Broker: CGS International
Date of Report: June 18, 2025

China Aviation Oil Singapore and SingTel: In-Depth Technical and Strategic Analysis for Investors

Market Recap: Shifting Retail Trends and Economic Sentiment

Investors are facing an environment marked by volatility and shifting consumer sentiment, particularly in the wake of recent US economic data. US retail sales declined for a second consecutive month in May, dropping 0.9%, the largest decline of the year, after a 0.1% drop in April. This marks the first back-to-back decrease since late 2023. The downturn, led by autos, gasoline, and building materials, follows an earlier surge as consumers rushed to beat impending tariffs. Consumer confidence, especially among homebuilders, has fallen to its lowest since the end of 2022. High living costs and persistent high interest rates are weighing on household finances and spending, with even restaurant and bar sales showing their largest decline since early 2023.

China Aviation Oil Singapore Corp Ltd: Bullish Technical Reversal Gaining Momentum

Ticker: China Aviation Oil Singapore Corp Ltd (CAO)
Last Price: S\$0.85

China Aviation Oil Singapore Corp Ltd is a vital supplier of jet fuel to both domestic and international airlines flying through China’s airports. The company’s trading portfolio also includes fuel oil, gas oil, crude oil, and various petrochemical products, with activities extending to physical and paper swaps as well as futures trading.

Technical Analysis: Signs of a Strong Bullish Reversal

• Breakout Pattern: CAO has decisively broken above overhead resistance, signaling a potential upside trend driven by an inverted head and shoulders reversal pattern.
• Ichimoku Cloud: A clear bullish signal detected, confirming upward momentum.
• MACD: The MACD histogram is positive, with the signal and MACD lines crossing at the bottom and now moving toward the zero line—a classic bullish indicator.
• Stochastic Oscillator: Shows strong upward movement, further reinforcing bullish momentum.
• Rate of Change (ROC): 23-period ROC has rebounded and remains positive, supporting the case for further gains.
• Directional Movement Index: Confirms robust bullish strength.
• Volume: Healthy expansion in trading volume, adding conviction to the technical reversal.

This confluence of technical signals suggests CAO is poised for a strong uptrend if the reversal sustains. The outlined support and resistance levels, along with multiple target prices, provide investors with a clear roadmap for potential entries and exits.

SingTel: Attractive Dividend Yields, But Valuations Cap Upside

Ticker: SingTel

• Recommendation: Hold
• Revised RNAV-derived Target Price: S\$4.10
• Dividend Yield Estimate (FY26-28F): Above 5%
• Asset Recycling Target (3-4 years): S\$9 billion
• CY26F P/E: 21.6x (over 1 standard deviation above the post-2009 mean trading range)

SingTel remains a staple in the Singaporean telecommunications sector. Following its 4QFY25 results, the company has outlined a higher asset recycling target of S\$9 billion for the next 3-4 years, which could provide additional room for boosting dividend payouts. Estimated dividend yields are projected to remain above 5% for FY26-28F, making SingTel attractive for income-focused investors.

However, the stock’s CY26F P/E ratio now stands at 21.6x, more than one standard deviation above its historical post-2009 mean. This elevated valuation limits the stock’s upside potential unless there is significant unlocking of asset value. SingTel’s attractive yield is therefore tempered by concerns around its current valuation multiples.

Detailed Analyst Commentary and Methodology

The report utilizes a combination of technical indicators and fundamental analysis to provide actionable insights for investors. The technical approach for CAO leverages patterns, momentum indicators, and volume analysis, while SingTel’s assessment is rooted in relative valuation and dividend yield analysis.

Summary Table: Target Prices and Recommendations

Brokerage Disclosures and Compliance

CGS International operates across multiple jurisdictions, complying with various regulatory frameworks. The report’s recommendations are strictly general in nature and intended for institutional, accredited, or expert investors. Investors are advised to conduct their own due diligence and consult professional advisers before making investment decisions. CGS International, its affiliates, and analysts may hold positions in the securities mentioned and may seek to provide investment banking, advisory, or other services to these companies.

Ratings Framework

• Add: Expected total return above 10% over 12 months.
• Hold: Expected total return between 0% and 10% over 12 months.
• Reduce: Expected total return below 0% over 12 months.

Sector and country ratings follow a similar logic, with Overweight, Neutral, and Underweight designations reflecting the relative attractiveness of sectors or countries versus benchmarks. As of March 31, 2025, 71.0% of covered stocks were rated Add, 20.9% Hold, and 8.2% Reduce.

Conclusion: Key Takeaways for Investors

• China Aviation Oil Singapore Corp Ltd is at a technical inflection point, with multiple bullish signals indicating a potential for significant upside if the reversal holds.
• SingTel offers stable and attractive dividend yields, though upside is limited by current elevated valuations.
• The broader market context highlights caution among US consumers and investors, underlining the importance of careful stock selection and risk management in the current environment.

Both companies present clear opportunities and risks. Investors should monitor technical signals for CAO and valuation multiples for SingTel, while staying alert to macroeconomic shifts that could impact performance.