Lim & Tan Securities
30 June 2025

Singapore Market Insights: In-Depth Analysis of Major Stocks and Sector Trends for 2H 2025

Market Overview: STI and Global Indices Stay Resilient Amid Changing Dynamics

The FSSTI Index closed at 3,966.2, up 0.7% for the day, with a Month-To-Date (MTD) gain of 1.8% and a Year-To-Date (YTD) increase of 4.7%. Major global indices also delivered positive performances, with the Dow Jones up 1.0%, S&P 500 rising 0.5%, and Nasdaq Composite climbing 0.5%. The Hang Seng Index, however, dipped 0.2% after a strong earlier rally. Commodities saw mixed movements, with gold steady at S\$3,268.0 and crude oil rising 0.4% to S\$65.5 per barrel.

Stamford Tyres Corp (STC): Resilient Revenue, Margin Pressures, and a Challenging Outlook

Stamford Tyres Corp (STC) closed at S\$0.215, down half a cent. For FY ended April 2025, revenue rose 1.6% to S\$187.7 million from S\$184.8 million, driven by stronger sales in North Asia and Southeast Asia. Despite the revenue growth, gross profit dropped by S\$2.9 million to S\$45.8 million, with gross margins narrowing from 26.3% to 24.4% due to higher tyre costs.

• Operating expenses (excluding last year’s one-off property gain) rose 3.8% to S\$51.0 million, mainly from higher other operating expenses, depreciation, and leases, partially offset by lower staff and marketing costs.
• Share of joint venture profits remained steady at S\$0.9 million, up from S\$0.8 million.
• Net profit fell sharply to S\$0.9 million from S\$6.0 million.

The balance sheet saw notable increases:

• Property, plant, and equipment: S\$47.0 million (up from S\$45.9m), mainly due to property acquisitions in Indonesia.
• Receivables: S\$33.7 million (up from S\$30.4m).
• Inventories: S\$81.2 million (up from S\$68.5m).
• Trade payables and trust receipts: S\$56.4 million (up from S\$45.5m).
• Cash and cash equivalents: S\$27.7 million (down from S\$32.5m).
• Total borrowings: S\$71.8 million (up from S\$60.4m), mainly to fund inventory.
• Net debt: S\$44 million. Net gearing: 40%.

Dividend was cut from 1.5 cents to 1 cent, with a payout ratio of 240% and a yield of 4.65%. The company trades at a low 0.45x price-to-book, but a high 51x historical PE due to depressed earnings. Revalued NAV is estimated between 70-80 cents per share; reported NAV is 46.6 cents/share. Recommendation: Hold, given undervaluation on asset basis but ongoing earnings weakness.

Koh Brothers Group (KBG): Construction Giant Poised for Turnaround and Growth

Koh Brothers Group (KBG) (S\$0.187, up 0.1 cent) is set to benefit from Singapore’s major infrastructure push. The group’s latest S\$999 million contract with Changi Airport for underground tunnels at Terminal 5 brings its order book above S\$1 billion, ensuring visibility through 2029.

After pandemic-induced losses, KBG returned to profitability with a S\$1.7 million net profit for H2 2024, compared to a S\$5.9 million loss previously, even as revenue slipped 21% to S\$125.5 million. The turnaround was attributed to:

• Reduced construction losses
• Improved associate profits (Oiltek International)
• Profitable real estate segment

Key growth drivers ahead include participation in Changi Terminal 5 and Marina Bay Sands expansion, with continued focus on government projects (public housing, MRT, wastewater treatment). The Building and Construction Authority projects S\$53 billion in construction contracts this year, with annual demand of S\$39-46 billion through 2029.

• Market cap: S\$81.9 million
• Trades at 0.3x price-to-book
• Currently loss-making and pays no dividends

Outlook: Even weaker players like KBG are expected to achieve profitability this year, signaling better industry conditions, margins, and demand. The group’s history includes landmark projects such as Marina Barrage, Punggol Waterway, and Downtown Line 1 Bugis Station.

Sector Highlights: Consensus Yields, Valuations, and Outlook

Highest Consensus Forward Dividend Yields (%):

• Frasers Logistics Trust: 7.10
• DBS Bank: 6.80
• Mapletree Industrial Trust: 6.50
• Mapletree Logistics Trust: 6.41
• Mapletree Pan Asia Comm Trust: 6.39

Lowest Consensus Forward P/E (X):

• Yangzijiang Shipbuilding: 6.73
• Jardine Matheson: 8.73
• Wilmar: 10.09
• UOB Bank: 10.12
• OCBC Bank: 10.13

Lowest Trailing Price-to-Book (P/B):

• Hongkong Land: 0.43
• UOL Group: 0.45
• Jardine Matheson: 0.50
• City Developments: 0.52
• Mapletree Pan Asia Comm Trust: 0.71

Lowest Trailing EV/EBITDA (X):

• Yangzijiang Shipbuilding: 3.40
• Genting Singapore: 5.34
• Jardine Cycle & Carriage: 6.72
• DFI Retail Group: 8.00
• SATS Ltd: 8.09

Macro Market News: Global Themes Impacting Singapore and Asia

Taiwan has joined the US-led effort to restrict China’s technological ascent, blacklisting Huawei and SMIC. This signals a shift in Taiwan’s approach, moving towards tighter controls on semiconductor exports and a more assertive stance in technological competition. The implications could reshape the regional chip supply chain.

In the US, labor market signals are flashing caution. While hard data remains somewhat resilient, job openings are in decline and initial jobless claims have been climbing. The current investment consensus is underweight equities, overweight fixed income, and neutral on cash. Any further labor market weakening could trigger a shift to a more defensive portfolio stance.

Major Shareholder Activity: Acquisitions, Disposals, and Buybacks (1-27 June 2025)

*Bought from 2 Jan-17 June’25

Major disposals included UOBKH (Tang Wee Loke, 254,600 shares at S\$1.96) and Capland Group’s sale of 70 million shares in CICT (S\$2.13).

Share Buybacks:

• HK Land: 440,000 shares at US\$5.64
• APAC Realty: 131,600 shares at S\$0.47
• Olam: 250,000 shares at S\$0.94
• UOB: 200,000 shares at S\$36.00
• OCBC: 300,000 shares at S\$16.11
• DBS: 350,000 shares at S\$43.71
• ST Engineering: 500,000 shares at S\$7.83

Institutional and Retail Fund Flows: Sector and Stock Trends

For the week of 16 June 2025:

• Institutional investors were net sellers at -S\$269.0 million (vs. -S\$130.5m prior week).
• Retail investors were net buyers at +S\$160.1 million (vs. +S\$132.5m prior week).

Retail investors favored DBS (+S\$106.7m), SIA (+S\$49.3m), OCBC (+S\$37.4m), and Wilmar International (+S\$30.7m), while selling Keppel (-S\$48.3m), Yangzijiang Shipbuilding (-S\$11.3m), and CapitaLand Integrated Commercial Trust (-S\$10.5m).

Sector Fund Flows: Institutional and Retail Activity by Industry

Institutional investors’ net sector flows (16-Jun-25):

• Financial Services: -S\$232.3m
• Health Care: -S\$10.1m
• Industrials: +S\$55.6m
• REITs: +S\$77.9m
• Technology: +S\$9.9m
• Telcos: -S\$79.3m

Retail sector flows (16-Jun-25):

• Financial Services: +S\$147.7m
• Health Care: +S\$12.5m
• Industrials: -S\$32.9m
• REITs: -S\$14.4m
• Technology: -S\$7.1m
• Telcos: +S\$20.3m

Dividends and Special Distributions: Upcoming Key Dates

What’s Ahead: Key Earnings Dates for July and August 2025

Notable reporting dates for July include Raffles Medical, SIA, Mapletree Industrial, CDL REIT, and Mapletree Pan Asia Commercial Trust. In August, OCBC is expected to report before market on 1 August.

SGX Watch-List: Companies Under Surveillance

There are 32 companies currently on the SGX Watch-List, including notable names such as Amos Group, Ascent Bridge, CH Offshore, Cosmosteel, Interra Resources, Manufacturing Integration Technology, Raffles Infrastructure, Trek 2000, and United Food Holdings. Recent additions include Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare.

Conclusion: Singapore Market Outlook 2H 2025

The Singapore equity market remains resilient amid global volatility and shifting sectoral trends. While some companies face margin pressure and earnings headwinds, others like Koh Brothers are on the cusp of a turnaround, buoyed by robust infrastructure spending and improving sector fundamentals. Investors should stay vigilant, monitoring fund flows, earnings reports, and key policy changes in the region for timely portfolio adjustments.