Broker: Lim & Tan Securities
Date of Report: 7 July 2025

Singapore Market Outlook: Detailed Analysis of Hiap Tong, Boustead Singapore, and Key Market Movers in July 2025

Market Overview: Steady Gains Amid Global Uncertainty

The Singapore Financial Markets continue to demonstrate resilience in the face of global uncertainty. The FSSTI Index closed at 4,013.6, reflecting a moderate year-to-date gain of 6.0%. Other major indices, such as the Dow Jones and S&P 500, also posted solid year-to-date advances, highlighting broad-based optimism despite volatility in select sectors.

Key interest rates have trended lower, with the 3-month SGD SORA at 2.0% and SG 10-year bond yield at 2.1%. The VIX Index, a measure of volatility, stands at 17.5, up 6.7% on the day but relatively subdued year-to-date.

Hiap Tong Corporation: Navigating a Competitive Landscape

Financial Performance for FY2025

• Revenue: Decreased marginally by S\$0.4 million (0.4%) from S\$92.3 million in FY2024 to S\$91.9 million in FY2025.
• Gross Profit: Increased by S\$0.7 million (4.3%) to S\$17.6 million, improving gross profit margin from 18.3% to 19.1%.
• Net Profit: Declined to S\$3.1 million in FY2025 from S\$4.1 million in FY2024, with earnings per share falling to 0.98 cents (from 1.32 cents).
• Net Asset Value per Share: Rose to 31.48 cents as at 31 March 2025 from 30.72 cents a year prior.

Segment Analysis

• Work Train Operation Services: Gross profit margin advanced significantly from 21.1% to 25.2%, aided by improved efficiency.
• Trading Business: Margin increased from 8.6% to 22.8% due to higher pricing, despite a drop in trading activity.
• Lifting and Haulage (Singapore): Margin declined from 22.9% to 21.3%, impacted by higher labor costs and increased competition.

Outlook and Strategic Initiatives

• The Group is optimistic about a strong pipeline of infrastructure projects in Singapore and is targeting improved fleet utilization and operational efficiency.
• Manpower services remain stable, with margin improvements contributing positively.
• In Malaysia, the Group remains cautious, closely monitoring the lifting and haulage segment while seeking new opportunities in response to local economic conditions.
• The Group plans to commence redevelopment of its property at 22 Soon Lee Road in 2H2025, subject to regulatory approval.

Dividend and Valuation

• A first and final cash dividend of 0.1 cents per share is proposed for FY2025, subject to shareholder approval at the upcoming AGM on 29 July 2025.
• At 9 cents per share, Hiap Tong’s market capitalization stands at S\$29 million, trading at 10x PE with a 1.1% dividend yield.
• Peer Comparison: Sin Heng Heavy Machinery is considered superior, with a recent privatization bid at 58 cents per share, an ex-cash PE of 5–6x, and a much more attractive 6.4% yield. Notably, half of Sin Heng’s share price is backed by net cash of just under S\$48 million.

Boustead Singapore: Strong Profit Growth and Strategic Expansion

FY2025 Highlights

• Net Profit: Rose 48% year-on-year to S\$95.0 million; adjusted for other gains/losses and impairments, net profit was up 8% year-on-year.
• New Contracts: Secured S\$377 million in new engineering projects, more than double FY2024’s figure.
• Geospatial Division: Achieved record revenue of S\$221.4 million, a 4% increase; operating profit up 28% to S\$51.9 million.
• Real Estate Solutions Division: Revenue fell 64% to S\$134.3 million due to a lower order backlog, but operating profit surged 117% to S\$37.8 million, buoyed by a S\$29 million one-off non-cash gain from the transfer of Boustead Projects’ real estate asset management and fund management business to UIB in exchange for a 20% stake in UIB.
• Expansion into Malaysia and Indonesia continues to be a focus for growth.

Dividend

• Total Dividend for FY2025: 7.5 cents per share (including a 4.0 cent final ordinary dividend and a 2.0 cent special dividend, both with scrip option), up from 5.5 cents in FY2024.

Valuation and Outlook

• Boustead Singapore’s market cap is S\$698 million, trading at 7.3x PE and 1.2x PB, with a 3.9% dividend yield.
• The company is well-positioned for further upside, supported by attractive valuations, a robust net cash position, special dividends, and potential value unlocking from a REIT spin-off.
• The outlook remains positive, with Boustead maintaining an “Accumulate” rating and expected to benefit from sector tailwinds and strategic initiatives.

Key Dividend Yields and Valuations Among Major Singapore Stocks

Macro Market News: China Banks, US Manufacturing, and Sector Trends

• Chinese insurers, led by Ping An Insurance Group, have increased holdings in major Chinese banks, banking on high dividend yields amid challenging sector headwinds and property sector weakness.
• Ping An’s stake in Hong Kong-listed Industrial & Commercial Bank of China reached up to 18%, with similar increases in China Merchants Bank and Agricultural Bank of China.
• Hong Kong-listed Chinese banks now offer dividend yields above 4%, outpacing 10-year government bonds (1.65%).
• The sustainability of the rally in Chinese bank stocks is uncertain due to margin compression, high funding costs, and weak credit demand.

• In the US, the June Empire State Manufacturing Survey dropped to -16.0, reflecting continued softness in new orders and capital spending, despite improved expectations. This divergence has led to a defensive market stance, with a preference for fixed income over equities amid labor market headwinds.

Share Transactions: Acquisitions, Disposals, and Buybacks

Notable Recent Acquisitions

• Q&M Dental: Quan Min Holdings acquired 2,200,000 shares (55.30% stake).
• CDW Holdings: Yap Tong Teck acquired 72,100 shares (0.032% stake).
• Indofood Agri Resources: PT Indofood Sukses Makmur Tbk acquired 9,056,200 shares (85.87% stake).
• Singapore Shipping Corp: Ow Chio Kiat acquired 120,600 shares (43.73% stake).
• Mewah International: Lee Tong Choon acquired 11,000,000 shares (49.7% stake).
• Capitaland India Trust: Aberdeen acquired 968,600 shares (5.05% stake).

Major Disposals

• UOBKH: Tang Wee Loke sold 254,600 shares (4.77% stake).
• Tricklestar Ltd: Bernard Christopher Emby sold 3,500,000 shares (16.06% stake).

Key Share Buybacks (1–4 July 2025)

Upcoming Dividends and Special Distributions

Key Dates Ahead: Earnings and Announcements

• July: Qianhu (18), Aztech, Hutchinson Port (22), Digital Core REIT, OUE REIT (23), Suntec REIT (24), Keppel DC REIT, Ifast Corp (25), Raffles Med, SIA, Mapletree Industrial (28), Keppel Pacific Oak (29), Keppel REIT, CDL REIT, MPACT (30), Elite UK REIT, Seatrium, Keppel Ltd (31).
• August: OCBC (1), Lendlease Global (4), Venture (6), Genting, IREIT Global (7), IFS Capital (8), Wilmar (12), City Developments (13).

SGX Watch-List: Companies Under Review

A total of 32 companies are 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.

• Other notable companies: Amos Group, Ascent Bridge Ltd, ASTI Holdings, British And Malayan Holdings, CH Offshore, Cosmosteel, Datapulse Technology, Debao Property, Eneco Energy, Full Apex (Holdings), GRP Limited, Interra Resources, Intraco Ltd, IPC Corp, Jadason Enterprises, Jasper Investments (Salt Investments), Manufacturing Integration Technology, Metis Energy, Raffles Infrastructure, Shanghai Turbo, SMI Vantage, Trek 2000 Intl, United Food Holdings, USP Group Limited.

Summary: Singapore Markets Stay Resilient with Opportunities Emerging

Despite persistent global headwinds, Singapore’s corporate sector remains robust, with select companies like Boustead Singapore and Hiap Tong demonstrating operational resilience and strategic adaptability. Investors should monitor upcoming dividend payouts, share buybacks, and earnings reports for actionable opportunities. Meanwhile, sector trends in China and the US underscore the importance of defensive positioning and yield-focused strategies in the current environment.