Broker: UOB Kay Hian
Date of Report: Thursday, 7 August 2025

Asia Market Insights: Key Earnings, Upgrades, and Opportunities Across Hong Kong and Singapore Stocks

Executive Summary: Market Movers and Indices Overview

U.S. markets closed higher, powered by consumer discretionary, staples, and technology. The Dow Jones gained 0.18%, S&P 500 rose 0.73%, and NASDAQ advanced 1.21%. Asian indices showed robust performance, with the Hang Seng Index up 4.3% month-on-month and the Straits Times Index (STI) rising 4.9%. Top sector action and company earnings in Hong Kong and Singapore are setting the tone, with key financials, airlines, tech giants, and REITs under the spotlight.

Singapore and Hong Kong: Market Wrap & Top Movers

Singapore

• STI closed at 4,227.70, up 19.12 points.
• DBS (+1.3%), Keppel (+1.4%), and Yangzijiang Shipbuilding (+2.3%) led gains.
• Golden Agri-Resources (-1.9%) and UMS Integration (-1.9%) were top losers.
• Total trading value reached S\$1.39 billion with 309 gainers and 217 losers.

Hong Kong

• Tracker Fund of Hong Kong, China Construction Bank, and Bank of China saw the highest trading turnovers.
• China Railway Group (+7.6%) and Zijin Mining (+7.1%) were among the top gainers.
• Orient Overseas (-5.8%) and Great Wall Motor (-4.4%) led the declines.

Company Analysis and Results: In-Depth Review

BeOne Medicines (6160 HK): Strong Growth and Margin Expansion

BeOne Medicines delivered a stellar 1H25 with revenue surging 44.7% year-on-year to US\$2.4 billion and adjusted net earnings of US\$389 million, surpassing consensus forecasts. The company raised its revenue and gross margin guidance for 2025, signaling robust earnings and free cash flow expansion. Key drivers include:

• BRUKINSA: Global sales soared 49% year-on-year in 2Q25 to US\$950 million, becoming the BTKi market leader in the U.S. and posting strong gains in the EU and China.
• TEVIMBRA: PD-1 mAb sales rose 22% year-on-year to US\$194 million.
• Margins: Product gross margin improved to 86.5% (vs. 84.3% in 1H24) due to favorable sales mix and cost productivity.
• Cash Flow: Both operating and free cash flows turned positive, at US\$307.7 million and US\$207.4 million respectively.
• R&D: Over 170 global trials ongoing; new applications and pivotal readouts expected in 2H25.

Outlook: Management projects 2025 revenue of US\$5.0-5.3 billion and improved gross margins. The pipeline remains robust with new filings and milestones expected, although risks include policy changes, competition, and R&D execution.

Recommendation: BUY (Target price: HK\$240.00)

Cathay Pacific Airways (293 HK): Profits Plateau, Cargo Faces Headwinds

Cathay Pacific reported a 1H25 core net profit of HK\$3.65 billion (+11.9% year-on-year), in line with expectations and forming 40.5% of the full-year estimate. Highlights include:

• Revenue: Up 9.5% year-on-year to HK\$54.3 billion, with passenger services (+12.7%), cargo (+1.2%), and other services (+8.7%) all growing.
• Pax Yields: Full-service carrier yields dropped 12.3% year-on-year, with low-cost HK Express down 21.6%.
• Cargo: Facing higher uncertainties in 2H25 due to changing U.S. tariffs and trade policy. Cargo yields are projected to see a mid-teen percentage drop.
• Dividend: Interim dividend of 20 HK cents, ex-dividend on 3 Sep 2025.
• Fleet: Exercised rights to purchase 14 Boeing 777-9s, with up to 7 more as options, for US\$8.1 billion, deliveries by 2034.

Outlook: Earnings are expected to peak in 2025, then moderate in 2026-27 as competition and cargo challenges persist. New aircraft orders and strong balance sheet support long-term strategy, but current valuations are considered unattractive.

Recommendation: SELL (Target price: HK\$10.23)

AIA Group (1299 HK): Solid Growth in VONB and Earnings, Regulatory Resilience

AIA Group is poised to report a 16% year-on-year increase in Value of New Business (VONB) for 1H25, driven by strong volume in China and Hong Kong and improved margins. Key highlights:

• VONB: Expected to rise 16% year-on-year in 1H25. Hong Kong VONB growth forecast at 29% on pre-regulation demand surge.
• AIA China: Shifted business mix toward participating products (>80% of long-term savings VONB), with new operations in four geographies.
• China Post Life: US\$277 million capital injection to support growth and solvency, minimal impact on overall capital position.
• Regulatory Readiness: Well-prepared for HKIA’s new regulatory guidelines, with commission structure already largely aligned.
• Dividend: Interim DPS estimated at HK\$0.48 (+8.1% year-on-year); current 2025 dividend yield at 5% but expected to moderate in 2026.

Outlook: Growth is supported by robust product mix, regulatory compliance, and capital strength. The lack of clarity on 2026 shareholder returns is a slight overhang.

Recommendation: BUY (Target price: HK\$91.00)

Xiaomi Corp (1810 HK): Mixed Signals as Growth Remains Intact

Xiaomi is set to report 2Q25 earnings with robust revenue growth in IoT, EV, and internet services, but with smartphone margins under pressure. Key takeaways:

• Revenue: Projected to surge 27.1% year-on-year to Rmb113.0 billion for 2Q25.
• Smartphones: Shipments in China outpace the market, but margins are impacted by rising DDR4 memory prices and ASP decline during promotional periods.
• IoT: Tablets and wearables drive 35% year-on-year growth, but margins expected to drop sequentially.
• Internet Services: Revenue stable at Rmb9.3 billion (+12.2% year-on-year), with healthy 77% margin.
• EV Segment: SU7 Ultra deliveries exceed 81,000 units, boosting ASP and margins; revenue up 13.2% quarter-on-quarter to Rmb21.0 billion.

Outlook: Smartphone shipment forecasts have been trimmed due to weaker growth, while earnings upgrades for 2026-27 reflect optimism in IoT and EV segments. Near-term share price could face pressure as consensus estimates catch up.

Recommendation: BUY (Target price: HK\$69.20)

CapitaLand Ascendas REIT (CLAR SP): New Acquisitions and Rental Reversions Fuel Growth

CLAR reported a 1H25 DPU of 7.477 S cents (-0.6% year-on-year), slightly below expectations, but positive rental reversions and new acquisitions are set to boost 2H25. Highlights:

• Rental Reversion: Achieved a positive average of 8% in 2Q25 across Singapore, U.S., and Australia.
• Occupancy: Portfolio occupancy improved to 91.8% due to successful backfilling in Australia.
• New Acquisitions: Completed S\$878 million of acquisitions YTD, including data centre (9TSD) and business space (5SPD) in Singapore.
• Leverage: Aggregate leverage stable at 37.4%, interest coverage ratio 3.7x, and average cost of debt at 3.7%.

Outlook: Management is recycling assets towards tech, logistics, and biomedical science properties, with development projects in Singapore and the U.S. providing future uplift. DPU forecast is unchanged, with a focus on resilient growth and healthy balance sheet.

Recommendation: BUY (Target price: S\$4.02)

Venture Corporation (VMS SP): Earnings Resilient Amid Tech Volatility

Venture Corporation’s 2Q25 earnings came in at S\$57 million (-11% year-on-year, +2% quarter-on-quarter), aligned with expectations, with 1H25 earnings forming 50% of the full-year estimate. Key points:

• Revenue: 1H25 revenue fell 8% year-on-year due to lower demand in lifestyle consumer technology, but improved reliability for a key customer’s products led to fewer replacements.
• Dividend: Special dividend of 5 S cents, with interim dividend of 25 S cents, totaling 30 S cents for 1H25.
• Growth Segments: Life sciences, medical, semiconductor equipment, and industrial segments showed robust momentum.
• Financial Strength: Net cash of S\$1.3 billion (approx. 30% of market cap), consistent dividend, and ongoing share buybacks.

Outlook: VMS is investing to capture demand in hyperscale data centers and advanced semiconductors, continuing to win business across technology domains. Earnings forecasts are maintained.

Recommendation: BUY (Upgraded, Target price: S\$14.35)

Yangzijiang Shipbuilding (Holdings) (YZJSGD SP): Record Margins and Profits Power Upgrades

Yangzijiang Shipbuilding posted a record 1H25 with net profit up 37% year-on-year to Rmb4.2 billion, beating expectations. Key insights:

• Margins: Shipbuilding gross profit margin reached 34.5%, with pre-tax and net profit margins of 40.1% and 32.5% respectively.
• Orderbook: 236 vessels worth US\$23.2 billion as of June 2025; clean energy vessels account for 74% of orderbook value.
• New Orders: Lagged at US\$537.2 million (14 vessels) in 1H25 due to U.S. tariffs; company optimistic about converting US\$2 billion in LOIs for 2028-2029 slots.
• Balance Sheet: Net cash of Rmb18.3 billion (approx. S\$3.28b), gross gearing at 21.7%.

Outlook: Earnings upgraded on higher margin assumptions. Even if new order wins remain slow, strong balance sheet and orderbook underpin healthy earnings through 2027.

Recommendation: BUY (Target price: S\$3.45)

Technical Trading Ideas: Singapore Focus

Civmec (CVL SP)

• Trading Buy Range: S\$0.985-0.990
• Target: S\$1.080
• Protective Stop: S\$0.960
• Price rebounded from base line support; technical indicators remain bullish.

Yangzijiang Financial Holding (YZJFH SP)

• Trading Buy Range: S\$0.960-0.965
• Target: S\$1.080
• Protective Stop: S\$0.920
• Price trading above cloud; momentum indicators strong.

Conclusion: Investment Themes and Forward Strategy

The latest earnings season highlights resilient growth across key Asian sectors. BeOne Medicines, AIA, and Yangzijiang Shipbuilding display strong margin expansion and robust outlooks. Xiaomi continues to diversify successfully, while CapitaLand Ascendas REIT and Venture Corporation offer stable yields and growth levers. Cathay Pacific faces sectoral headwinds, but maintains a solid balance sheet.

Investors should watch for continued innovation, margin discipline, and prudent capital management as catalysts across the region’s leading stocks.