UOB Kay Hian
Date of Report: 25 August 2025
Singapore Equities Surge: Banks, REITs, and Consumer Stocks Power a Resilient Earnings Season
Overview: Singapore’s Market Resilience Amid Tariff Uncertainty
Singapore’s first half 2025 earnings season has demonstrated notable resilience, with three-quarters of listed companies meeting or exceeding expectations, even as global tariff uncertainties and a strengthening Singapore dollar cast a shadow over regional markets. The Straits Times Index (STI) showed strength, underpinned by robust bank results, surging REIT rental income, and standout performances from consumer and tech names.
UOB Kay Hian has upgraded its STI year-end 2025 target to 4,602, implying an attractive 8% upside from current levels, with Singapore equities trading at compelling valuations compared to historical norms and Asian peers.
Macroeconomic and Sector Trends: Immunity to Tariff Risks
Many Singapore-listed companies and sectors have shown surprising immunity or minimal impact from US trade tariffs. Semiconductor companies such as UMS Integration and Frencken were largely unaffected due to exemptions. Meanwhile, Singapore’s banks deemed the direct effects on their loan books as “manageable,” further cementing Singapore’s position as a safe haven and attracting investment seeking non-US denominated revenue.
The Monetary Authority of Singapore (MAS) continues to support market liquidity and growth, with S$1.1 billion in new funds allocated under the S$5 billion Equity Market Development Programme. With the bulk of funds yet to be deployed, significant fund flows are anticipated in the coming quarters.
STI Valuation: Attractive Upside, Defensive Quality
Singapore’s equity index has moved to trade at a forward PE multiple of 13.4x, which is not considered stretched, especially given the market’s defensive quality. If a 10% premium is applied, the STI could reach 4,877. Current valuations remain below long-term averages, offering further room for upside.
Top Large Cap Picks for 2025
UOB Kay Hian’s preferred large cap stocks for the remainder of 2025 include:
- CapitaLand Investment (CLI)
- DFI Retail Group (DFI)
- Genting Singapore (GENS)
- Keppel Ltd (KEP)
- Mapletree Industrial Trust (MINT)
- OCBC
- Sea Ltd (SE)
- Sembcorp Industries (SCI)
- Singapore Telecommunications (ST)
- ST Engineering (STE)
- Venture Corp (VMS)
- Yangzijiang Shipbuilding SGD (YZJSGD)
DFI and Sea Ltd are new additions to the list.
Top Small/Mid-Cap Picks
Key small/mid-cap picks include:
- CSE Global
- Far East Hospitality Trust (FEHT)
- Food Empire Holdings (FEH)
- Marco Polo Marine (MPM)
- Sheng Siong (SSG)
- Valuetronics
Responsive Table: Focus Stocks 2025
| Company |
Ticker |
Rec |
Price (S\$) |
Target (S\$) |
Upside (%) |
2025F PE (x) |
2025F Yield (%) |
2025F ROE (%) |
Mkt Cap (S\$m) |
P/B (x) |
| CapitaLand Invest |
CLI SP |
BUY |
2.71 |
3.49 |
28.8 |
18.3 |
4.4 |
5.0 |
13,516 |
1.1 |
| DFI Retail (US\$) |
DFI SP |
BUY |
3.12 |
4.30 |
37.8 |
16.4 |
18.0 |
40.2 |
5,443 |
6.8 |
| Genting SP |
GENS SP |
BUY |
0.75 |
0.89 |
19.5 |
15.5 |
5.4 |
6.3 |
9,002 |
1.1 |
| Keppel |
KEP SP |
BUY |
8.36 |
10.46 |
25.1 |
16.8 |
4.0 |
8.4 |
15,119 |
1.5 |
| Mapletree Ind Tr |
MINT SP |
BUY |
2.01 |
3.04 |
51.2 |
15.2 |
6.6 |
7.2 |
5,734 |
1.2 |
| OCBC |
OCBC SP |
BUY |
16.91 |
20.15 |
19.2 |
10.1 |
5.8 |
11.9 |
75,976 |
1.3 |
Sector Deep Dive: Banks, REITs, and Consumer Strength
Banking Sector: Stable Earnings, Attractive Yields, Robust Capital Management
Despite net interest margin (NIM) compression, Singapore’s three major banks delivered resilient earnings in 2Q25. Asset quality remains stable, underlining the sector’s defensive qualities. For 2025, banks offer an attractive average dividend yield of 5.9%, with OCBC highlighted for its low price-to-book ratio.
Capital management initiatives across the banks include special dividends and share buybacks:
- DBS: Capital return dividend of 15 S cents per quarter in 2025, with similar payouts for 2026 and 2027. Share buyback program of S\$3b.
- OCBC: Special dividends amounting to 10% of net profit for 2024 and 2025. Proposed interim dividend of 16 S cents for 2H24. Share buybacks totaling S\$1b over two years.
- UOB: Special dividend of 50 S cents over two tranches in 2025 for its 90th anniversary. Share buyback program of S\$2b over three years.
REITs: Rental Reversions and Capital Recycling
Most REITs posted positive rental reversions in 1H25, ranging from low to high single digits—and even triple digits for Digital Core REIT. Mixed overseas performance was observed, but overall trends remain positive. Notably, Mapletree Industrial Trust and Mapletree Logistics Trust maintained their upward trajectory.
Three companies saw ratings upgrades: City Developments (upgraded to BUY with a higher target price due to strong divestment and capital recycling), Venture Corp (BUY, higher PE-based target), and Aztech Global (upgraded from SELL to HOLD).
Consumer and Healthcare: Growth and Margin Expansion
Consumer companies continued to deliver, with Sheng Siong expanding its store footprint and maintaining margins, while Food Empire Holdings posted strong revenue growth. DFI Retail Group was a standout, rewarding shareholders with a bumper interim dividend after divesting non-core businesses.
Despite rising manpower costs, Raffles Medical reported revenue growth and improved performance in its Chinese hospitals.
Currency Headwinds and Sectoral Observations
The Singapore dollar’s strength impacted companies with significant overseas exposure, including Sembcorp Industries (INR exposure), Riverstone (USD/MYR weakness), City Developments, Mapletree Logistics Trust, and Singapore Airlines (currency swings and Air India issues).
Singapore Market vs Asian Peers: Valuation and Performance
Singapore’s STI now trades at a 2026 PE of 13.1x, P/B of 1.4x, yield of 5.2%, and ROE of 10.6%, outperforming or matching regional indices like HSI, JCI, KLCI, and SET.
| Index |
PE (x) |
P/B (x) |
Yield (%) |
ROE (%) |
| STI |
13.1 |
1.4 |
5.2 |
10.6 |
| HSI |
10.6 |
1.2 |
3.3 |
10.8 |
| JCI |
10.8 |
1.5 |
5.7 |
13.9 |
| KLCI |
13.7 |
1.6 |
4.5 |
9.8 |
| SET |
13.2 |
1.2 |
4.3 |
8.9 |
Best-Performing Stocks: Past Month
Recent top performers include BRC Asia, Venture Corp, DBS, Suntec REIT, Aztech Global, CSE Global, CityDev, First Resources, DFIRG USD, Sea Ltd, ChinaSunsine, PanUnited, YZJ Shipbuilding SGD, iFAST, Marco Polo Marine, Oiltek, Bumitama, Lum Chang Creations, Hong Leong Asia, and PropNex.
Core EPS Growth by Sector
| Sector |
2024 (%) |
2025F (%) |
2026F (%) |
| Aviation |
-8.5 |
-14.6 |
7.4 |
| Finance |
7.8 |
-4.0 |
2.9 |
| Healthcare |
-30.9 |
7.6 |
11.5 |
| Land Transport |
18.0 |
3.2 |
12.6 |
| Plantation |
-17.0 |
17.2 |
10.5 |
| Property |
39.7 |
30.4 |
35.9 |
| REITs |
-4.5 |
0.9 |
6.1 |
| Shipyard |
21.7 |
9.4 |
2.6 |
| Technology |
-8.9 |
-7.1 |
3.3 |
| Telecoms |
8.5 |
8.8 |
9.7 |
| Others |
-5.8 |
-0.9 |
8.1 |
| Overall |
4.1 |
-1.7 |
4.6 |
Company-Level Analysis: Detailed Insights
CapitaLand Investment (CLI)
CLI is favoured for its capital recycling and robust defensive profile. Target price: S\$3.49, representing a 28.8% upside from current levels. 2025F PE is 18.3x, yield 4.4%, ROE 5.0%.
DFI Retail Group
DFI stands out post-divestment, rewarding shareholders with a bumper interim dividend. Target price: US\$4.30, upside 37.8%. 2025F PE is 16.4x, yield 18%, ROE 40.2%.
Genting Singapore (GENS)
GENS is set for a 19.5% upside to S\$0.89. 2025F PE is 15.5x, yield 5.4%, ROE 6.3%.
Keppel Ltd
Keppel is expected to see a 25.1% upside to S\$10.46, with a 2025F PE of 16.8x, yield of 4%, and ROE of 8.4%.
Mapletree Industrial Trust (MINT)
MINT is projected to deliver a 51.2% upside to S\$3.04, with a 2025F PE of 15.2x, yield 6.6%, and ROE 7.2%.
OCBC
OCBC is highlighted as a top pick in banking, with a 19.2% upside to S\$20.15, a 2025F PE of 10.1x, yield 5.8%, and ROE 11.9%.
Sea Ltd
Sea Ltd is forecasted for a 14.1% upside to US\$204.85. 2025F PE is 50.6x, yield 0%, and ROE 21.1%.
Sembcorp Industries (SCI)
SCI is set for a 29.1% upside to S\$7.90. 2025F PE is 10.3x, yield 4%, ROE 19.2%.
Singapore Telecommunications (SingTel)
SingTel’s target price is S\$4.58, 9% upside. 2025F PE is 23.4x, yield 4.3%, ROE 10.3%.
Venture Corp
Venture Corp is upgraded to BUY, with a target price of S\$14.35, representing a 6.9% upside. 2025F PE is 16.6x, yield 5.6%, ROE 7.8%.
Yangzijiang Shipbuilding SGD
YZJSGD is forecasted for a 20.2% upside to S\$3.45, 2025F PE is 7.6x, yield 3.9%, ROE 26.8%.
Small/Mid-Cap Highlights
- CSE Global: 22.3% upside to S\$0.85, 2025F PE 11.9x, yield 3.5%, ROE 24.1%.
- Far East Hospitality Trust (FEHT): 39.7% upside to S\$0.81, 2025F PE 16.9x, yield 6%, ROE 3.6%.
- Food Empire Holdings: 17.7% upside to S\$2.73, 2025F PE 14.6x, yield 3.5%, ROE 19.2%.
- Marco Polo Marine: 13.4% upside to S\$0.076, 2025F PE 7.9x, yield 3%, ROE 13.4%.
- Sheng Siong: 16.5% upside to S\$2.40, 2025F PE 19.8x, yield 3.4%, ROE 27%.
- Valuetronics: 7.1% upside to S\$0.83, 2025F PE 10.2x, yield 6%, ROE 11.8%.
Conclusion: Singapore Equities Poised for Continued Upside
With robust performances from banks, REITs, and consumer stocks, coupled with resilient earnings amid macroeconomic headwinds, Singapore’s equity market is well-positioned for further growth. Attractive dividend yields, valuation discounts, and sector immunity to global tariff risks continue to make Singapore a unique investment destination in Asia for 2025 and beyond.
