Lim & Tan Securities

04 June 2025

Singapore Market Insights: STI Trends, CapitaLand’s Expansion, and CosmoSteel’s Takeover Battle

FSSTI Index and Key Market Indicators [[1]]

The FSSTI Index closed at 3,894.4, marking a 0.1% increase for the day and remaining flat month-to-date, with a year-to-date growth of 2.8%. Other key indices include:

• INDU Index: 42,519.6 (0.5% 1D, 0.6% MTD, -0.1% YTD)
• SPX Index: 5,970.4 (0.6% 1D, 1.0% MTD, 1.5% YTD)
• CCMP Index: 19,399.0 (0.8% 1D, 1.5% MTD, 0.5% YTD)
• UKX Index: 8,787.0 (0.1% 1D, 0.2% MTD, 7.5% YTD)
• NKY Index: 37,446.8 (-0.1% 1D, -1.4% MTD, -6.1% YTD)
• HSI Index: 23,512.5 (1.5% 1D, 1.0% MTD, 17.2% YTD)
• SHCOMP Index: 3,362.0 (0.4% 1D, 0.4% MTD, 0.3% YTD)
• VIX Index: 17.7 (-3.6% 1D, -4.7% MTD, 2.0% YTD)

The daily market value stood at S\$1,312.9 million with a volume of 1,103.7 million shares. The 52-week high for the STI is 4,005.2, and the low is 3,198.4.

Interest Rates and Commodities [[1]]

Key interest rates include:

• 3 Mth SGD SORA: 2.3 (-0.2% 1D, -0.6% MTD, -26.3% YTD)
• SG 10 YR Bond Yield: 2.4 (-2.8% 1D, -3.2% MTD, -17.6% YTD)
• US 10 YR Bond Yield: 4.4 (-0.2% 1.0% MTD, -2.7% YTD)

Commodities performance:

• Gold: 3,356.4 (0.1% 1D, 2.0% MTD, 27.9% YTD)
• Crude Oil: 63.4 (1.4% 1D, 4.3% MTD, -11.6% YTD)
• Baltic Dry: 1,422.0 (0.3% 1D, 0.3% MTD, 42.6% YTD)
• Crude Palm Oil: 3,948.0 (0.4% 1D, 1.8% MTD, -3.4% YTD)

US Futures Market Overview [[1]]

The US markets experienced gains between 0.5% and 0.8%, with the tech sector leading the rally.

• Dow Jones: 42,614.0 (0.0% 1D, 0.8% MTD, -0.1% YTD)
• S&P 500: 5,983.3 (0.0% 1D, 1.1% MTD, -0.1% YTD)
• NASDAQ: 21,705.5 (0.0% 1D, 1.5% MTD, 1.2% YTD)

Idea of the Day: CapitaLand Investment Limited (CLI) [[1], [2]]

CapitaLand Investment Limited (CLI), trading at \$2.51 (up 1 cent), is expanding its European-born luxury brand, The Crest Collection, globally. This move is in response to rising demand from luxury travelers seeking distinctive, heritage-rich accommodations.

Key highlights include:

• Strong momentum in East Asia and the Middle East with over 1,200 units added from four new signings and one opening in the last six months.
• The portfolio now includes 16 properties with over 2,700 units across 11 countries and 13 cities.
• The Crest Collection enhances the Ascott Star Rewards (ASR) program, offering a broader range of luxury options.

Newest additions:

• SEN/KA TOKYO by The Crest Collection, set to open in the second half of 2029, marking the brand’s debut in Japan.
• Hong Yuan Hotel by The Crest Collection, which opened in Haikou, Hainan Province, at the end of last year.
• Property slated to open by mid-2026 in Wuhan’s Donghu New Technology Development Zone.
• Al Mahra Resort by The Crest Collection – the brand’s first resort and its debut in the United Arab Emirates – will open in early 2027.
• First property in Saudi Arabia, opening in Riyadh in 2028.

Southeast Asia expansion:

• La Clef Bangkok by The Crest Collection, set to open in mid-2025.
• The Grand Mansion Menteng by The Crest Collection in Indonesia (debuted in 2023).
• The George Penang by The Crest Collection in Malaysia.
• The Robertson House by The Crest Collection in Singapore.

Ms. Serena Lim, Chief Growth Officer, Ascott, noted the rising interest in luxury stays in Asia and the Middle East, driven by travelers seeking meaningful connections to the region’s culture and heritage. The Crest Collection aims to meet this demand with its ‘A Story Behind Every Door’ brand promise.

Financial outlook for CLI:

• Market cap: S\$12.5 billion
• Trades at 17.6x forward PE and 0.9x PB
• Dividend yield of 4.8%
• Consensus target price: S\$3.35 (33.5% upside) [In another line it is S\$3.34 representing a 31.5% upside]
• Rating: Accumulate

The luxury travel sector is projected to grow from US\$1.4 trillion in 2024 to US\$2.2 trillion by 2030.

Key Financial Metrics of FSSTI Constituents [[2]]

Companies with the highest consensus forward dividend yield (%):

• Frasers Logistics Trust: 7.64
• Mapletree Industrial Trust: 6.95
• Mapletree Logistics Trust: 6.88
• DBS Bank: 6.81
• Mapletree Pan Asia Comm Trust: 6.78

Companies with the lowest consensus forward P/E (X):

• Yangzijiang Shipbuilding: 6.65
• Jardine Cycle & Carriage: 7.02
• Jardine Matheson: 8.11
• UOB Bank: 9.93
• OCBC Bank: 10.02

Companies with the lowest trailing P/B (X):

• Hongkong Land: 0.39
• UOL Group: 0.43
• Jardine Matheson: 0.46
• City Developments: 0.49
• Mapletree Pan Asia Comm Trust: 0.66

Companies with the lowest trailing EV/EBITDA (X):

• Yangzijiang Shipbuilding: 3.32
• Genting Singapore: 4.95
• Jardine Cycle & Carriage: 5.84
• DFI Retail Group: 6.61
• Venture Corp: 7.56

CosmoSteel Holdings: Acquisition Concerns [[2]]

The chief executive of CosmoSteel Holdings (S\$0.225, unchanged) has voiced concerns over a takeover bid by 3HA Capital at 20 cents per share. Mr. Ong Tong Hai, along with his brother and father, who collectively hold a 26% stake, believes the offer undervalues the company.

Key points of contention:

• The offer is conditional on 3HA Capital securing over 50% of CosmoSteel’s issued shares.
• The Ongs argue the offer doesn’t reflect fair value and is potentially misleading.
• Concerns raised over CosmoSteel being on the SGX watch list since June 2018, which 3HA Capital cited as a reason for shareholders to exit.
• The proposed abolishment of the watch list by Singapore Exchange Regulation was not factored into the offer price.
• The offer price of 20 cents is a discount to the company’s net asset value per share of 29.3 cents as of March 31.
• The company has turned a profit in the first half of the 2025 financial year, compared to losses in the previous year.
• Mr. Ong Tong Hai has been purchasing shares in the open market since May 23 at between 21 cents and 22 cents per share, above 3HA Capital’s offer price.
• The consortium behind 3HA Capital includes direct competitors of CosmoSteel, such as Hanwa Singapore.

CosmoSteel’s financials:

• Market cap: S\$58.8 million
• Trades at 0.77x P/B
• No dividends due to previous losses
• Recent 1HFY25 results show a turnaround to a net profit of S\$2.3 million
• 3HA Capital’s offer price of 20 cents represents a 32% discount to its NAV of 29.3 cents/share

Recommendation: Shareholders are advised to “hold” for the IFA report and a potentially better offer, given the discounted price-to-book ratio and CEO’s buyback transactions.

Macro Market News Affecting US, Hong Kong, and China Markets [[3]]

US Market Analysis

• Jobless claims remain steady at 229k.
• May Philly Fed manufacturing survey shows improvement in employment components due to US-China trade truce.
• Spending is weakening, but not collapsing.
• BCA maintains a 6-12 month recession call due to policy uncertainty.
• Overweight government bonds and underweight risk assets recommended.
• Housing starts rose 1.6% m/m annualized, missing expectations, while building permits fell 4.7%.
• NAHB Housing Market Index dropped to 34 in May from 40.
• Housing sector under pressure from elevated mortgage rates and construction costs.

Consumer Sentiment and Inflation Expectations

• Preliminary May University of Michigan Consumer Sentiment Index fell to 50.8 from 52.2.
• Inflation expectations jumped, with one-year expectations rising to 7.3% and 5-to-10-year expectations hitting 4.6%.

China/HK Market Developments

• China and Japan are moving closer to resolving disputes over Tokyo’s handling of nuclear wastewater.
• China may lift the ban on Japanese seafood imports following talks with Japanese officials.
• Japan has reached an agreement on the technical requirements necessary to resume exports of fishery products to China.

Share Transactions [[4]]

Acquisitions

• Q&M Dental: Quan Min Holdings acquired 200,000 shares at S\$0.35, bringing the new balance to 505,859,589 shares (53.35%).
• BHG Retail: Beijing Hualian Retail Group acquired 400,000 shares at S\$0.44, totaling 197,602,323 shares (38.03%).
• Capital World Ltd: Winstead Chong acquired 15,000,000 shares at S\$0.002, totaling 2,264,099,787 shares (14.06%).
• Bonvest: Henry Ngo acquired 227,000 shares at S\$0.90, totaling 340,499,397 shares (84.8%).
• Propnex Ltd: Kelvin Fong acquired 31,000 shares at S\$1.00, totaling 75,960,000 shares (10.26%).
• Digital Core REIT: John Ryan Herbert acquired 250,000 shares at US\$0.495, totaling 250,000 shares (0.0019%).
• Wingtai Holdings Ltd: Cheung Wai Keung acquired 15,000 shares, totaling 471,879,859 shares (61.85%).

Disposals

• SGX: Blackrock Inc disposed of 519,900 shares at S\$14.02, totaling 53,341,545 shares (4.99%).
• GKE Corp Ltd: Qian Wenhua disposed of 1,313,000 shares at S\$0.081, totaling 53,564,500 shares (6.95%).

Share Buybacks [[4]]

Summary of share buybacks by various companies:

*5.66% of max mandate 85.3mln

Institutional and Retail Fund Flows [[5]]

Week of 26 May 2025:

• Institutional investors: Net buy (+S\$40.6m) vs. (-S\$121.3m) a week ago
• Retail investors: Net sell (-S\$143.2m) vs. (+S\$9.6m) a week ago

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

1. DBS (224.4)
2. SIA (50.2)
3. Sembcorp Industries (12.9)
4. Yangzijiang Shipbuilding (12.8)
5. Keppel (12.6)
6. SATS (9.6)
7. Thai Beverage (7.0)
8. CapitaLand Ascendas REIT (6.3)
9. ST Engineering (3.5)
10. Mapletree Logistics Trust (3.4)

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

1. Singtel (62.5)
2. OCBC (56.0)
3. Jardine Matheson (35.2)
4. SGX (29.2)
5. CapitaLand Investment (23.6)
6. ComfortDelGro (13.8)
7. Mapletree Industrial Trust (13.8)
8. Genting Singapore (13.3)
9. UOB (13.1)
10. CapitaLand Integrated Commercial Trust (12.9)

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

1. Genting Singapore (27.4)
2. Singtel (18.9)
3. ComfortDelGro (13.3)
4. Jardine Cycle & Carriage (7.8)
5. Seatrium (6.3)
6. Wilmar International (6.1)
7. Lendlease REIT (4.3)
8. CapitaLand Investment (4.2)
9. Netlink NBN Trust (4.1)
10. Riverstone (3.8)

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

1. DBS (47.6)
2. SIA (32.5)
3. UOB (23.7)
4. Yangzijiang Shipbuilding (22.2)
5. Keppel (21.9)
6. ST Engineering (20.8)
7. SATS (19.5)
8. SGX (18.8)
9. OCBC (9.6)
10. Frasers Hospitality Trust (4.9)

Institutional Investors Net Buy/Sell by Sector [[5]]

Retail Investors Net Buy/Sell by Sector [[6]]

STI Constituents Fund Flow [[6]]

Week of 26 May 2025:

Upcoming Dividends and Distributions [[7]]

List of upcoming dividends, special distributions, and other corporate actions:

June 2025 Calendar [[8]]

A calendar view of June 2025 is presented, but no specific events are highlighted.

SGX Watch-List [[9]]

List of companies under SGX Watch-List (as of the report date):

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

Latest Additions since 2H2023:

• Addvalue Technologies
• Renaissance United
• Telechoice
• Tiong Seng Hldgs
• Global Invacom Group
• Green Build Technology
• Keong Hong
• Camsing Healthcare