Overview
This comprehensive report provides a deep dive analysis into the latest Singapore stock strategy. The revision of the portfolio incorporates adding several strong names such as RSTON, UMSH, SIE, CICT while removing CVL, VMS, and LREIT. The detailed analysis below covers every listed company, discussing their recent performance, key catalysts, valuation metrics, and price targets. The recommendations are based on a short‐term outlook (1–3 months) with an equal emphasis on near-term earnings surprises, dividend initiatives, and share price catalysts.
PropNex – BUY
Overview: PropNex reported 2024 net profit of S\$40.9 million, representing a 14% decline year‐on‐year on revenue of S\$783 million. The revenue drop was largely related to the timing of revenue recognition, as property sales were exceptionally strong in the latter half of 2H24.
Dividend and Outlook: The company declared a final dividend of S\$0.03 per share along with a special dividend of S\$0.025 per share. This brings the total 2024 dividend to S\$0.0775 per share – the highest payout ratio (140%) since its listing in 2017. A further special dividend may be on the horizon after robust 1H25 performance.
Growth Catalysts: With a favourable property market outlook in 2025, as new launches are set to almost double with about 13,000 units, strong private new home sales, and sustained momentum on property transactions, the company is expected to recover strongly in the near term.
Recommendation and Target: The report maintains a BUY recommendation. Following the results, the PE-based target price has been raised to S\$1.30 (up from S\$1.18), using a PE multiple of 17.6x based on the 2025 EPS estimate and forecast cash balance considerations.
Yangzijiang Shipbuilding – BUY
Overview: Yangzijiang Shipbuilding (YZJ) demonstrated strong performance in 2024 with revenue rising by 10.1% year‐on‐year to Rmb26.5 billion and PATMI increasing 62% to Rmb6.6 billion. Particularly notable is the improvement in its 2H24 shipbuilding margin, which expanded sequentially by 3.8 percentage points to hit 29.7%.
Market Concerns: Market challenges from the USTR’s proposal to impose port fees (up to US\$1.5 million per vessel) have weighed on the stock – with share prices declining by 27% since the February peak. However, management has pointed out that the fee of approximately US\$100 per container is easily passed on to customers.
Valuation and Catalysts: With an inexpensive 2025F PE valuation of 6.6x and a forecast ROE approaching 25%, the downturn in share price is seen as overdone. Key catalysts include guidance for higher new order wins, margin maintenance above 25%, and proactive exercising of options for containerships in early 2024.
Recommendation and Target: Rated as a BUY, with a PE-based target price of S\$3.50, reflecting a target PE multiple of 9.5x—1 standard deviation above its historical averages.
Sembcorp Industries – BUY
Overview: Sembcorp Industries (SCI) delivered better-than-expected results in 2024, reporting S\$6.4 billion in revenue (down 9% YoY), EBITDA of S\$1.7 billion (down 3% YoY) and a net profit before exceptionals of S\$1.02 billion. The report highlighted an important contribution from Deferred Payment Note income (up 27% YoY) and a contribution from its newly-acquired stake in Senoko Energy.
Dividend Highlight: A generous final dividend of S\$0.17 per share was proposed, resulting in a total 2024 dividend of S\$0.23 per share. This represents an increase in the payout ratio to 40%, a notable improvement over the previous average of 29%.
Catalysts and Valuation: Key share price catalysts include value-accretive acquisitions in the green energy space and potential upward revision of gross renewables capacity targets. The target price has been upgraded from S\$7.47 to S\$8.00, underpinned by a target PE multiple of 12.6x—1.5 standard deviations above the historical average PE.
Recommendation: The stock is maintained as a BUY.
Seatrium – BUY
Overview: Seatrium (STM) achieved its first full year of profits since 2017 with a revenue of S\$9.2 billion—up 27% YoY—and a net profit of S\$156 million. Underlying EBITDA increased by 23% YoY to S\$771 million, supported by procurement and synergy savings amounting to S\$200 million and S\$300 million respectively.
Dividend and Valuation: Notably, Seatrium surprised the market with a final cash dividend of S\$0.015 per share, which signals management’s confidence in the company’s sustainable cash flows and its ability to maintain or grow dividends. Following robust results in 2024, the P/B-based target price has been raised to S\$2.96 and the target P/B multiple is adjusted from 1.4x to 1.5x—1.5 standard deviations above the five-year average.
Catalysts: Expected catalysts include new orders for oil & gas production assets, renewables infrastructure, and the resolution of regulatory overhang from the MAS/CAD investigations.
Recommendation: Seatrium is rated as a BUY.
Centurion Corp – BUY
Overview: Centurion (CENT) posted strong 2024 results with revenue of S\$254 million—up 22% YoY—driven by healthy rental revisions and solid financial occupancies in Singapore, the UK, and Australia. Gross profit surged by 30% YoY to S\$195.6 million, while PATMI jumped 125% YoY to S\$345 million, aided by fair value gains of S\$219 million.
Dividend and Balance Sheet: The company declared a final dividend of S\$0.02 per share. With a balance sheet that has strengthened markedly – net debt/equity falling to 0.43x—the dividend payout and financial stability are better than expected.
Growth and Catalysts: Centurion has an attractive pipeline for 2025 and 2026 in purpose-built accommodations for workers and students across key markets. The share price catalyst includes capacity expansions through joint ventures and the potential for higher dividends in future results.
Recommendation and Target: With a PE-based target price of S\$1.11 and a target PE multiplier of 8.7x (0.5 SD above its long-term average), Centurion is maintained as a BUY.
SIA Engineering – BUY
Overview: SIA Engineering (SIAEC), although trailing in the competitive aviation maintenance sector, is gradually recovering its core earnings. The company enjoys an 85% market share in the Changi Airport line maintenance business, which makes it a key proxy for the revival of air travel activity at Changi.
Earnings Recovery and Dividend: Benefiting from an acceleration in quarterly MRO revenue recognition—should supply chain issues alleviate—the forecast for 4QFY25 net profit is significantly higher at S\$37 million (up from a low base of S\$11 million in 4QFY24). The stock also features proactive share buybacks, with the latest purchase at S\$2.40.
Valuation: Trading at FY26F/27F PE ratios of 16.8x/15.8x (or lower when excluding net cash), along with a forecast dividend yield of 4.5% for FY25 that is expected to improve in the subsequent fiscal years, further underscores its undemanding valuation.
Recommendation: SIA Engineering is maintained as a BUY, supported by organic earnings recovery, dividend growth, and potential M&A activity in the near term.
ComfortDelgro Corporation – BUY
Overview: ComfortDelgro (CD) remains a multi-faceted transport and mobility titan with strong performances in both public transport and taxi segments. In the public transport arena, the UK bus business continues to benefit from margin expansion driven by ongoing contract renewals and electricity cost savings from a new contract, while the taxi segment is buoyed by strategic acquisitions such as A2B and Addison Lee.
Business Dynamics: The UK bus business is expected to see margins trending towards the high single-digits to low-teens, while domestic rail ridership improvements and higher rail fares are counterbalanced by challenges such as the loss of the Jurong-West bus contract. However, for the taxi business, incremental growth in commission rates and the benefit of overseas acquisitions provide additional support.
Valuation and Price Target: With an attractive target price of S\$1.76—based on 16x 2025F PE, which aligns with its five-year average—the stock delivers a decent dividend yield of 6.2% on 2025 estimates. The recent dip in share price is seen as an attractive entry point.
Recommendation: ComfortDelgro is maintained as a BUY, underpinned by strong earnings growth and margin improvements across its segments.
China Sunsine Chemical – BUY
Overview: China Sunsine (CSSC) is poised to benefit from improved market conditions amid robust Chinese stimulus measures. As consumer confidence returns and the automotive industry registers record new car sales, the company is expected to see an uptick in both demand and average selling prices for its rubber chemicals.
Dividend and Financial Strength: With an attractive dividend yield of around 6% and a strong balance sheet supported by a robust cash position of Rmb2,074 million (up 20% hoh), Sunsine has ample scope to increase its dividend and continue its share buyback programme. Sales volume from rubber chemicals is also expected to grow, impacted positively by higher capacity utilisation rates, particularly in Southeast Asia.
Valuation: Trading at an undemanding 2x 2024 ex-cash PE and targeted at a multiple of 7.5x 2025F PE (or +1SD above the historical mean), the stock presents a compelling valuation.
Recommendation: China Sunsine Chemical is maintained as a BUY with a target price of S\$0.58.
UMS Integration – BUY
Overview: UMS Integration (UMSH) is setting the stage for a robust 2025 driven by significant new customer wins and the ramp-up of volume production. The company is well positioned to benefit from strong global semiconductor demand—with the semiconductor market hitting record annual sales of over US\$600 billion—and from the ongoing boom in global air travel, which bolsters its aerospace business.
Growth Catalysts: UMS is introducing a range of new products and is witnessing an improvement in earnings quality attributable to orders from its major semiconductor and aerospace customers. The launch of new factory capacity and better-than-expected cost management further underpin its bright outlook.
Valuation and Target: With a recommended target price of S\$1.21 based on a PE-based valuation of 17.6x 2025 EPS—pegged 1 standard deviation above its historical mean—the stock is viewed as an attractive entry at current levels.
Recommendation: UMS Integration is a BUY.
CSE Global – BUY
Overview: CSE Global (CSE) continues to build momentum with healthy revenue growth supported by strong order wins across all segments. Although 4Q24 new order wins were slightly lower year‐on‐on, the quarterly performance improved significantly, and the company’s order book remains robust.
Strategic Moves: The divestment of its US industrial property – aimed at unlocking capital for a larger facility acquisition – signals a strong growth strategy. CSE is well positioned in the electrification business and is exploring expansion opportunities in renewables, energy storage, and data centres in key markets including the US and Australia & New Zealand.
Valuation: With a target price of S\$0.61 based on an 11x 2025F PE—a reflection of its long-term historical mean—the valuation is considered attractive given its strong growth prospects.
Recommendation: CSE Global is maintained as a BUY.
Riverstone Holdings – BUY
Overview: Riverstone Holdings (RSTON) posted robust results in 2024 with net profit rising 30% year‐on‐year to RM287 million and revenue increasing by 17% to RM1.1 billion. The cleanroom segment benefited from the recovery in the semiconductor industry while the healthcare segment saw normalization post-pandemic.
Dividend and Financials: The company declared a special interim dividend of 4.0 sen and a final dividend of 8.0 sen, resulting in a total dividend of 24.0 sen for 2024. With a payout ratio of 124% and a dividend yield of 7.3%, coupled with a strong cash balance of S\$715 million (approximately 87.5% of market cap), the dividend policy is expected to remain robust in the coming years.
Growth Catalysts: Production efficiency is being boosted through the replacement of ageing production lines with more efficient, single production lines – enabling a gradual shift towards higher-value, customized products.
Valuation and Target: With a PE-based target price set at S\$1.16, pegged to a 20x 2025F PE (1.5 standard deviations above its historical mean), Riverstone presents the most attractive valuation in its industry.
Recommendation: Riverstone Holdings is a BUY.
Marco Polo Marine – BUY
Overview: Marco Polo Marine (MPM) stands to benefit from favourable market conditions characterized by higher ship charter rates and constrained vessel supply. Global offshore support vessel utilisation remained at 73% in February 2025, with dayrates maintaining an upward trajectory after a 16% rise in 2024.
Ship Chartering and Shipyard Performance: New commissioning service operation vessels (CSOV) and crew transfer vessels (CTV) are expected to contribute significantly in 2HFY25, generating substantial additional revenues. Moreover, higher ship repair activity from a newly completed fourth dry dock supporting an 83% yard utilisation rate further enhances revenue prospects. There is also potential for a second CSOV in collaboration with a leading Norwegian vessel designer.
Valuation and Target: Valued at 9.5x FY25F PE, the target price is set at S\$0.072, making it an attractive pick given the rising charter rates and vessel utilisation improvements.
Recommendation: Marco Polo Marine is maintained as a BUY.
Oversea-Chinese Banking Corp (OCBC) – BUY
Overview: Oversea-Chinese Banking Corp (OCBC) boasts robust capital management and a comprehensive plan to return S\$2.5 billion of excess capital to shareholders over the next two years. The strategy involves special dividends amounting to 10% of net profit for 2024 and 2025, as well as share buyback programmes scheduled over 2025 and 2026.
Strategic Initiatives: OCBC is focused on delivering incremental revenue of S\$3 billion cumulatively (2023–2025) through initiatives spanning cross-border trade, Asian wealth, the new economy, and sustainable financing. With a fully phased-in CET-1 CAR of 15.3%—the highest amongst Singapore banks—the bank is well positioned to deploy surplus capital for further inorganic growth.
Valuation and Target: The target price is set at S\$21.10, based on a 2025F P/B multiple of 1.57x as derived from the Gordon Growth Model incorporating ROE of 12.5%, a COE of 8.5%, and a growth rate of 1.5%.
Recommendation: OCBC is recommended as a BUY.
Capitaland Integrated Commercial Trust (CICT) – BUY
Overview: Capitaland Integrated Commercial Trust (CICT) continues to display resilience in its core Singapore portfolio, with positive rental reversions of 8.8% for retail and 11.1% for office properties in 2024. Improvements at key properties such as ION Orchard and downtown malls benefiting from a tourism recovery further add to its strong fundamentals.
Development and Cost Management: Additionally, positive contributions are expected from AEI completions at the IMM Building and Gallileo. Management is also evaluating enhancements at Plaza Singapura and The Atrium at Dhoby Ghaut MRT station. Cost of debt remains stable at 3.6% and is expected to stay below 4% in 2025.
Valuation and Target: Using a dividend discount model with a cost of equity of 6.75% and a terminal growth of 2.2%, the target price is set at S\$2.37.
Recommendation: Capitaland Integrated Commercial Trust is maintained as a BUY.
Conclusion
This detailed analysis underscores the strategic attractiveness of each company within the Singapore market. UOB Kay Hian’s comprehensive review leverages robust earnings data, diverse dividend initiatives, and sound balance sheet fundamentals to identify attractive investment opportunities. Each recommendation – from property and maritime sectors to banking and industrials – underscores strong near-term catalysts and sound valuation metrics, making the overall Singapore portfolio a compelling proposition for investors looking to position themselves for 2025’s recovery and growth.
