Singapore Stock Market Report: SIA Engineering Upgrade, UMS Accumulate & Global Market Analysis – May 13, 2025

Lim & Tan Securities

13 May 2025

Daily Market Review: SIA Engineering Upgrade and Key Market Highlights

Financial Market Overview

The FSSTI Index closed at 3,876.2, up by 0.7%, with a month-to-date (MTD) increase of 1.1% and a year-to-date (YTD) increase of 2.3%. Other major market indices showed varied performance:

• INDU Index: 42,410.1 (up 2.8% 1D, 4.3% MTD, -0.3% YTD) [[1]]
• SPX Index: 5,844.2 (up 3.3% 1D, 4.9% MTD, -0.6% YTD) [[1]]
• CCMP Index: 18,708.3 (up 4.3% 1D, 7.2% MTD, -3.1% YTD) [[1]]
• UKX Index: 8,605.0 (up 0.6% 1D, 1.3% MTD, 5.3% YTD) [[1]]
• NKY Index: 37,644.3 (up 0.4% 1D, 4.4% MTD, -5.6% YTD) [[1]]
• HSI Index: 23,549.5 (up 3.0% 1D, 6.5% MTD, 17.4% YTD) [[1]]
• SHCOMP Index: 3,369.2 (up 0.8% 1D, 2.8% MTD, 0.5% YTD) [[1]]
• VIX Index: 18.4 (down -16.0% 1D, -25.5% MTD, 6.0% YTD) [[1]]

Singapore market summary included a daily market value of S\$1,051.0 million and a daily market volume of 810.1 million. The 52-week STI high was 4,005.2, and the low was 3,198.4. [[1]]

Key interest rates were reported as follows:

• 3 Mth SGD SORA: 2.3 (-0.2% 1D, -1.8% MTD, -24.0% YTD) [[1]]
• SG 10 YR Bond Yield: 2.4 (0.7% 1D, -1.9% MTD, -15.0% YTD) [[1]]
• US 10 YR Bond Yield: 4.5 (2.1% 1D, 7.4% MTD, -2.1% YTD) [[1]]

US futures showed:

• Dow Jones: 42,509.0 (0.0% 1D, 4.3% MTD, -0.3% YTD) [[1]]
• S&P 500: 5,865.8 (0.0% 1D, 5.0% MTD, -2.1% YTD) [[1]]
• NASDAQ: 20,944.8 (0.0% 1D, 6.5% MTD, -2.4% YTD) [[1]]

Commodities were reported as:

• Gold: 3,238.3 (up 0.1% 1D, -1.5% MTD, 23.4% YTD) [[1]]
• Crude Oil: 62.0 (up 1.5% 1D, 6.4% MTD, -13.6% YTD) [[1]]
• Baltic Dry: 1,299.0 (down -1.3% 1D, -6.3% MTD, 30.3% YTD) [[1]]
• Crude Palm Oil: 3,814.0 (up 0.3% 1D, -2.5% MTD, -7.0% YTD) [[1]]

On Monday, the S&P 500 increased by 3.26%, the tech-heavy Nasdaq composite rose by 4.35%, and the Dow Jones moved up by 2.81%. [[1]]

Idea of the Day: SIA Engineering (SIE)

SIA Engineering (SIE) reported a 44% year-on-year improvement in net profit, reaching \$139.6 million. This was supported by stable growth in demand for aircraft maintenance, repair, and overhaul (MRO) services. The Group posted a 13.8% year-on-year increase in revenue, amounting to \$1,245.1 million for the financial year ended 31 March 2025. [[1, 2]]

• Group expenditure increased by 12.7%, primarily due to higher manpower costs and material usage. [[2]]
• Operating performance improved by \$12.3 million year-on-year, with operating profit rising from \$2.3 million to \$14.6 million. [[2, 3]]
• Associated and joint venture companies saw a similar trend, with a 17.4% year-on-year increase in share of profits to \$118.6 million. [[2, 3]]
• Profits from the engine and component segment increased by 15.8% to \$113.1 million, while the airframe and line maintenance segment saw a 66.7% increase to \$5.5 million. [[3]]
• The Group exited the Pratt & Whitney PW1500G engine Risk-Revenue Sharing Programme (“RRSP”) and made a one-time write-off of \$25.1 million in net assets. [[3]]
• Line maintenance services experienced growth due to healthy air travel demand, with 8% more flights handled in Singapore compared to the previous year. [[3]]
• Base maintenance checks required longer hangar stays due to a higher proportion of legacy aircraft and supply chain issues. [[3, 4]]
• Engine and component shops achieved higher repair and overhaul output, with engine test capacity doubled to meet growing demand. [[3, 4]]

The Group is focused on investing in three key areas: expanding geographical footprint across the Asia-Pacific region, scaling capacity and developing MRO capabilities for new-generation aircraft, and strengthening the core business. [[4]]

• Line maintenance network expansion includes new stations in Indonesia and Japan. [[4, 5]]
• TIA Engineering Services Company Limited was incorporated to provide line maintenance services at Cambodia’s new Techo International Airport, expected to commence in July 2025. [[4, 5]]

SIA Engineering’s market cap stands at S\$2.5 billion, trading at 16x forward PE and 1.5x PB, with a dividend yield of 3.9%. The consensus target price is S\$\$2.60, representing a 14.0% upside from the current share price. Given improving prospects, decent upside potential & yield and its strong financial position, the rating on SIA Engineering has been upgraded to “Accumulate”. [[5]]

UMS Integration Limited (UMS)

UMS Integration Limited announced a tax-exempt dividend of 1 cent to reward shareholders, reporting a Group net attributable profit of S\$9.8 million on the back of a 7% increase in revenue to S\$57.7 million in 1QFY2025. The higher revenue was driven by better performances from both its Semiconductor and Aerospace businesses, which grew 6% and 22% respectively. [[6]]

• A 12% decline in the Others segment was noted due to soft market conditions affecting the tooling and material distribution business. [[6]]
• Semiconductor component sales jumped 19% to S\$28.9 million in 1QFY2025, driven by higher demand from its new customer. [[6, 7]]
• Semiconductor Integrated System (“IS”) sales dipped 8% to S19.7 million due to supply chain issues which have since been resolved. [[7]]
• Net attributable profit remained stable at S\$9.8 million in 1QFY2025, with net profit maintained at S\$10.1 million. [[7]]
• Personnel costs rose 6% due to increased headcount and salary inflation, while depreciation expenses jumped 36% due to the addition of more production equipment. [[7]]
• Other expenses grew 8% due to more professional fees incurred for the Group’s secondary listing exercise. [[7, 8]]

The Group generated S\$1.1 million in free cash flow and grew its net cash by S\$2.2 million to S\$81.4 million in 31 March 2025. [[8]]

UMS Chairman and CEO, Mr Andy Luong, noted that the Group performed well in the first quarter, with improved revenue, gross margin expansion, and healthy cash flow. Sales in Malaysia almost tripled due to strong orders from a new key customer. [[8, 9]]

According to SEMI, global fab equipment spending for front-end facilities in 2025 is anticipated to increase by 2% year-over-year (YoY) to \$110 billion. Fab equipment spending is projected to rise by 18% in the following year, reaching \$130 billion. [[9, 10]]

Mr Luong stated that the company does not expect any major direct impact from the tough US trade policies. The Group expects IS shipments to register double-digit increase in 2QFY2025 and components shipments for its new key customer to accelerate in the coming quarters. [[10, 11]]

At UMS’s last traded price of \$1.05, it is capitalized at \$746 million and consensus forecast of \$50 million implies a forward PE of 15x. With its prospects improving, yield of 5% and consensus target price of \$1.23 implying a potential upside of 18%, the rating is upgraded from “Hold” to “Accumulate”. [[11]]

FSSTI Stock Selection

Macro Market News Affecting US, Hong Kong and China Markets

BCA Research indicated that PMIs confirm global growth is stalling, reinforcing an overweight in government bonds and underweight in risk assets. Services witnessed the worst deterioration, but manufacturing is still contracting. [[12, 13]]

• The US composite PMI missed expectations, falling to 51.2 from 53.5, with services slipping to 51.4. [[13]]
• Manufacturing improved slightly to 50.7 but remains at risk of contraction. [[13]]

Diverging inflation signals amid a synchronized slowdown support a defensive asset allocation. Flat US core capital goods orders reinforce defensive positioning. [[13, 14]]

Chinese travellers are expected to spend a record US\$968 billion on mainland trips this year. Spending on international holidays is also poised to finally outpace pre-Covid-19 levels in 2025. [[14, 15]]

Share Transactions

Acquisitions

• IFS Capital: Randy Sim acquired 428,000 shares at S\$0.132, resulting in a new balance of 5,078,000 shares and a stake of 1.35%. [[16]]
• Q&M Dental: Quan Min Holdings acquired 1,100,000 shares at S\$0.32, resulting in a new balance of 500,099,989 shares and a stake of 52.70%. [[16]]
• Darco Water Tech Ltd: Wang Zhi acquired 376,200 shares at S\$0.075, resulting in a new balance of 45,589,618 shares and a stake of 48.58%. [[16]]
• Southern Alliance Mining: Pek Kok Sam acquired 55,000 shares at S\$0.60, resulting in a new balance of 310,946,600 shares and a stake of 63.62%. [[16]]
• UOB: Wee Ee Cheong acquired 100,000 shares at S\$34.47, resulting in a new balance of 179,670,416 shares and a stake of 10.755%. [[16]]
• Wingtai Holdings Ltd: Cheung Wai Keung acquired 30,000 shares (ND), resulting in a new balance of 470,669,859 shares and a stake of 61.69%. [[16]]

Disposals

• Wee Hur: Goh Yew Gee disposed of 1,000,000 shares at S\$0.545, resulting in a new balance of 19,000,000 shares and a stake of 2.07%. [[16]]
• AEM Holdings: EPF Board disposed of 1,000,000 shares at S\$1.17, resulting in a new balance of 27,542,644 shares and a stake of 8.79%. [[16]]

Share Buybacks

Institutional and Retail Fund Flows

Week of 28 April 2025:

• Institutional investors net buy (+S\$195.2m) vs. (-S\$192.7m) a week ago. [[17]]
• Retail investors net sell (-S\$114.2m) vs. (-S\$2.2m) a week ago. [[17]]

Top 10 Institution Net Buy (+) Stocks (S\$M)

1. OCBC (65.1) [[17]]
2. SIA (30.6) [[17]]
3. Sembcorp Industries (25.8) [[17]]
4. Singtel (24.5) [[17]]
5. UOB (22.9) [[17]]
6. ST Engineering (18.3) [[17]]
7. SGX (17.5) [[17]]
8. Yangzijiang Shipbuilding (14.7) [[17]]
9. Keppel DC REIT (13.9) [[17]]
10. Jardine Matheson (13.2) [[17]]

Top 10 Institution Net Sell (-) Stocks (S\$M)

1. DBS (41.8) [[17]]
2. iFast Corporation (37.9) [[17]]
3. Mapletree Logistics Trust (11.2) [[17]]
4. Seatrium (9.9) [[17]]
5. Frasers Centrepoint Trust (4.0) [[17]]
6. Wilmar International (3.6) [[17]]
7. Mapletree Industrial Trust (3.3) [[17]]
8. City Developments (2.8) [[17]]
9. SATS (2.2) [[17]]
10. Venture Corporation (1.8) [[17]]

Top 10 Retail Net Buy (+) Stocks (S\$M)

1. iFast Corporation (46.1) [[17]]
2. Wilmar International (12.6) [[17]]
3. Mapletree Logistics Trust (8.8) [[17]]
4. DBS (6.3) [[17]]
5. Mapletree Industrial Trust (5.9) [[17]]
6. CapitaLand Investment (4.1) [[17]]
7. Venture Corporation (4.0) [[17]]
8. City Developments (3.4) [[17]]
9. Yangzijiang Shipbuilding (2.5) [[17]]
10. Jardine Cycle & Carriage (2.4) [[17]]

Top 10 Retail Net Sell (-) Stocks (S\$M)

1. SIA (34.1) [[17]]
2. OCBC (30.6) [[17]]
3. Singtel (26.3) [[17]]
4. Sembcorp Industries (15.0) [[17]]
5. Keppel (14.3) [[17]]
6. UOB (9.5) [[17]]
7. Sinarmas Land (9.1) [[17]]
8. ComfortDelGro (7.4) [[17]]
9. Hongkong Land (7.0) [[17]]
10. CapitaLand Integrated Commercial Trust (6.2) [[17]]

Institutional Investors Net Buy/Sell (S\$M) by Sector

Retail Investors Net Buy/Sell (S\$M) by Sector

STI Constituents – Week of 28 Apr

Dividends / Special Distributions / Others

• Oiltek: 1.8 ct Final + Every 1 Share will get 2 Bonus Shares (Ex-Dividend Date: 8 May, Payable: 19 May) [[21]]
• Valuemax: 2.68 cts Final (Ex-Dividend Date: 8 May, Payable: 22 May) [[21]]
• China Aviation Oil: 3.72 cts Final (Ex-Dividend Date: 9 May, Payable: 27 May) [[21]]
• AIMS APAC REIT: 2.53cts (Jan-March’25) (Ex-Dividend Date: 16 May, Payable: 25 June) [[21]]
• Sin Heng Heavy Machinery: 1 ct Final + 4 cts Special (Ex-Dividend Date: 16 May, Payable: 26 May) [[21]]
• Zheneng Jin Jiang Env: 2.3ct Final (Ex-Dividend Date: 16 May, Payable: 29 May) [[21]]
• Frasers Logistics & Commercial Trust: 3.0 cts (1Q25) (Ex-Dividend Date: 19 May, Payable: 18June) [[21]]
• Thai Beverage: THB 15cts Interim (Ex-Dividend Date: 22 May, Payable: 6 June) [[21]]
• Hotung Inv: 10.86 cts Final (Ex-Dividend Date: 27 May, Payable: 19 June) [[21]]
• Jardine Cycle and Carriage: US84 cts Final (Ex-Dividend Date: 28 May, Payable: 13 June) [[21]]
• SUTL: 5 ct Final (Ex-Dividend Date: 2 June, Payable: 19 June) [[21]]
• Union Gas: 1 ct Final (Ex-Dividend Date: 12 June, Payable: 27 June) [[21]]
• UMS: 1ct (1Q25) (Ex-Dividend Date: 9 July, Payable: 24 July) [[21]]
• SIA Engineering: 7 cts Final (Ex-Dividend Date: 28 July, Payable: 12 Aug) [[21]]
• UOB: 25 ct Special (Ex-Dividend Date: 15 Aug, Payable: 28 Aug) [[21]]

SGX Watch-List

32 Companies Under SGX Watch-List (including latest additions) [[23]]

• Amos Group (06-Jun-23) [[23]]
• Ascent Bridge Ltd (04-Dec-19) [[23]]
• ASTI Holdings (06-Jun-19) [[23]]
• British And Malayan Hldgs (06-Jun-23) [[23]]
• CH Offshore (06-Jun-23) [[23]]
• Cosmosteel (05-Jun-18) [[23]]
• Datapulse Technology (06-Jun-23) [[23]]
• Debao Property (04-Dec-19) [[23]]
• Eneco Energy (04-Dec-19) [[23]]
• Full Apex (Holdings) (05-Jun-17) [[23]]
• GRP Limited (06-Jun-23) [[23]]
• Interra Resources (05-Dec-17) [[23]]
• Intraco Ltd (06-Jun-23) [[23]]
• IPC Corp (06-Jun-23) [[23]]
• Jadason Enterprises (06-Jun-23) [[23]]
• Jasper Investments (Salt Investments) (06-Jun-23) [[23]]
• Manufacturing Integration Technology (06-Jun-23) [[23]]
• Metis Energy (05-Dec-18) [[23]]
• Raffles Infrastructure (06-Jun-19) [[23]]
• Shanghai Turbo (06-Jun-23) [[23]]
• SMI Vantage (04-Dec-19) [[23]]
• Trek 2000 Intl (06-Jun-23) [[23]]
• United Food Hldgs (06-Jun-19) [[23]]
• USP Group Limited (04-Dec-19) [[23]]

Latest Additions since 2H2023 [[23]]

• Addvalue Technologies (05-Dec-23) [[23]]
• Renaissance United (05-Dec-23) [[23]]
• Telechoice (05-Dec-23) [[23]]
• Tiong Seng Hldgs (05-Dec-23) [[23]]
• Global Invacom Group (05-Jun-24) [[23]]
• Green Build Technology (05-Jun-24) [[23]]
• Keong Hong (05-