Broker: UOB Kay Hian
Date of Report: 16 June 2025

Singapore Market Update: Key Insights, Top Movers, and Sector Outlooks for Investors

Market Overview: Global and Local Performance Snapshot

On Friday, US equity markets closed lower, with declines in the financials, information technology, and materials sectors. The Dow Jones Industrial Average dropped 1.79%, the S&P 500 slipped 1.13%, and the NASDAQ Composite fell 1.30%. Market breadth was negative on both the NYSE and Nasdaq, with falling stocks outnumbering gainers substantially.

Locally, the FSSTI index fell by 10.78 points to 3,911.42. Market activity was robust, with a total trading value of S\$1.25 billion and a broader market consisting of 160 gainers versus 359 losers. The FTSE ST Mid Cap index was down 0.8%, and the FTSE ST Small Cap Index fell 1.3%.

Key Indices Performance

Top Trading Turnover and Notable Movers

Top Gainers

• Jardine Matheson Holdings: S\$45.44 (+1.8%)
• Oue Real Estate Investment: S\$0.29 (+1.8%)
• Keppel: S\$7.22 (+1.5%)
• Emperador Inc: S\$0.34 (+1.5%)
• Sembcorp Industries: S\$6.89 (+1.3%)

Top Losers

• Riverstone Holdings: S\$0.69 (–4.2%)
• Top Glove Corp: S\$0.24 (–4.1%)
• Nio Inc-Class A: S\$3.58 (–3.5%)
• Stoneweg European Real Estate: S\$1.54 (–3.1%)
• Sri Trang Agro-Industry-For: S\$0.50 (–2.9%)

Sembcorp Industries (SCI SP): Technical and Fundamental Highlights

Technical Analysis & Trade Setup

• Trading Buy Range: S\$6.83–6.84
• Last Price: S\$6.89
• Target Price: S\$7.41
• Protective Stop: S\$6.60

Sembcorp Industries’ price is trading above the Ichimoku cloud, affirming a strong uptrend. The stock recently penetrated its prior price highs and the MACD indicator remains bullish, suggesting further upside potential. The recommended trade horizon is 1–2 weeks, and the trade should be initiated if the stock enters the buy range within three trading days.

On a fundamental basis, institutional research maintains a BUY call with a higher target price of S\$8.00.

Thai Beverage (THBEV SP): Impact of Vietnam’s Excise Tax Hike

Technical Analysis & Trade Setup

• Trading Sell Range: S\$0.465–0.470
• Last Price: S\$0.460
• Target Price: S\$0.410
• Protective Stop: S\$0.485

The technical outlook for Thai Beverage is bearish. The share price is trading beneath the cloud and is contained within a flag pattern, while the MACD remains in negative territory. This setup increases the likelihood of further downside, with a short-term target of S\$0.41. The trade should be entered if the stock moves into the sell range within three trading days. The institutional call remains HOLD with a fundamental target price of S\$0.51.

Company Update: Cheaper to Stay Sober – Vietnam Excise Tax Impact

Vietnam’s National Assembly has approved a steep increase in special consumption tax on beer and other alcoholic beverages, reaching 90% by 2031. The tax hike, which aims to reduce alcohol consumption and raise state revenues, will increase the tax rate on beer and strong liquor by 5 percentage points annually from 65% to 70% by 2027, and eventually to 90% by 2031. Spirits with less than 20% alcohol content will see their tax rise from 35% to 40% by 2027 and to 60% by 2031.

This regulatory move is a significant blow to an industry already under pressure from Vietnam’s strict drink-driving laws introduced in 2019 and shifting consumer preferences. The higher excise tax is likely to lower beer volumes in the medium to long term, especially for Thai Beverage’s subsidiary, Sabeco. THBEV is expected to pass on the tax increases to consumers, resulting in mid to high single-digit percentage price hikes for beer with each annual tax increment. While FY26 may see a short-lived boost from pre-tax-increase inventory stocking, volumes are expected to soften from FY27 onwards.

Sabeco contributes approximately 15% of THBEV’s annual revenue and 7% of its annual PATMI.

Key Financials: Thai Beverage (Year ending 30 Sep)

Segment Outlook: Spirits and Beer

• Spirits: Sales volumes are expected to improve modestly in 2HFY25, with low single-digit year-on-year growth amid an uncertain macro environment. Margins should stabilize in 3QFY25 as lower A&P spending offsets high raw material costs, with further improvement in 4QFY25 as new, lower-cost molasses feed into production. However, an unfavorable product mix due to downtrading from premium brown spirits to white spirits could pose downside risk.
• Beer: The outlook remains challenging due to macro uncertainty and weak sales volumes, particularly at Sabeco. This may be partially alleviated by domestic demand during the Songkran festival and increased tourist arrivals. Lower raw material costs and reduced A&P spending are expected to support margins in 2HFY25.

Earnings Revision and Valuation

• FY26-27 PATMI estimates have been adjusted by 0–1% due to revised beer sales volume assumptions.
• New PATMI estimates: FY25 – Bt26,870m (unchanged), FY26 – Bt28,644m (previously Bt28,520m), FY27 – Bt29,636m (previously Bt29,745m).
• Recommendation: HOLD, with a lower SOTP-based target price of S\$0.45 (previously S\$0.51), reflecting lower valuations for most business segments due to reduced peer EV/EBITDA multiples.
• THBEV is considered fairly valued at current levels, with the challenging outlook and muted earnings growth likely to restrain share price performance.

Potential Share Price Catalysts

• Market share gains in the beer segment
• Potential M&As or spinoff listings
• Stronger-than-expected growth in the spirits segment

Conclusion

Singapore’s equity market faces mixed sentiment amid global volatility and sector-specific challenges. Sembcorp Industries stands out with a bullish technical and fundamental outlook, while Thai Beverage confronts a tougher environment due to regulatory headwinds in Vietnam. Investors should remain vigilant, monitor sectoral developments, and adjust strategies accordingly as the market landscape evolves.