UOB Kay Hian Private Limited
August 11, 2025

Singapore Exchange Delivers Robust FY25 Results: Growth Accelerates with New Dividend Policy and Upbeat Outlook

Overview: Singapore Exchange (SGX) Delivers Strong Performance in FY25

Singapore Exchange Ltd (SGX), Asia’s leading multi-asset exchange and market infrastructure provider, has reported a robust set of financial results for FY25, reinforcing its position as a gateway connecting global investors to Asian markets. The company’s broad-based growth across all business segments, a new progressive dividend policy, and an optimistic forward outlook have made SGX a focal point for investors seeking resilient exposure to financial markets.

Key Highlights

• Share Price: S\$16.02
• Target Price: S\$16.66 (up from S\$14.08)
• Upside Potential: +4.0%
• Market Capitalization: S\$17.1 billion
• Rating: HOLD (Maintained)

Financial Performance: FY25 Results Exceed Expectations

SGX’s FY25 core net profit reached S$609.5 million, marking an impressive 15.9% year-on-year growth and aligning closely with analyst forecasts. The company demonstrated solid revenue expansion across all major segments, underlining its diversified business model.

Segment Analysis: Broad-Based Expansion Across Businesses

• FICC (Fixed Income, Currencies & Commodities)
  • Revenue up 8.6% yoy to S\$321.6m.
  • Exchange-traded currency derivatives volume surged 49.7% yoy, mainly driven by INR/USD and USD/CNH futures.
  • Commodity derivatives volume increased 6.2% yoy, led by iron ore derivatives.
  • OTC FX headline average daily volume rose 28.5% yoy.
  • Bond listings: 843 in FY25, raising S\$296.0b (slightly lower than FY24).
• Cash Equities
  • Revenue jumped 18.7% yoy to S\$392.7m.
  • Securities daily average traded value (SDAV) climbed 26.5% yoy to S\$1.34b.
  • Total traded value for cash equities and related products up 27.6% and 25.6% yoy, respectively.
  • Net clearing fees improved from 2.46bp to 2.59bp.
  • Six new equity listings raised S\$25.7m, compared to seven listings and S\$117.0m in FY24.
• Equity Derivatives
  • Revenue rose 13.8% yoy to S\$345.9m.
  • Overall derivatives volume up 10.3% yoy.
  • Strong growth in FTSE China A50 (+23.0%) and GIFT Nifty 50 (+9.9%) index futures.
  • Volume declines in Nikkei 225 (-24.9%), FTSE Taiwan (-7.4%), and MSCI Singapore (-7.7%) index futures contracts.
  • Average net fee per contract slightly lower at S\$1.29 due to mix changes.
• Platform and Others
  • Revenue increased 3.0% yoy to S\$238.0m.

Margin and Profitability Trends

• Adjusted EBITDA Margin: Improved to 64.1% (FY24: 61.2%)
• Adjusted Operating Profit Margin: Rose to 58.2% (FY24: 54.0%)
• Adjusted Net Profit Margin: Increased to 47.0% (FY24: 45.3%)

Dividend Policy: New Progressive Approach

SGX’s new dividend policy is a standout development for income-seeking investors:

• Final quarterly dividend for 4QFY25 raised to 10.5 S cents (vs 9.0 S cents in 4QFY24), exceeding projections.
• Total FY25 dividend: 37.5 S cents, equating to a 2.3% yield.
• New commitment: Quarterly dividends to increase by 0.25 S cent per quarter over FY26-28.
• Projected annual dividends: 44.5/48.5/52.5 S cents for FY26/27/28, with estimated yields of 2.8%, 3.0%, and 3.3% respectively.
• Expected payout ratio: 72-73% (up from 62% in FY25).

Strategic Outlook: Growth Drivers and Opportunities

SGX management maintains a confident medium-term outlook:

• Group revenue (excluding treasury income) targeted to grow at 6-8% per annum.
• Key drivers: Low-to-mid teens percentage growth in OTC FX and exchange-traded derivatives.
• OTC FX expected to contribute mid-to-high single-digit percent to EBITDA.
• Expense growth forecast at a modest 4-6% for FY26.
• Capital expenditure (capex) expected at S\$90-95m in FY26, below the historical average.
• SGX’s IPO pipeline is the highest in years, with over 30 companies in the medium-term pipeline, supported by the MAS Equity Market Development Program (EQDP).
• Potential for margin expansion as revenue growth outpaces cost increases.

Earnings Revision and Valuation

• FY26/27 core earnings forecasts raised to S\$662m/S\$715m (+1.1%/+6.5%) following refined revenue and cost assumptions.
• Target price increased to S\$16.66, based on 24.9x FY27F PE, representing 2 standard deviations above the historical mean PE of 21.8x.
• SGX’s valuation reflects its resilient business model, progressive dividend policy, and anticipated benefits from global uncertainties and Singapore market developments.

Broker Recommendation: HOLD with Accumulate on Dips

• Current rating: HOLD, as share price nears the target price.
• SGX is recommended for accumulation during price dips, given its robust multi-asset business model and positive medium-term trajectory.
• Potential catalysts include heightened trading volatility from macro/geopolitical uncertainties, better-than-expected revenue growth, margin expansion, and value-accretive acquisitions.

Operating Metrics: Business Segment Performance

Market and Volume Trends

• Cash equity market total traded value jumped 27.6% yoy.
• Exchange-traded currency and commodity contract volume rose 25.9% yoy.
• Equity derivatives contract volume increased by 10.3% yoy.

SGX Historical Forward PE

• PE has ranged from -2SD (18.7x) to +2SD (24.9x) over the last decade, with the current valuation at the higher end reflecting improved growth prospects and dividend policy.

Balance Sheet and Cash Flow

• Total Assets (FY25): S\$4.14 billion
• Cash/ST Investments (FY25): S\$919 million, forecast to rise to S\$1.49 billion by FY28
• Net Cash Position: Strong, with net debt/cash to equity at -69.6% in FY25, improving further in subsequent years
• Dividend Payments: S\$385 million in FY25, rising to S\$561 million in FY28

Conclusion: SGX Positioned for Sustainable Growth and Income

Singapore Exchange continues to demonstrate its resilience and growth potential, driven by strong performance across all business segments, a committed and progressive dividend policy, and a favorable outlook anchored by product innovation, risk management demand, and supportive government initiatives. While the current valuation suggests limited short-term upside, SGX remains a compelling accumulation opportunity for investors looking for sustainable growth, attractive yields, and exposure to Asian capital markets.

Disclosures

• This article summarizes a research report prepared by UOB Kay Hian Private Limited. The information herein is for informational purposes only and does not constitute investment advice or an offer to buy or sell securities.