Market Highlights and Overview

The FSSTI Index closed at 3,877.5, reflecting a 0.1% drop for the day but maintaining gains of 0.6% month-to-date (MTD) and 2.4% year-to-date (YTD). Regional indices like the HSI Index surged significantly by 3.7% for the day and 11.8% MTD, while the NKY Index declined by 0.8% for the day and 1.1% MTD. The commodities market saw mixed movements, with gold slightly down by 0.1% but maintaining a robust 9.7% YTD gain. Crude oil fell 0.8%, while crude palm oil rose by 0.8%.

Oiltek International Limited

Performance Overview: Oiltek (\$1.17, down 1 cent) reported a stellar performance for FY2024, with net profit surging 55% to RM29.6 million. Revenue grew by 14.5% to RM230.3 million, driven by the Edible & Non-Edible Oil Refinery and Product Sales segments. However, the Renewable Energy segment experienced a revenue decline.

Financial Highlights: The Group’s profit after income tax increased significantly, translating to an earnings per share of 20.7 sen. The company boasts zero debt, a net asset position of RM84.3 million, and cash and bank balances of RM106.1 million. Shareholders will receive a total dividend of 2.7 Singapore cents, representing 44.4% of net profit.

Outlook: Oiltek remains optimistic about the Edible & Non-Edible Oil Refinery segment, with the global fats and oils market projected to grow at a CAGR of 4.6% from 2024 to 2033. Additionally, the Renewable Energy segment benefits from increased biodiesel blending mandates in Indonesia and Malaysia.

Recommendation: Oiltek is trading at 20x forward PE with a dividend yield of 2.3%. The target price has been revised upwards to \$1.50, representing a 15% discount to peer valuations. The recommendation remains a “BUY.”

SIA Engineering Company

Performance Overview: SIA Engineering (\$2.35, unchanged) recorded an 8.4% year-on-year increase in flights handled for 3Q FY2024-25. Base Maintenance saw fewer aircraft checks due to supply chain issues and checks with heavier work content. However, engine and component repair output improved.

Financial Highlights: Revenue grew by 11.3% year-on-year to \$324.8 million, while expenditure increased by 8.5% to \$320.1 million. The Group turned around its operating performance, achieving a profit of \$4.7 million compared to a loss of \$3.4 million in the same period last year. Net profit for the quarter was \$38.2 million, an \$11.3 million improvement year-on-year.

Outlook: Despite supply chain challenges, SIA Engineering is implementing a new Enterprise Operating System to enhance planning and operational resilience. The company continues to invest in capacity and geographical expansion for long-term growth.

Recommendation: SIA Engineering is capitalized at \$2.6 billion, trading at a forward PE of 18x and a price-to-book ratio of 1.5x. The one-year target price of \$2.60 suggests a 10% upside. The recommendation is “HOLD.”

Keppel DC REIT

Performance Overview: Keppel DC REIT (\$2.10, down 0.06) announced the divestment of its Kelsterbach Data Centre in Frankfurt for EUR 50.0 million. This move aligns with its strategy to focus on hyperscale data centres.

Financial Highlights: The divestment will improve portfolio occupancy to 96.6% and WALE to 7.4 years. Proceeds will be used for debt repayment, reducing aggregate leverage to 31.2%. The transaction is not expected to materially impact net asset value or distribution per unit.

Outlook: Keppel DC REIT remains well-positioned for accretive investments in key digital hubs across Asia Pacific, Europe, and the US, ensuring resilience with high occupancy and long WALE.

Recommendation: At a market cap of \$4.7 billion, the REIT trades at 19x PE and 4% yield. The one-year target price of \$2.44 implies a 15% upside. The recommendation is “HOLD.”

Institutional and Retail Fund Flow Insights

For the week of February 3, 2025, institutional investors recorded net sell-offs of S\$130.6 million, primarily in Financial Services and Industrials. Retail investors, on the other hand, posted net buys of S\$256.6 million, favoring Financial Services and Industrials. Notable institutional net buys included SGX (+S\$68.8M) and Genting Singapore (+S\$2.7M), while DBS (-S\$51.6M) and OCBC (-S\$29.1M) led net sell-offs. Retail investors heavily bought DBS (+S\$94.3M), OCBC (+S\$46.3M), and Seatrium (+S\$39.7M).

Upcoming Events and Dividends

Noteworthy upcoming dividends include Paragon REIT (2.2c) and Far East Hospitality Trust (2.08c), with ex-dividend dates on February 18 and 19, respectively. Key earnings announcements for February include UOB, Wilmar, SIA, and ST Engineering, among others.