Lim & Tan Securities
14 August 2025
Singapore Market Update: Key Earnings, Institutional Flows, and Macro Shifts – August 2025

Singapore Stocks Surge: FSSTI Hits Yearly High Amid Global Uncertainty

Singapore’s FSSTI Index closed at 4,272.8, marking a 1.2% daily gain, a 2.4% month-to-date rise, and a robust 12.8% year-to-date increase. Major global indices also posted gains, with the US markets buoyed by expectations of a new, more dovish Fed appointment and potential rate cuts. The HSI Index in Hong Kong surged 2.6% on the day, leading with a 27.7% YTD jump.

Key commodities saw mixed performance, with gold up 0.4% to 3,369.7 (+28.4% YTD), crude oil down 0.8% (-12.6% YTD), and crude palm oil unchanged at 4,436.0 (+8.5% YTD). The Baltic Dry Index jumped over 100% YTD, signaling robust shipping activity.

City Developments Limited (CDL): Strong Revenue Growth, But Limited Upside

CDL shares rose to S\$6.80 (+45 cents), after reporting half-year revenue of S\$1.7 billion (up from S\$1.6 billion in 1H2024), and net profit after tax and non-controlling interest (PATMI) of S\$91.2 million (versus S\$87.8 million in 1H2024).

• Strong property development performance, full profit recognition from Copen Grand JV EC, and contributions from The Myst, Norwood Grand, CanningHill Piers, Tembusu Grand, The Orie, and Kassia.
• Capital recycling: Over S\$1.5 billion in contracted divestments YTD. Expected completion of South Beach mixed-use development sale in Q3 2025 will add ~S\$465 million to divestment gains.
• Net foreign exchange losses of S\$63.1 million in 1H2025 (vs. a gain of S\$51.3 million in 1H2024) dragged PATMI; excluding FX, PATMI would have soared 322.7% to S\$154.3 million.
• Depreciating USD impacted USD-denominated loans for US hotel acquisitions and working capital, resulting in segment losses for hotel operations.
• Lower pre-tax profit of S\$139.9 million (down due to FX losses and reduced divestment gains); excluding FX, pre-tax profit up 95% y/y.
• Property development was the largest revenue driver, up 24.3%, boosted by Singapore projects and strategic divestments in London and China.

Investment properties revenue was stable (+0.4%), supported by Republic Plaza, Jungceylon Shopping Center, City Square Mall, and living sector projects in the UK and Japan. Hotel operations posted a pre-tax loss of S\$84.4 million, hit by FX losses, inflationary cost pressures, and weak performance in Singapore and the US.

• Strong capital position: S\$1.8 billion in cash reserves; S\$3.5 billion in cash and undrawn committed bank facilities.
• Net gearing ratio: 70% (vs. 69% FY2024).
• Average borrowing cost reduced to 4.0% (vs. 4.4% FY2024), reflecting global rate cuts.
• Special interim dividend of 3.0 cents per ordinary share declared.
• CDL market cap: S\$6.08 billion, trading at 15.5x forward PE, 0.7x PB, and 1.6% dividend yield. Consensus target price equals current price, limiting further upside.

Recommendation: Downgraded to HOLD due to limited upside after recent share price run-up.

InnoTek Limited: Regional Expansion Amid Declining Profits

InnoTek Limited (S\$0.395, down ½ cent) reported a challenging 1H2025, with revenue dropping 15.6% to S\$102.5 million (from S\$121.6 million in 1H2024) and net profit after tax at just S\$0.1 million (down from S\$3.1 million).

• Weak customer demand across all segments, driven by US-China tariffs and trade policies.
• TV/Display segment: Lower orders from key customers in weak US and European markets.
• Office Automation (OA): Lower sales in China, partly offset by better performance in Southeast Asia.
• GPU server segment: Impacted by trade tensions and product model changes.
• Automotive: Higher EV component sales offset by weaker petrol/gasoline markets in China and reduced US exports.
• Gross profit fell 21.3% to S\$13.9 million; gross margin at 13.6% (vs. 14.6%). EPS dropped to 0.18 cents (from 1.36 cents). NAV per share at 71.4 cents (vs. 76.2 cents as of Dec 2024).

Despite the downturn, InnoTek maintains a healthy balance sheet, with net cash of S\$54.1 million, representing 59% of its market cap (S\$91 million).

Regional Diversification and Strategic Initiatives

• New subsidiary in Melaka, Malaysia (Mansfield Melaka), with operations slated for Q2 2026, targeting precision metal stamping and assembly.
• Expansion in Thailand and Vietnam since 2017 to diversify manufacturing footprint and reduce China exposure.
• Active customer engagement in AI-related fields and investment in GPU server products (advanced chassis and liquid-cooling systems).
• Automotive sector volatile amid shift to EVs; expanding Thailand facility for Tier-1 customers.
• OA segment faces softer outlook; close customer collaboration to maintain pipeline.
• TV/Display remains challenging, but Thailand operations show growth and capacity expansion.
• Vietnam: Adjusted production capacity to match demand; subsidiary Hua Yuan Sheng faces order declines and may undergo restructuring.

Recommendation: Downgraded to HOLD due to weaker 1H performance and an uncertain 2H outlook.

Market Fundamentals: Dividend Announcements and Watch-List Updates

Upcoming Dividends & Special Distributions

SGX Watch-List Companies

32 companies currently 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.

Institutional & Retail Fund Flows: Sector Trends

Top Institutional Net Buys and Sells (Week of 4 Aug)

Top Retail Net Buys and Sells (Week of 4 Aug)

Institutional investors were net sellers (-S\$256.8m), while retail investors were net buyers (+S\$144.3m) during the week. Sector highlights show strong institutional flows into Industrials and Technology, while retail flows favored Financial Services and Utilities.

Share Transactions: Acquisitions, Disposals, and Buybacks

• Key acquisitions included IFS Capital, Sanli Environmental Eng, Indofood Agri Resources, Stamford Land Corp, Old Chang Kee, Credit Bureau Asia, and GKE Corp Ltd.
• Significant disposals by Sanli Environment, GKE Corp Ltd, IFS Capital, and iFast Corp Ltd.
• Active share buybacks by HK Land, Keppel Ltd, Global Investment Limited, Olam, OCBC, DBS, and others.

Macro Market Insights: US Dollar Weakness and China Tech Risks

US Dollar and Euro Dynamics

Rising US macro uncertainty and external imbalances are driving euro strength. Trump’s policy agenda has amplified balance of payments pressures and raised questions about the US’s global financial role. This has increased policy uncertainty, equity volatility, and US risk premia, supporting a multi-year bullish outlook for EUR/USD.

China/HK: DJI Faces Regulatory Roadblocks in the US

Chinese drone-maker DJI, controlling over 70% of the US market, is under threat from a pending ban due to national security audit requirements. DJI’s attempts to engage US authorities have been rebuffed amid bipartisan concerns about data security and Chinese law. The company continues lobbying to avoid its technology being placed on the FCC’s Covered List, which would bar future imports and sales in the US.

DJI’s situation mirrors broader concerns over Chinese tech firms like TikTok, as US regulators scrutinize data sharing and supply chain security. DJI drones are favored for their competitive pricing and are widely used by filmmakers, farmers, law enforcement, and firefighters.

Consensus Valuation Tables: Dividend Yields, P/E, P/B, EV/EBITDA

Conclusion: Navigating Opportunities Amid Volatility

Singapore’s equity market demonstrates resilience and growth, bolstered by strong performances from property developers and ongoing sectoral shifts. However, global macro uncertainties, trade tensions, and regulatory hurdles for Chinese technology pose risks, warranting cautious optimism for investors. Dividend distributions and robust balance sheets provide some buffer, but earnings volatility and watch-list activity highlight the need for careful stock selection and portfolio management.