Lim & Tan Securities
30 July 2025

Singapore Market Pulse: FEHT, CH Offshore, Baker Tech, and Institutional Fund Flow Insights – July 2025

Market Overview: Mixed Global Sentiment as Investors Eye Fed Decision

The Singapore Straits Times Index (FSSTI) closed at 4,229.4, registering a slight dip of 0.3%. Despite this, the index has gained 6.7% month-to-date and 11.7% year-to-date. Global markets showed mixed performance, with the Dow Jones steady at 44,795.0, S&P 500 at 6,407.0, and NASDAQ at 23,470.3. Notably, the Hang Seng Index surged by 27.2% year-to-date, reflecting robust sentiment in Hong Kong equities.

On the commodities front, gold prices remained unchanged at S\$3,327.8, up 26.8% year-to-date. Crude oil rebounded strongly, climbing 3.7% for the day to S\$69.2, though still down 3.5% in 2025. The Baltic Dry Index soared 123.3% since the beginning of the year, while crude palm oil rose 4.8%.

Key interest rates revealed a 3-month SGD SORA at 1.9% and Singapore’s 10-year bond yield at 2.1%, both reflecting a downward trend year-to-date. The US 10-year bond yield stands higher at 4.3%.

Featured Equity: Far East Hospitality Trust (FEHT) – Resilient Amid Soft Singapore Hotel Market

Far East Hospitality Trust (FEHT), trading at \$0.61, reported gross revenue of S\$51.6 million for the half-year ended 30 June 2025, marking a 4.2% year-on-year decline. This decrease was mainly attributed to subdued performance in Singapore Hotels and Serviced Residences, offset slightly by higher revenue from Commercial Premises and a maiden S\$1.6 million contribution from Four Points by Sheraton Nagoya (FPN), FEHT’s first overseas acquisition.

Key Financials for 1H2025:

• Gross Revenue: S\$51.6 million (-4.2% YoY)
• Net Property Income (NPI): S\$45.6 million (-7.7% YoY)
• Distribution to Stapled Securityholders: S\$36.0 million (S\$30.6 million taxable income, S\$5.4 million other gains)
• Total Distribution per Stapled Security (DPS): 1.78 cents (1H24: 1.96 cents, -9.2% YoY)
• Aggregate Leverage: 32.8% (post FPN acquisition)
• Total Debt: S\$771.7 million
• Average Cost of Debt: 3.4% per annum
• 60.6% of borrowings on fixed interest rates

The decline in NPI was driven by both lower revenue and higher property-related costs. Finance expenses fell by 15.8% to S\$12.8 million as interest rates eased. FEHT’s balance sheet remains robust, offering financial flexibility for further yield-accretive opportunities.

Operational Highlights

• Singapore Hotels: ADR dropped 4.5% YoY to S\$168; average occupancy steady at 79.4%.
• Performance was dampened by the absence of large-scale events and increased hotel supply, but maintained occupancy through tactical rate management and direct bookings.

Strategic Outlook

FEHT’s first overseas venture into Japan is a strategic move for income diversification. With major MICE and leisure events like the World Aquatics Championships and Formula 1 Singapore Grand Prix ahead, plus new attractions opening in 2025, the sector outlook remains positive. However, global economic uncertainties, geopolitical tensions, and a strong Singapore Dollar could temper the tourism recovery pace.

FEHT trades at 0.7x Price/Book with a forward dividend yield of 6.2%. Bloomberg consensus sets a 1-year target price of \$0.64, implying a 5% upside. Lim & Tan recommends an “Accumulate on Weakness” stance, citing the attractive yield and undemanding valuation.

CH Offshore: Conservative Navigation Amid Revenue Decline

CH Offshore, priced at \$0.019, reported a net profit after tax of \$1.04 million for 1H2025, slightly down from \$1.10 million in 1H2024. Revenue dropped by 27.0% to \$10.82 million, mainly on the back of reduced third-party chartered vessel revenue. Cost of sales also fell from \$9.27 million to \$4.49 million, in line with the lower charter activity.

• Shareholders’ equity rose to \$52.04 million due to profits and an increase in share capital from a Rights Issue.
• Cash and equivalents increased to \$17.27 million, mainly from the Rights Issue, offset by repayment of loans and dry-docking costs.

Management remains prudent amid global trade and shipping uncertainties, especially with ongoing US tariff tensions impacting costs and shipping activity. CH Offshore continues to operate conservatively, adapting to an evolving market landscape.

Privatization Speculation and Recommendation

Earlier speculation highlighted CH Offshore as a potential privatization target due to its low market cap (\$40 million at \$0.019/share) and strong net cash position (\$17 million, or 43% of market cap). With the share price now near the speculative target, the advice is for minority shareholders to “Take Profit.” The company trades at 0.6x P/B, with an EV/EBITDA of just over 2x.

Baker Technology: Sharp Downturn in H1 Performance

Baker Tech, trading at \$0.595, saw its revenues halve to \$23.0 million (-56%) in 1H2025 versus 1H2024, attributed to weaker charter and fabrication income. The group swung to a net loss after tax of \$17.4 million, compared to a \$13.0 million profit a year ago. This was mainly due to:

• Lower contributions from core activities.
• Foreign exchange loss of \$8.0 million in 1H2025 (vs \$3.1 million gain in 1H2024), as the US dollar depreciated by 6% against the Singapore dollar.

• Cash decreased due to operating outflows, capital expenditure, dividend payments, and investment security purchases, partially offset by proceeds from CH Offshore’s Rights Issue.
• Management remains cautious amid geopolitical uncertainty, prioritizing capital preservation while being nimble to growth opportunities.

Both Baker Tech and CH Offshore were negatively impacted by global trade tensions, forex losses, higher tax provisions, and the expiration of key contracts. With CH Offshore’s share price now near speculative privatization levels, investors are advised to take profit.

ByteDance/TikTok: Tax Compliance and Cross-Border Workforce Challenges

ByteDance faces a looming US deadline to divest TikTok’s American operations or face a nationwide ban. The company recently started enforcing Chinese tax laws on its Chinese staff in the US, requiring them to pay taxes on global income. This caught many employees off guard and led to higher tax burdens, with some requesting company compensation for taxes exceeding China’s 45% cap.

The move is seen as a demonstration of law compliance to both Chinese and US authorities. However, it risks undermining morale among Chinese employees in the US and could discourage future relocations, potentially impacting TikTok’s US operations.

Macro Market News: Sentiment, Risks, and Consumption Trends

The ISM Manufacturing Index has slipped over the past six months, signaling softer macro momentum for the US. Historically, this environment leads to equities underperforming bonds. Although consumer sentiment has improved, leading indicators point to downside risks for employment and consumption.

Institutional investors are adopting a defensive allocation, awaiting more evidence of labor market resilience before shifting stance. Meanwhile, TikTok’s tax issues for relocated staff highlight rising cross-border HR complexities in a volatile regulatory landscape.

Singapore Institutional & Retail Fund Flow: Sector and Stock Highlights

Institutional Activity (Week of 21 July 2025)

• Top Institutional Net Buys: DBS (+S\$181.3m), Yangzijiang Shipbuilding (+S\$60.5m), SIA (+S\$42.1m), City Developments (+S\$32.3m), ComfortDelGro (+S\$30.0m).
• Top Institutional Net Sells: Singtel (-S\$57.6m), OCBC (-S\$37.2m), SingPost (-S\$13.6m), Mapletree Logistics Trust (-S\$10.6m), NTT DC REIT (-S\$8.0m).
• Net institutional buy for the week: +S\$335.4m (vs. +S\$122.3m prior week).

Retail Activity (Week of 21 July 2025)

• Top Retail Net Buys: OCBC (+S\$52.3m), Singtel (+S\$42.0m), SingPost (+S\$18.3m), NTT DC REIT (+S\$11.1m), Sembcorp Industries (+S\$10.4m).
• Top Retail Net Sells: DBS (-S\$100.9m), SIA (-S\$41.2m), City Developments (-S\$31.0m), Seatrium (-S\$27.1m), ComfortDelGro (-S\$24.4m).
• Net retail sell for the week: -S\$159.6m (vs. -S\$371.1m prior week).

Key Dividend Announcements

SGX Watch-List: Latest Additions

There are 32 companies under the SGX Watch-List, including recent additions such as Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare. Companies like CH Offshore and Eneco Energy continue to remain under scrutiny for their financial positions.

Conclusion: Navigating Opportunities in a Volatile Market

July 2025 has highlighted the importance of prudent management, strategic diversification, and close attention to macro risks for Singapore-listed companies. Investors are advised to monitor tourism recovery for FEHT, ongoing trade and currency volatility impacting CH Offshore and Baker Tech, and regulatory headwinds for cross-border tech companies like ByteDance/TikTok. With attractive dividend yields and value opportunities, the Singapore market remains a compelling arena for discerning investors.