy to HK\$58.0 million, mainly due to the fair value loss from financial assets and the decrease in interest income in tandem with the lowering of interest rates by the US Fed. [[3]]
• Financial Position: Remained strong with a healthy balance sheet and no bank borrowings. As of 31 March 2025, it had cash and cash equivalents of HK\$1,093.8 million (as of 31 March 2024: HK\$1,164.5 million). Net asset value improved to HK\$3.6 per share from HK\$3.4 per share. [[3]]
• Dividend: The Board recommended a final dividend of 11.0 Hong Kong cents per share and a special dividend of 8.0 Hong Kong cents per share to share the interest income earned during the year. Together with the interim dividend and special dividend of total 8.0 Hong Kong cents that was paid in December 2024, it brings total dividend for FY2024 to 27.0 Hong Kong cents per share, representing a dividend payout ratio of 65% of net profit in respect of FY2025. [[3]] [[4]]
• Outlook: The company is closely monitoring the trade environment and expects ongoing volatility from the evolving tariff situation. The integrated manufacturing platform in Vietnam, together with core competencies developed in the Group’s China operations, will collectively equip the Group to navigate an increasingly complex operating environment. The Group expects to remain profitable for FY2026. [[4]]
• Segmental Outlook: Optimistic about the potential growth of the entertainment focused CE customer and the ICE segment’s Canadian customer. [[4]]
• Share Buyback Program: A HK\$250 million Share Buyback Program was announced on 28 February 2022. Since then, HK\$107.1 million has been utilized to repurchase an aggregate of 34.1 million company shares. The Group intends to continue with the Share Buyback Program in FY2026. [[5]]
• Valuation: At its last traded price of 69.5 cents, Valuetronics is capitalized at \$282 million and trades at 10x PE, 1x book and 6.3% dividend yield. Bloomberg consensus 1 year target price is 78 cents, representing 11-12% upside. Given the attractive dividend yield and continued share buy-back program, Lim & Tan Securities maintains an “Accumulate on Weakness” rating on Valuetronics. [[5]]

Macro Market News Affecting US, Hong Kong, and China Markets

US Market

BCA Research indicates that Q1 earnings point to risks for goods-focused sectors, reinforcing the call to overweight services, upstream names, and domestic plays. Sectors like Consumer Discretionary, Industrials, and Materials face the greatest pressure due to exposure to China and US tariffs. Expectations for Q2 have been revised lower in energy, materials, industrials, and consumer discretionary. The 12-month forward EPS growth forecast stands at 10%, with downside risk if tariffs persist. [[3]]

• Investment Strategy: Overweight services over goods, upstream players over downstream importers, and domestic-focused companies over peers exposed to global supply chains. [[3]]
• Commodities: Saudi Arabia is pursuing a controlled price war to regain market share and reset relations with the US. Investors should sell oil into strength, with Brent’s floor likely targeted around \$50/bbl. [[3]]

China/HK Market

The Chinese regulator has published draft guidelines for fees that online platforms charge third-party merchants, affecting companies including JD.com, Meituan, and PDD Holdings. [[3]]

• Regulatory Focus: Companies operating online platforms should charge reasonable fees, considering the operational status of merchants. The deadline for feedback on the draft guidance is Jun 3. [[3]] [[4]]
• Platform Strategies: Platforms should set flexible pricing strategies for charges including commission, membership, and service fees to reduce merchants’ burdens, and offer better support to smaller businesses. [[4]]

The regulator and the Ministry of Commerce told PDD Holdings executives that its policy which allows shoppers to claim refunds without returning purchased goods placed an unfair burden on small merchants. Chinese merchants also face further pressure from the US’ cancellation of a loophole that exempted smaller packages shipped to America from tariffs. [[4]]

Share Transactions (1 May’25 – 28 May’25)

Acquisitions

• Sinostar PEC Intelligent: People’s Holdings Ltd acquired 200,000 shares at S\$0.15, new balance 667,669,296, stake 69.54%. Li Xiang Ping acquired 200,000 shares at S\$0.144, new balance 667,469,296, stake 69.52%. [[4]]
• Ho Bee Land: Chua Thian Poh acquired 20,600 shares at S\$1.77, new balance 502,332,450, stake 75.65%. [[4]]
• Cosmosteel: Jack Ong acquired 446,200 shares at S\$0.22, new balance 44,388,296, stake 16.98%. [[4]]
• UMS: Andy Luong acquired 100,000 shares at S\$1.15, new balance 109,263,086, stake 15.38%. [[4]]
• Venture Corp: Chua Kee Lock acquired 30,000 shares at S\$11.08, new balance 30,000, stake 0.01%. [[4]]
• Wingtai Holdings Ltd: Cheung Wai Keung acquired 80,000 shares. [[4]]

Disposals

• Eneco Energy Ltd: Unionsteel Holdings Ltd disposed of 640,000,000 shares at S\$0.0115, new balance 640,000,000, stake 27.67%. [[4]]
• CH Offshore: Tan Pong Tyea disposed of 194,380,175 shares at S\$0.012, new balance 0. [[4]]

Share Buyback

• HK Land: 470,000 shares at US\$5.24, cumulative purchases 9,609,800. [[4]]
• APAC Realty: 258,700 shares at S\$0.435, cumulative purchases 2,036,500, 5.7% of mandate. [[4]]
• Global Investment Limited: 300,000 shares at S\$0.125, cumulative purchases 5,400,000, 3.3% of mandate. [[4]]
• Olam: 500,000 shares at S\$0.89, cumulative purchases 7,957,100, 4.1% of mandate. [[4]]
• SGX: 105,000 shares at S\$13.96, cumulative purchases 1,567,400, 1.5% of mandate. [[4]]
• UOB: 300,000 shares at S\$35.88, cumulative purchases 3,634,100, 4.4% of mandate. [[4]]
• Zheneng Jinjiang Holding Co Ltd: 150,000 shares at S\$0.45, cumulative purchases 15,345,200, 10.5% of mandate. [[4]]
• Aspial Corp Ltd: 390,400 shares at S\$0.062, cumulative purchases 838,000, 0.9% of mandate. [[4]]
• 17 Live: 37,900 shares at S\$0.91, cumulative purchases 525,600, 2.9% of mandate. [[4]]
• Q&M Dental: 242,400 shares at S\$0.35, cumulative purchases 683,400, 0.7% of mandate. [[4]]
• Venture Corp: 55,000 shares at S\$10.97, cumulative purchases 55,000, 0.4% of mandate. [[4]]
• OUE Ltd: 30,100 shares at S\$0.965, cumulative purchases 166,500, 0.2% of mandate. [[4]]
• DBS: 400,000 shares at S\$44.07, cumulative purchases 4,830,000, 5.66% of max mandate 85.3mln. [[4]]
• MTQ: 90,000 shares at S\$0.27, cumulative purchases 2,583,600, 11.5% of mandate. [[4]]

Fund Flow Data

Week of 19 May 2025: Institutional investors net sell (-S\$121.3m) vs. (-S\$47.9m) a week ago, while retail investors net buy (+S\$9.6m) vs. (+S\$56.3m) a week ago. [[5]]

Top 10 Institution Net Buy (+) Stocks (S\$M)

1. SIA: 32.4 [[5]]
2. ST Engineering: 22.8 [[5]]
3. Hongkong Land: 10.0 [[5]]
4. Seatrium: 9.5 [[5]]
5. SGX: 8.1 [[5]]
6. SIA Engineering: 6.4 [[5]]
7. CapitaLand Integrated Commercial Trust: 5.3 [[5]]
8. Keppel: 5.2 [[5]]
9. Keppel DC REIT: 4.1 [[5]]
10. Wilmar International: 4.1 [[5]]

Top 10 Institution Net Sell (-) Stocks (S\$M)

1. DBS: (31.9) [[5]]
2. Singtel: (31.0) [[5]]
3. Yangzijiang Shipbuilding: (28.6) [[5]]
4. UOB: (28.6) [[5]]
5. OCBC: (21.7) [[5]]
6. Mapletree Industrial Trust: (13.2) [[5]]
7. SATS: (9.1) [[5]]
8. CapitaLand Ascendas REIT: (8.1) [[5]]
9. Riverstone: (7.0) [[5]]
10. Jardine Matheson: (6.8) [[5]]

Top 10 Retail Net Buy (+) Stocks (S\$M)

1. Yangzijiang Shipbuilding: 37.8 [[5]]
2. OCBC: 21.0 [[5]]
3. SATS: 15.3 [[5]]
4. Mapletree Industrial Trust: 10.6 [[5]]
5. Thai Beverage: 9.5 [[5]]
6. CapitaLand Investment: 8.7 [[5]]
7. Frasers Logistics & Commercial Trust: 8.5 [[5]]
8. Mapletree Pan Asia Commercial Trust: 7.8 [[5]]
9. Riverstone: 7.4 [[5]]
10. Genting Singapore: 7.1 [[5]]

Top 10 Retail Net Sell (-) Stocks (S\$M)

1. SIA: (90.1) [[5]]
2. DBS: (24.9) [[5]]
3. Singtel: (21.0) [[5]]
4. ST Engineering: (16.3) [[5]]
5. Keppel: (13.9) [[5]]
6. Seatrium: (9.6) [[5]]
7. SIA Engineering: (7.6) [[5]]
8. Hongkong Land: (4.1) [[5]]
9. iFast Corporation: (3.7) [[5]]
10. Geo Energy Resources: (3.1) [[5]]

Institutional Investors Net Buy/Sell (S\$M) by Sector

Retail Investors Net Buy/Sell (S\$M) by Sector

STI Constituents – Week of 19 May

The following table summarizes institutional and retail net buy/sell activity for STI constituents:

Stock	Code	Institution Net Buy (+) / Net Sell (-) (S\$M)	Retail Net Buy (+) / Net Sell (-) (S\$M)
CapitaLand Ascendas REIT	A17U	(8.1)	6.0
CapitaLand Integrated Commercial Trust	C38U	5.3	0.1
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