Lim & Tan Securities

02 June 2025

Singapore Market Insights: Ley Choon’s Promising Outlook, Gold’s Resilient Appeal, and Key Fund Flows (June 2025)

Financial Markets Overview

The FSSTI Index closed at 3,894.6, down 0.6%. Other key indices include:

• INDU Index: 42,270.1 (0.1%)
• SPX Index: 5,911.7 (0.0%)
• CCMP Index: 19,113.8 (-0.3%)
• UKX Index: 8,772.4 (0.6%)
• NKY Index: 37,965.1 (-1.2%)
• HSI Index: 23,289.8 (-1.2%)
• SHCOMP Index: 3,347.5 (-0.5%)
• VIX Index: 18.6 (-3.2%)

Singapore market summary:

• Daily Market Value: S\$3,283.9 million
• Daily Market Volume: 1,338.6 million
• 52-week STI High: 4,005.2
• 52-week STI Low: 3,198.4

Key Interest Rates

• 3 Mth SGD SORA: 2.3 (-0.1%)
• SG 10 YR Bond Yield: 2.4 (-0.4%)
• US 10 YR Bond Yield: 4.4 (-0.4%)

US Futures

• Dow Jones: 42,157.0 (-0.3%)
• S&P 500: 5,894.8 (-0.4%)
• NASDAQ: 21,284.5 (-0.4%)

Commodities

• Gold: 3,311.5 (0.7%)
• Crude Oil: 60.8 (-0.2%)
• Baltic Dry: 1,418.0 (4.8%)
• Crude Palm Oil: 3,878.0 (-1.4%)

Market Commentary

On Friday, US stock indices traded in a range of -0.3% to 0.1%.

Idea of the Day: Ley Choon (S\$0.067)

Ley Choon announced their 2HFY25 results, reporting a marginal decrease in revenue of approximately S\$0.2 million (0.4%) to S\$66.1 million compared to S\$66.3 million in 2HFY24. This decrease was mainly attributed to lower construction activities in certain pipe laying projects, offset by higher revenue from cable laying projects, airport works, and sales of construction materials.

Gross profit for 2HFY2025 increased to S\$13.9 million, with a gross profit margin of 21.0%, compared to S\$10.8 million and a margin of 16.3% in 2HFY2024. The improvement was primarily driven by stronger margins from certain projects. Reduced losses from legacy pipe-laying projects nearing completion also contributed.

Other income for 2HFY2025 decreased by approximately S\$0.6 million (34.3%) to S\$1.0 million compared to S\$1.6 million in 2HFY2024, mainly due to lower gain recognised from the disposal of plant and equipment and a decrease in income from scrap sales. Selling and distribution expenses for 2HFY2025 increased by approximately 21.7% to S\$0.1 million compared to 2HFY2024, mainly due to higher travelling expenses incurred during the period.

Ley Choon Outlook

The Building and Construction Authority (“BCA”) projects construction demand to remain strong, ranging between S\$47 billion and S\$53 billion in nominal terms in 2025. This demand is underpinned by projects such as Changi Airport Terminal 5 (T5), the expansion of the Marina Bay Sands Integrated Resort, public housing development, and infrastructure works.

The outlook for the construction industry, particularly in public sector and infrastructure-related projects, remains resilient. However, global economic uncertainties, geopolitical tensions, rising operating costs, and persistent inflationary pressures may present challenges. Despite these headwinds, the Group remains optimistic and committed to successful project execution and improving operational efficiency.

Looking ahead, the Group will continue to pursue opportunities in underground infrastructure and utilities construction through strategic bidding. The Group’s unfulfilled order book stands at approximately S\$342.5 million.

Ley Choon’s market cap stands at S\$100.8 million and currently trades at 7x FY25 PE and 1.4x PB, with a dividend yield of 4.5%. There are currently no analysts covering Ley Choon. The report views Ley Choon as an example of Singapore’s booming construction sector.

Other Highlights

Highest Consensus Forward Dividend Yield (%)

• FRASERS LOGISTICS TRUST 7.55
• MAPLETREE INDUSTRIAL TRUST 6.84
• MAPLETREE LOGISTICS TRUST 6.82
• DBS BANK 6.76
• MAPLETREE PAN ASIA COMM TRUST 6.69

Lowest Consensus Forward P/E (X)

• YANGZIJIANG SHIPBUILDING 6.39
• JARDINE CYCLE & CARRIAGE 7.18
• JARDINE MATHESON 8.12
• UOB BANK 9.95
• OCBC BANK 10.07

Lowest Trailing P/B (X)

• HONGKONG LAND 0.38
• UOL GROUP 0.42
• JARDINE MATHESON 0.46
• CITY DEVELOPMENTS 0.49
• MAPLETREE PAN ASIA COMM TRUST 0.66

Lowest Trailing EV/EBITDA (X)

• YANGZIJIANG SHIPBUILDING 3.09
• GENTING SINGAPORE 5.02
• JARDINE CYCLE & CARRIAGE 5.88
• DFI RETAIL GROUP 6.76
• VENTURE CORP 7.64

The Straits Times: Gold’s Resilient Appeal

Gold has retreated from recent record highs, but it still shines bright for investors and central banks rattled by uncertainty over US tariffs and other risks. Total bar and coin demand in Singapore shot up 35% over the same period in 2024, marking the strongest quarter on record, according to the World Gold Council (WGC).

Mr. Shaokai Fan, head of Asia-Pacific (ex-China) and global head of central banks at the WGC, noted that global demand reached its highest first-quarter level since the first quarter of 2016.

Jewellery sales volume in Singapore fell 20% in the first quarter of 2025 compared with a year earlier, while the value rose 9% year on year. Gold prices jolted from below US\$3,000 an ounce to almost US\$3,500 by late April following US President Donald Trump’s “Liberation Day” tariffs. Prices then hovered around US\$3,300 an ounce in May.

Ms. Lina Thomas, a commodities strategist at Goldman Sachs Research, predicts gold will rise to US\$3,700 an ounce by the end of 2025. She noted that investors have been increasing their holdings since March on concerns about the health of the US economy and market volatility.

Central banks, which own about 17% of all the gold ever mined, typically buy the metal for portfolio diversification, risk management, inflation hedging and protection against geopolitical and market volatility.

Emerging-market central banks have been boosting their gold holdings, and purchases on the London over-the-counter market have since increased fivefold.

WGC senior markets analyst Louise Street noted that investors have been piling into gold ETFs from the third quarter of 2024. She believes there could still be room for further growth, with global gold ETF holdings sitting 10% below their 2020 high.

The report views the resilient gold prices and demand as beneficial for CNMC Goldmine (S\$0.425, unchanged), a gold mining company with operations in Malaysia. CNMC’s market cap stands at S\$172mln and trades at 10.8x forward P/E and 2.7x P/B, with a dividend yield of 4.0%. CNMC has completed the expansion of its CIL plant in April, increasing processing capacity of gold-bearing ore by 60% to 800 tonnes per day. The report maintains a BUY rating on CNMC Goldmine.

Country Garden Restructuring Faces Resistance

Chinese developer Country Garden Holdings’ efforts to win backing for a US\$14.1 billion offshore restructuring are facing resistance as key bank creditors say failure to accept some of their demands would be a “deal breaker.”

The company got a few months’ reprieve from its liquidation petition hearing, as High Court Judge Linda Chan decided to adjourn the case to Aug 11. A key group of banks, known as the co-ordination committee, said that the company hasn’t yet agreed to its proposal on details of a US\$178 million deal on the return of seized collateral.

The co-ordination committee is crucial to Country Garden’s restructuring because it has the power to block any potential deal. The company needs support from three-quarters of debt holders in two individual groups – bank lenders and bondholders.

Unsettled issues on the compensation deal include details on credit enhancements, payment schedule and seniority. Country Garden has been in talks with creditors since it defaulted on its US dollar debt about 19 months ago.

Under the company’s scheme of arrangement, there are two classes of creditors, divided into banks and bondholders. “Class 1” comprises banks, including the co-ordination committee. “Class 2” includes existing US dollar bondholders, Hong Kong US dollar convertible bondholders and Ever Credit, which filed the wind-up petitioner against the company in February last year and holds a bilateral loan.

Country Garden plans to submit documents to the court in mid-August to hold a convening hearing, which would allow a creditor vote on its debt plan. It aims to complete the restructuring in December.

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

US Market

BCA Research wrote that their US Equity strategists are closing their tactical overweight in Utilities, as the trade is now crowded and priced for perfection.

While the long-term outlook remains attractive, near-term upside is limited given elevated expectations and stretched valuations. Risks around overinvestment, regulatory hurdles, and uncertain energy forecasts all introduce asymmetry. The sector is also a consensus long, increasing its vulnerability to profit-taking.

While the strategic case for Utilities remains compelling, supported by structural tailwinds, the tactical backdrop is less favorable.

China/HK Market

Chinese developer Country Garden Holdings’ efforts to win backing for a US\$14.1 billion offshore restructuring are running into resistance as key bank creditors say failure to accept some of their demands would be a “deal breaker.”

The company, once China’s largest property developer by contracted sales, got a few months’ reprieve from its liquidation petition hearing, as High Court Judge Linda Chan decided to adjourn the case to Aug 11.

Share Transactions (1 May’25 – 30 May’25)

Acquisitions

• Q&M Dental: Quan Min Holdings acquired 982,300 shares. New Balance Stake 53.33% [[4]]
• Ho Bee Land: Chua Thian Poh acquired 18,000 shares. New Balance Stake 75.65% [[4]]
• Uni-Asia: Masahiro acquired 454,300 shares. New Balance Stake 1.4% [[4]]
• Bonvest: Henry Ngo acquired 227,000 shares. New Balance Stake 84.8% [[4]]
• UMS: Andy Luong acquired 100,000 shares. New Balance Stake 15.38% [[4]]

Disposals

• Digital Core REIT: Daiwa Securities Group Inc disposed of 220,000 shares. New Balance Stake 4.99% [[4]]
• CH Offshore: Tan Pong Tyea disposed of 194,380,175 shares. New Balance Stake 0% [[4]]

Share Buyback

*5.66% of max mandate 85.3mln [[4]]

Fund Flow Data (Week of 19 May 2025)

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

• SIA: 32.4
• ST Engineering: 22.8
• Hongkong Land: 10.0
• Seatrium: 9.5
• SGX: 8.1
• SIA Engineering: 6.4
• CapitaLand Integrated Commercial Trust: 5.3
• Keppel: 5.2
• Keppel DC REIT: 4.1
• Wilmar International: 4.1

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

• DBS: (31.9)
• Singtel: (31.0)
• Yangzijiang Shipbuilding: (28.6)
• UOB: (28.6)
• OCBC: (21.7)
• Mapletree Industrial Trust: (13.2)
• SATS: (9.1)
• CapitaLand Ascendas REIT: (8.1)
• Riverstone: (7.0)
• Jardine Matheson: (6.8)

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

• Yangzijiang Shipbuilding: 37.8
• OCBC: 21.0
• SATS: 15.3
• Mapletree Industrial Trust: 10.6
• Thai Beverage: 9.5
• CapitaLand Investment: 8.7
• Frasers Logistics & Commercial Trust: 8.5
• Mapletree Pan Asia Commercial Trust: 7.8
• Riverstone: 7.4
• Genting Singapore: 7.1

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

• SIA: (90.1)
• DBS: (24.9)
• Singtel: (21.0)
• ST Engineering: (16.3)
• Keppel: (13.9)
• Seatrium: (9.6)
• SIA Engineering: (7.6)
• Hongkong Land: (4.1)
• iFast Corporation: (3.7)
• Geo Energy Resources: (3.1)

Institutional investors net sell (-S\$121.3m) vs. (-S\$47.9m) a week ago [[5]]

Retail investors net buy (+S\$9.6m) vs. (+S\$56.3m) a week ago [[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

Dividends / Special Distributions / Others

SGX Watch-List

32 Companies Under SGX Watch-List (including latest additions) [[9]]

• Amos Group (06-Jun-23)
• Ascent Bridge Ltd (04-Dec-19)
• ASTI Holdings (06-Jun-19)
• British And Malayan Hldgs (06-Jun-23)
• CH Offshore (06-Jun-23)
• Cosmosteel (05-Jun-18)
• Datapulse Technology (06-Jun-23)
• Debao Property (04-Dec-19)
• Eneco Energy (04-Dec-19)
• Full Apex (Holdings) (05-Jun-17)
• GRP Limited (06-Jun-23)
• Interra Resources (05-Dec-17)
• Intraco Ltd (06-Jun-23)
• IPC Corp (06-Jun-23)
• Jadason Enterprises (06-Jun-23)
• Jasper Investments (Salt Investments) (06-Jun-23)
• Manufacturing Integration Technology (06-Jun-23)
• Metis Energy (05-Dec-18)
• Raffles Infrastructure (06-Jun-19)
• Shanghai Turbo (06-Jun-23)
• SMI Vantage (04-Dec-19)
• Trek 2000 Intl (06-Jun-23)
• United Food Hldgs (06-Jun-19)
• USP Group Limited (04-Dec-19)

Latest Additions since 2H2023

• Addvalue Technologies (05-Dec-23)
• Renaissance United (05-Dec-23)
• Telechoice (05-Dec-23)
• Tiong Seng Hldgs (05-Dec-23)
• Global Invacom Group (05-Jun-24)
• Green Build Technology (05-Jun-24)
• Keong Hong (05-Jun-24)
• Camsing Healthcare (03-Dec-24)