Introduction

UOB Kay Hian’s latest regional morning notes provide an extensive analysis of key stocks in the Singapore market. This detailed report highlights the performance of their Alpha Picks portfolio for 2024, their stock recommendations, and the potential growth catalysts for each covered company.

SATS – BUY

Analyst: Roy Chen

SATS is poised for a strong performance in 3QFY25, driven by robust global air cargo volumes and potential disruptions in maritime shipping. The company benefits from its leadership in air cargo handling, with a forecasted core earnings exceeding S\$90 million for the quarter.

• Key Catalysts: Higher air cargo volumes due to potential port strikes and strong earnings performance.
• Valuation: SATS trades at FY26/27 PE of 18.4x/15.7x, with a target price of S\$4.30, pegged to 18.4x FY27 PE.
• Timeline: 3 months.

Yangzijiang Shipbuilding – BUY

Analyst: Adrian Loh

Yangzijiang Shipbuilding is set to expand its order wins in 2025, capitalizing on its new Yangzi Hongyuan yard and maintaining high shipbuilding margins.

• Orderbook: US\$22.14 billion with 224 vessels, 75% of which are green vessels.
• Margins: Sustainable shipbuilding margins, with 3Q24 margins exceeding the 1H24 margin of 25.9%.
• Valuation: Target price of S\$3.60, based on a PE of 9.7x, 1SD above the 10-year average of 6.9x.
• Timeline: 3-6 months.

Sembcorp Industries – BUY

Analyst: Adrian Loh

Sembcorp Industries continues to make strategic acquisitions and expand its renewables portfolio, positioning itself for long-term growth.

• Key Updates: Acquisition of a 30% stake in Senoko Energy, new wind-solar hybrid projects in India, and a hydrogen transportation pipeline.
• Valuation: Target price of S\$7.47, pegged to a PE multiple of 12.8x, 1.5SD above the 2018-24 average PE.
• Timeline: 6+ months.

Seatrium – BUY

Analyst: Adrian Loh

Seatrium is leveraging its strong presence in offshore and renewables markets to secure new contracts and expand its geographic footprint.

• Key Wins: EPCC contract for BP’s Gulf of Mexico project and MOU with Cochin Shipyard in India.
• Orderbook: S\$24.4 billion with deliveries until 2031.
• Valuation: Target price of S\$2.80, based on a P/B multiple of 1.4x applied to its 2025 book value.
• Timeline: 6-12 months.

Centurion Corp – BUY

Analyst: Adrian Loh

Centurion Corp continues to outperform expectations with strong revenue growth from its worker and student accommodation segments.

• Revenue Growth: 27% and 20% YoY for Purpose-Built Workers and Student Accommodation, respectively.
• Dividend Potential: Potential upside to S\$0.035 dividend for 2024, implying a 3.6% yield.
• Valuation: Target price of S\$1.11, based on a PE multiple of 8.7x.
• Timeline: 6-12 months.

Oversea-Chinese Banking Corp (OCBC) – BUY

Analyst: Jonathan Koh

OCBC stands out as the most well-capitalized Singapore bank, with strategic initiatives expected to deliver incremental revenue of S\$3 billion by 2025.

• Capital Position: Fully phased-in CET-1 CAR of 15.6% as of 3Q24.
• Dividend Yield: Attractive 2025 yield of 6.1% with a target price of S\$21.00.
• Timeline: 6-12 months.

Mapletree Industrial Trust – BUY

Analyst: Jonathan Koh

Mapletree Industrial Trust continues to secure high-quality tenants and expand its data center portfolio across Asia Pacific and Europe.

• Occupancy: Data center occupancy improved to 89.2% in 1QFY25.
• Valuation: Target price of S\$3.05 based on DDM.
• Timeline: 6-12 months.

Lendlease Global Commercial REIT – BUY

Analyst: Jonathan Koh

With strong rental reversions and redevelopment projects, Lendlease REIT is well-positioned for growth.

• Key Projects: Multi-functional event space at Grange Road Car Park and negotiations with new tenants.
• Valuation: Target price of S\$0.77 based on DDM.
• Timeline: 6-12 months.

Venture Corp – BUY

Analyst: John Cheong

Venture Corp is expected to see better revenue in 2H24, supported by new customer acquisitions and product introductions.

• Balance Sheet: Net cash of S\$1,191 million as of 3Q24.
• Valuation: Target price of S\$15.55, pegged to 17x 2025F PE.
• Timeline: 3-6 months.

Marco Polo Marine – BUY

Analyst: Heidi Mo & John Cheong

Marco Polo Marine is a beneficiary of higher charter rates and limited vessel supply, with new projects unlocking further opportunities.

• Key Catalysts: Completion of a new CSOV and Dry Dock 4 in 1Q25.
• Valuation: Target price of S\$0.061, based on 9.5x FY24F PE.
• Timeline: 3-6 months.