Broker Name: CGS International
Date of Report: June 18, 2025
Banyan Tree Holdings and SingTel: Technical Breakout and Yield Prospects Amid Shifting Retail Backdrop
Market Overview: US Retail Weakness and Tariff Headwinds
The latest retail data from the US highlights a cautious consumer environment. Retail sales declined by 0.9% in May, the steepest drop since the beginning of the year, marking the first consecutive monthly declines since late 2023. Key categories such as autos, building materials, gasoline, and motor vehicles saw significant pullbacks, attributed to earlier front-loaded purchases ahead of tariff implementations. Spending at restaurants and bars registered its largest fall since early 2023, suggesting broader consumer belt-tightening amid inflation concerns and high interest rates. Industrial production also slipped in May, weighed down by softer manufacturing and utilities output, while homebuilder confidence dropped to its lowest since the end of 2022.
Banyan Tree Holdings Ltd (SGX: B58): Strong Technical Buy Signal
Last Price: S\$0.44 Entry Prices: S\$0.44, S\$0.40, S\$0.38 Supports: S\$0.38 (Support 1), S\$0.32 (Support 2) Resistance Levels: S\$0.47 (Resistance 1), S\$0.84 (Resistance 2) Stop Loss: S\$0.33 Target Prices: S\$0.56 (TP1), S\$0.67 (TP2), S\$0.80 (TP3), S\$0.90 (TP4)
Company Overview: Banyan Tree Holdings Limited operates as a global hospitality group. Its portfolio includes hotels, resorts, spas, galleries, golf courses, and residences. The company also provides investment, design, construction, and project management services, serving a worldwide clientele.
Technical Analysis Snapshot
- Breakout Above Falling Wedge: Banyan Tree has decisively broken above its larger falling wedge pattern, signaling a possible end to the corrective phase and the start of a new bullish trend.
- Ichimoku Indicators: The chart shows three bullish golden crosses, reinforcing strong upward momentum.
- MACD Histogram: A crossover at the bottom with the histogram moving toward the zero line, now positive—indicative of rising momentum.
- Stochastic Oscillator: Demonstrates a strong upward move, confirming the bullish setup.
- 23-period Rate of Change (ROC): Has rebounded and remains in positive territory, supporting the trend reversal.
- Directional Movement Index: Confirms robust bullish strength in price action.
- Volume: Healthy expansion in trading volume, lending further credibility to the technical breakout.
With a compelling technical profile, multiple indicators align to suggest that Banyan Tree is poised for a strong upward move. The series of target prices from S\$0.56 up to S\$0.90 present an attractive risk-reward for traders and investors seeking momentum opportunities in the hospitality sector.
SingTel (SGX: Z74): Yield Attractiveness Offset by Rich Valuations
Rating: Hold Target Price (RNAV-derived): S\$4.10
Key Investment Highlights
- Asset Recycling Upside: SingTel has set a higher asset recycling target of S\$9 billion over the next 3-4 years, which opens the door for potential dividend increases.
- Attractive Dividend Yields: Estimated dividend yields for FY26-28F are projected to exceed 5%, providing an appealing income stream for shareholders.
- Valuation Concerns: SingTel’s forecasted CY26F P/E ratio stands at 21.6x, more than one standard deviation above its post-2009 mean. This elevated multiple caps further upside potential unless there is significant unlocking of asset value.
While SingTel’s yield profile is attractive and the company is pursuing aggressive capital recycling, the current valuation appears stretched. Investors looking for capital appreciation may find better opportunities elsewhere unless SingTel can deliver substantial asset value realization.
Recommendation Framework and Ratings Distribution
CGS International uses the following definitions for stock and sector ratings:
| Stock Rating |
Definition |
| Add |
Total return expected to exceed 10% over the next 12 months |
| Hold |
Total return expected to be between 0% and positive 10% over the next 12 months |
| Reduce |
Total return expected to fall below 0% or more over the next 12 months |
| Sector/Country Rating |
Definition |
| Overweight |
Positive recommendation (above-market weight) |
| Neutral |
Neutral recommendation (market weight) |
| Underweight |
Negative recommendation (below-market weight) |
Distribution for quarter ended 31 March 2025 (551 companies under coverage):
- Add: 71.0% (Investment banking clients: 1.3%)
- Hold: 20.9% (Investment banking clients: 0.7%)
- Reduce: 8.2% (Investment banking clients: 0.4%)
Conclusion: Tactical Opportunities and Cautious Positioning
The current market landscape, shaped by cautious consumer sentiment and macro headwinds, puts a premium on selectivity. Banyan Tree Holdings stands out as a technical buy with strong breakout signals and healthy trading volume, offering significant upside for momentum traders and investors in the hospitality sector. In contrast, SingTel, despite its high dividend yield prospects and aggressive asset recycling, faces valuation headwinds that may limit further price gains barring substantial asset value unlocking.
Investors are advised to closely monitor sector trends, technical indicators, and valuation multiples before making allocation decisions in the current environment.
