Maybank Research: Optimism Abounds as Singapore Retail Giants Reshape the Landscape
March 25, 2025
DFI Retail Group Streamlines with \$125M Singapore Supermarket Sale
Maybank Research Pte Ltd has some positive news to share regarding DFI Retail Group’s strategic move to sell its Cold Storage and Giant supermarket chains in Singapore. The \$125 million deal with Malaysian company Macrovalue includes 48 Cold Storage stores, 41 Giant stores, and two distribution centers.
DFI Retail Group’s CEO, Scott Price, believes the sale will allow the company to focus on its Guardian and 7-Eleven businesses while positioning the Singapore Food business for growth under Macrovalue’s expanded scale and procurement power. Investors have responded positively, with DFI shares rising 5.33% to $2.37 following the announcement.
ESR-REIT Divests Properties, Strengthens Balance Sheet
In another notable transaction, ESR-REIT (EREIT) has completed the divestment of 1 Third Lok Yang Road and 4 Fourth Lok Yang Road for SGD6.8 million, a 3.5% premium over the SGD6.6 million valuation. The proceeds will be used to repay borrowings, finance acquisitions, enhancements, redevelopments, or fund working capital.
The divestment is not expected to materially impact EREIT’s net asset value or distribution per unit for FY 2025. After the sale, EREIT now holds 71 properties across Singapore, Japan, and Australia.
Yangzijiang Shipbuilding Bolsters Presence with Tsuneishi Acquisition
Yangzijiang Shipbuilding has completed a capital injection for a 34% equity stake in Tsuneishi Group (Zhoushan) Shipbuilding (TZS), making it a 34% owned associate. The acquisition, announced in September 2024, involved a purchase consideration of RMB833.1 million (\$153.62 million), paid in cash from Yangzijiang’s internal resources.
According to Chairman and CEO Ren Letian, the deal will enhance both companies’ strengths in research and development, shipbuilding, and supply chains. Yangzijiang’s shares closed 2.834% lower at $2.40 on March 24.
Q&M Dental Resolves Disputes, Expands AI Solutions
In other news, Q&M Dental Group announced a settlement agreement with Dr. Ong Siew Hwa, CEO of Acumen Diagnostics, resolving all disputes with no admission of liability. This follows Dr. Ong’s leave of absence in June 2024 after acquiring an indirect interest in a supplier’s assets. Ong has also resigned from her position as executive director of Aoxin Q&M.
Additionally, Q&M’s 49%-owned associate, EM2AI, signed a binding agreement with a dental solutions provider to integrate its AI solutions into the provider’s platform across clinics in Singapore, Malaysia, Thailand, and Vietnam. Q&M shares rose 3.45% to 30 cents following the announcement.
Top Equity Ideas
ISOTeam – Confidence Boost as CEO Buys Shares
With an ongoing construction upcycle and a strong orderbook, coupled with the CEO’s recent share purchases, Maybank Research believes the outlook is brighter for ISOTeam. The analysts have lifted their FY26-27E PATMI forecasts by 8.0% and 11.5%, respectively, which has resulted in a revised target price of SGD0.104, pegged to a 9x blended FY25/26E P/E.
ST Engineering – Investor Day Takeaways
ST Engineering has set high single-digit top-line and low-to-mid-teen bottom-line growth targets for the next five years. Defense, digital businesses, and smart city projects are expected to anchor this growth, while efficiency improvements will drive bottom-line expansion. From 2026 onwards, ST Engineering will pay out a third of earnings growth as incremental dividends, with surplus cash being reinvested or used to enhance balance sheet flexibility. The visibility of earnings and dividend growth, coupled with the strong thematic of defense spending, keeps Maybank Research’s BUY recommendation in place.
