Broker: Lim & Tan Securities
Date of Report: 18 July 2025

Singapore Market Outlook: Earnings, Strategic Partnerships, and Key Institutional Moves Power Q3 Momentum

Market Overview: Indices, Interest Rates, and Commodities Snapshot

The Singapore market continues to show resilience and upward momentum, as reflected by the FTSE Straits Times Index (FSSTI), which closed at 4,161.4, marking a 0.7% daily gain and a robust 9.9% increase year-to-date. Major global indices also posted positive returns, with the Dow Jones, S&P 500, and Nasdaq all registering gains, supported by steady economic data and a stable macro environment.

Commodities showed mixed performance: Gold rose to S\$3,342.3 (up 27.3% YTD), while crude oil traded at S\$67.5 (down 5.8% YTD). The Baltic Dry Index surged by 91.2% YTD, signaling recovery in the shipping sector. Daily market value reached S\$1,419.5 million with a volume of 1,908 million shares traded.

Idea of the Day: Food Empire Holdings and Capital A Berhad Forge Strategic Beverage Partnership

Food Empire Holdings (\$2.12, up \$0.11) has teamed up with Capital A Berhad (KLSE: 5099) in a groundbreaking strategic partnership aimed at launching a new range of ready-to-drink beverages across Southeast Asia. The collaboration, formalized via a Memorandum of Understanding between Empire International Sdn Bhd and Santan Food Services Sdn Bhd, kicks off with the launch of a Vietnamese iced coffee product. This product will be available both on AirAsia flights and in retail channels across the region.

• Inflight Offering: Passengers on AirAsia can soon enjoy a co-branded Vietnamese iced coffee, blending regional authenticity with convenience and quality.
• On-Ground FMCG: The same product line will be sold at select retail outlets under the Santan brand, ensuring brand consistency and easy accessibility.
• Consumer Trends: The companies are focusing on authentic flavors and modern lifestyle trends, including healthier options with reduced sugar.

The partnership is designed to pave the way for further co-branded and private label initiatives in beverages and snacks. Food Empire’s Executive Chairman, Tan Wang Cheow, emphasized the alignment with consumer trends and the goal of making authentic Vietnamese coffee widely accessible. Capital A’s CEO Tony Fernandes highlighted the collaboration as a celebration of ASEAN’s culture and innovation, aiming to create a product that tells a regional story. Food Empire remains favored for its stable, defensive product portfolio, with an “Accumulate on Weakness” rating as it trades at a forward PE of 15-16x versus 20% growth rates.

Hyphens Pharma: Launching Winlevi® in Southeast Asia

Hyphens Pharma International Limited (S\$0.33, up 0.5 cts), Singapore’s leading specialty pharmaceutical and consumer healthcare group, has announced the launch of Winlevi® (clascoterone) cream 1% in Singapore and Malaysia. This marks the first entry of this novel topical acne treatment into Southeast Asia, supported by an exclusive license and supply agreement with Cassiopea S.p.A., a subsidiary of Cosmo Pharmaceuticals N.V. The agreement spans 10 Southeast Asian countries, covering Singapore, Malaysia, Indonesia, Philippines, Vietnam, Thailand, Brunei, Cambodia, Laos, and Myanmar.

• Innovation: Winlevi® is the first new acne treatment molecule in over 40 years, targeting the androgen-sebum pathway with a topical androgen receptor inhibitor. It reduces sebum and inflammation without systemic anti-androgen effects, making it safe for both male and female patients.
• Dermatology Portfolio: Winlevi® bolsters Hyphens’ proprietary dermatology lineup, which already includes treatments for acne, atopic dermatitis, hyperpigmentation, and hair loss.
• Rollout: Officially launched in July 2025 in Singapore and Malaysia, with broader regional registration underway. A multinational advisory board is supporting clinical integration.
• Milestone: Since its US launch in 2021, Winlevi® has become the most prescribed branded topical acne treatment, with over 1.3 million prescriptions.

Hyphens Pharma is capitalized at S\$102 million, trades at 8.7x forward P/E, 1.4x price-to-book, and offers a 4.5% dividend yield. Bloomberg consensus target price is S\$0.35 (6.1% upside). With steady growth prospects and a defensive brand portfolio, Hyphens Pharma is rated “Accumulate on Weakness.”

Other Market Highlights: Theme Parks, Macro Trends, and Institutional Flows

China’s Theme Park Landscape: Competitive Pressures and Consumer Frugality

The opening of Legoland’s theme park in China, now the world’s largest of its kind, faces a challenging consumer environment. With Warner Bros Discovery and Peppa Pig attractions coming to Shanghai in 2027 and Legoland expanding in Shenzhen, competition is heating up. However, economic pressures and changing consumer habits have led to a decline in per capita spending and profits for domestic attractions, with nearly a quarter of large theme parks reporting losses in 2024.

• Shanghai Disneyland remains the top performer, but Morgan Stanley projects its revenue will decline from US\$1.5 billion to US\$1.4 billion this year.
• Consumers are increasingly budget-conscious, focusing spending on essentials and cutting back on souvenirs and discretionary purchases.

US Macro Trends: Defensive Positioning Amid Labor Market Uncertainty

Despite low unemployment, US labor market indicators signal growing difficulty in job finding. Consumption remains the key growth driver, and any labor market weakness poses downside risks. With equities at record highs and tight credit spreads, strategists are recommending a shift towards lower-beta, less cyclical sectors. Slowing growth and subdued inflation are expected to push the Federal Reserve toward easing.

Institutional and Retail Fund Flows: Key Stock Movements

Institutional investors were net buyers in the week of 7 July 2025 (+S\$87.3m), although this was lower than the previous week (+S\$213.3m). Retail investors continued to be net sellers (-S\$325.5m vs. -S\$304.7m a week ago).

Sector-wise, institutional investors showed net buying in technology, telcos, and utilities, but net sold REITs and selected industrials. Retail flows were positive for REITs but negative for technology and telcos.

Dividend Announcements and Ex-Dividend Dates

Multiple blue-chip companies have announced upcoming dividends and special distributions, providing yield opportunities for investors:

SGX Watch-List: Latest Entrants and Ongoing Monitoring

There are currently 32 companies on the SGX Watch-List due to various compliance or performance criteria. Recent additions since 2H2023 include Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare.

Conclusion: Steady Growth, Defensive Picks, and Sector Opportunities

The Singapore market is characterized by stable index growth, strategic corporate partnerships, and innovation-driven product rollouts. Institutional flows favor large-cap defensives and growth technology names, while investors should watch for further developments in consumer and healthcare sectors. Dividend announcements provide additional yield opportunities, and the SGX Watch-List is an important area for risk monitoring. The outlook remains constructive, with a bias toward defensive accumulation on weakness in leading names like Food Empire and Hyphens Pharma.