Market Overview
The report opens with a detailed summary of key financial market movements. The FSSTI Index was at 3,927.5, trading slightly down by 0.2% on the day, yet showing positive monthly (MTD: +1.9%) and year-to-date (YTD: +3.7%) performances. Other major indices such as the INDU, SPX, CCMP, UKX, and NKY were recounted with varying shifts. Notably, the HSI Index recorded significant intraday movement, dropping 1.6% but still up 11.6% on the month and 12.5% for the year.
Alongside equity indices, key 10-year bond yields for Singapore and the US were reviewed, with the SG 10-year yield at 2.9% and the US 10-year yield at 4.5%, reflecting the global fixed income backdrop. Commodity prices, including gold at S\$2,941.8 and crude oil at S\$72.3, rounded out the market overview.
Deep Dive: Seatrium
Overview and Financial Turnaround
Seatrium emerged as the “Idea of the Day” with a remarkable turnaround story. After posting a net profit of S\$157 million in FY2024 – its first full-year profit since 2017 – the company reversed a previous loss of S\$2.0 billion in FY2023. Underlying net profit improved to S\$200 million from an underlying net loss of S\$28 million, demonstrating a strong financial recovery.
Revenue and Operational Performance
Revenue for FY2024 surged by 27% to reach S\$9.2 billion, driven by robust project execution and an acceleration in the repairs and upgrades segment. The company delivered seven significant projects, including:
- Singapore’s first newbuild membrane-type LNG bunker vessel, Brassavola
- Jack-up rigs Var and Vali
- Salamanca floating production unit (FPU)
- Pluto Train 2 LNG modules
- Bacalhau FPSO unit
- A FLNG facilities conversion
In addition, the Repairs and Upgrades segment completed 231 projects, and new orders worth S\$15.2 billion were secured in FY2024 – the highest new order wins in a decade. The net order book for year-to-date 2025 increased 43% to S\$23.2 billion, with a growing proportion of renewables and green/cleaner projects.
Cost Optimisation and EBITDA
Seatrium’s cost optimisation and restructuring efforts led to an impressive rise in EBITDA from S\$236 million in FY2023 to S\$627 million in FY2024. The company has maintained a prudent approach to capital management, proposing a maiden dividend of 1.5 cents per share to reward shareholders.
Management Commentary and Future Outlook
CEO Chris Ong highlighted the operational excellence driven by the “One Seatrium Global Delivery Model” and pledged to continue pursuing profitable and resilient growth in oil & gas, offshore wind, repairs & upgrades, and new energies. Despite the turnaround, consensus profit expectations of S\$218 million were missed, and there is evidence of pre-results price increases and share-selling by Keppel, prompting the recommendation to “Sell Into Strength” for Seatrium.
Comparative Analysis: Keppel
In contrast to Seatrium, Keppel was mentioned as a preferred alternative for investors. While Seatrium’s valuations appear to be rich at 54.2x FY24 PE (with a forward PE standing at 22.7x and a 1.3x PB), Keppel Ltd offers cheaper valuations and a more attractive yield profile. According to the report, Keppel has already seen its shares being sold – 1.5 million shares traded recently – and is further complemented by the potential monetisation of its legacy rig business. Investors are recommended to switch their focus into Keppel, with an “Accumulate” rating maintained on the stock.
In-Depth Assessment: First REIT
Financial Performance and Dividend Update
First REIT’s healthcare-focused portfolio delivered FY24 revenue of S\$102.2 million and distributable income of S\$49.3 million, matching expectations overall. However, a slight dip in the FY24 dividend per unit (DPU) was observed, slipping 4.8% year-over-year to 2.36 cents mainly due to the depreciation of the IDR and JPY compared to the Singapore dollar.
Operational and Rental Income Dynamics
Despite robust performance from its healthcare assets, rental income fell by 5.9% year-over-year to S\$102.2 million, while local currency earnings in Indonesian properties and Singapore nursing homes experienced modest growth. The REIT’s agreement with Siloam Hospitals, which ensures the higher of either a 4.5% base escalation or an 8.0% performance-based rent, adds to its stability.
Valuation and Yield Considerations
Trading at 0.91x P/B and a forward yield of 9.2%, First REIT presents an attractive option when compared to peers like Parkway Life REIT (3.8% yield) or the overall S-REIT market (6.2% yield). The report mentions that the yield spread over its risk-free rate is robust, and with gearing remaining healthy at 39.6%, the overall debt situation appears manageable. First REIT’s forecast target price is maintained at S\$0.28, equating to roughly a 1.0x P/B and an 8.6% yield, leading to a recommendation of “Accumulate on Weakness.”
Strategic Initiatives and Growth Prospects
First REIT is actively assessing a Letter of Intent (LOI) from Siloam for its Indonesian hospital assets. The potential divestment may allow the REIT to pare down its debt and reallocate capital towards increased exposure to developed markets such as Australia and Japan. The strategic review is estimated to conclude in 2-3 months, and possibilities of special dividends are not ruled out.
Institutional and Retail Fund Flow Analysis
The report provides a granular overview of recent institutional and retail fund flows within the Singapore Exchange (SGX)-listed companies. Notable highlights include institutional net selling trends, with figures for major stocks such as Singtel, DBS, and Seatrium. For instance, institutional selling was evident with Seatrium recording a net sell of S\$150.7 million, while retail investors notably net bought S\$29.1 million compared to the previous week.
Detailed data across sectors—including consumer cyclicals, non-cyclicals, energy, financial services, healthcare, industrials, materials, and real estate—were provided. Each sector’s net buy/sell activity is broken down over specific weeks (from 20 January to 10 February 2025), highlighting the dynamic investor sentiment in both institutional and retail channels.
Corporate Transactions and Share Movements
Acquisitions and Disposals
The report also lists a series of corporate acquisition and disposal transactions. Key highlights include
