BRC Asia: A Hold Recommendation Amid Strong Construction Demand
BRC Asia, trading at \$2.87 (up 3 cents), announced its voluntary 1QFY25 results update, reporting a revenue of S\$349.8 million, down 12.4% year-on-year (YoY). However, profit after tax rose by 14% YoY to S\$19.5 million. The company benefits from Singapore’s robust construction outlook, with construction demand for 2024 surpassing forecasts at S\$44.2 billion. For 2025, the Building and Construction Authority (BCA) projects demand to range between S\$47 billion and S\$53 billion, driven by major projects such as Changi Airport Terminal 5 and Marina Bay Sands expansion.
BRC Asia has a sales order book of approximately S\$1.5 billion as of December 31, 2024, with projects spanning up to five years. Despite the favorable construction outlook, the company trades at 10x forward PE and 1.7x PB with a dividend yield of 5%. As the current price of \$2.87 closely matches the consensus target price of \$2.90, the report recommends a “Hold” on BRC Asia, deeming it fairly valued.
CapitaLand Ascendas REIT (CLAR): Strong Portfolio and Attractive Upside
CLAR, trading at \$2.59, reported a stable performance for FY 2024 with gross revenue and net property income rising 2.9% and 2.6% YoY to S\$1,523.0 million and S\$1,049.9 million, respectively. Distributable income increased by 2.2% to S\$668.8 million, and Distribution Per Unit (DPU) rose slightly by 0.3% to 15.205 cents. Key investments included the development of Summerville Logistics Center in Charleston, South Carolina, and the acquisition of DHL Indianapolis Logistics Center in Indiana, totalling approximately S\$248.2 million.
The portfolio’s occupancy rate improved to 92.8%, with a geographical diversification across Singapore (66%), Australia (13%), the US (11%), and the UK/Europe (10%). CLAR maintains a healthy aggregate leverage at 37.7% and boasts a high proportion of fixed-rate debt at 82.7%. Despite a marginal increase in borrowing costs to 3.7%, the REIT remains financially robust and is rated A3 by Moody’s. The consensus one-year target price of \$3.16 implies a 22% upside, and the report recommends an “Accumulate” rating.
CapitaLand Integrated Commercial Trust (CICT): Consistent Dividend Payout
CICT announced a final dividend of 3.29 cents, payable on March 21, 2025. Despite net institutional selling of S\$23.1 million, the REIT remains a popular choice among retail investors, who recorded a net buy of S\$2.6 million. Its robust commercial property portfolio continues to attract attention, and the payout underscores its commitment to delivering steady returns to investors.
CapitaLand China Trust: Holding Steady in a Challenging Environment
CapitaLand China Trust declared a final dividend of 2.64 cents, payable on March 27, 2025. While the Chinese market faces challenges, including trade barriers and a slow recovery in certain sectors, the trust remains committed to delivering value through its diversified portfolio of properties in China.
Singtel: A Retail Favorite Despite Institutional Selling
Singtel saw institutional net buys of S\$76.0 million, making it the top pick among institutions for the week of January 27, 2025. However, retail investors recorded net sales of S\$68.0 million. The company’s consistent performance and dividend payouts continue to attract institutional attention, even as retail sentiment wavers.
Mapletree Industrial Trust and Mapletree Logistics Trust: Balancing Institutional and Retail Sentiment
Mapletree Industrial Trust faced significant institutional net selling of S\$36.5 million but remained a retail favorite with net buys of S\$30.9 million. Similarly, Mapletree Logistics Trust recorded institutional net selling of S\$15.1 million but strong retail net buys of S\$15.6 million. Both trusts remain resilient in the face of market volatility, underpinned by their diversified portfolios and attractive yields.
Other Key Companies and Highlights
DBS: Institutional net buys of S\$28.4 million underline strong investor confidence, despite retail net sales of S\$57.5 million.
OCBC: Institutional net buys of S\$14.6 million and a continued focus on growth make OCBC a solid choice among banks.
Yangzijiang Shipbuilding: The company recorded institutional net buys of S\$25.8 million and retail net sales of S\$22.4 million, reflecting its strong fundamentals in the shipbuilding industry.
Seatrium: Institutional net selling of S\$19.4 million contrasts with retail net buys of S\$19.8 million, showcasing mixed sentiment among different investor groups.
Conclusion
The February 2025 report by Lim & Tan Securities offers a comprehensive analysis of key companies in Singapore’s financial markets. From BRC Asia’s strong construction outlook to CLAR’s well-diversified portfolio and Singtel’s institutional popularity, the insights provide valuable guidance for investors navigating a complex market environment. With a mix of “Hold” and “Accumulate” recommendations, the report highlights opportunities and challenges across various sectors, making it an essential read for market participants.
