Broker Name: UOB Kay Hian
Date of Report: 22 April 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Stock Focus: Hong Leong Asia (HLA SP)
- Action: BUY (Maintained)
- Target Price: S\$4.90 (53% upside)
- Key Idea: HLA has acquired Yong Tai Loong (YTL), a 60+ year-old architectural building products company, at a compelling 4.3x PE. The acquisition is immediately earnings accretive and expands HLA’s exposure to Singapore’s multi-year HDB construction upcycle.
- Highlights:
- EPS is expected to rise by 18.6% (pro forma 2025 EPS from S\$0.1508 to S\$0.1789).
- YTL is one of only five HDB-approved household shelter suppliers, providing defensible, high-quality revenue streams.
- Industry tailwinds: Durable revenue visibility from large HDB BTO pipeline targeting 55,000 units by 2027.
- Valuation: Inexpensive trading multiples (2027F PE 15.5x, EV/EBITDA 7.6x), with further earnings upside possible from cross-selling and segment synergies.
- Low execution risk: Retention of YTL management and workforce, with non-compete agreements in place.
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