Maybank Research Pte Ltd
16 April 2025
Market Shaping News and Updates
The latest market updates indicate several key developments across various sectors, including significant moves in the tech, aviation, and logistics industries. Here’s a comprehensive overview:
Grab’s Strategic Acquisition and Its Implications
Grab’s GXS Bank has acquired Validus Capital in an all-cash deal valued at USD25-40m. This acquisition aims to expand small and medium-sized enterprise (SME) financing in Singapore. The move is expected to boost GXS’s reach to larger SMEs and expand its clientele. Meanwhile, Grab remains insulated from US tariffs with no direct exposure, and its budget-friendly services like GrabHitch and SharedSaver make it a top defensive pick amid tariff turbulence.
SATS’ New Cargo Handling Contract
SATS’ wholly-owned subsidiary, Worldwide Flight Services (WFS), has secured a new five-year cargo handling contract with Emirates SkyCargo at Frankfurt Airport. This agreement enhances collaboration between SATS and WFS with Emirates, now providing gateway services at 21 stations across the airline’s global network. Frankfurt Airport, one of Europe’s busiest cargo hubs, offers a weekly cargo capacity of over 1,400 tonnes.
Lum Chang’s Contract Win
Lum Chang’s subsidiary has secured a contract worth SGD29.14m for additions and alterations to an existing four-storey commercial development at 291 New Bridge Road. The contract, awarded by Shaw Brothers to Lum Chang Interior, includes design, retrofitting, and building works for the mall, retail units, carpark, and cinema. The project is set to commence in April 2025, with revenue recognition to be progressive.
SIA Group’s Passenger Traffic and Load Factor Update
SIA Group’s passenger traffic declined by 0.8% YoY in March, with passenger capacity rising by 2.7% YoY. The group’s passenger load factor (PLF) came in at 84.7%, down 3 ppts YoY, with SIA and Scoot posting monthly PLFs of 84.1% and 87.2%, respectively. The two airlines carried a combined total of 3.3m passengers, 0.8% higher YoY. Cargo carriage increased by 7.6% YoY, driven by some front-loading in anticipation of uncertainty in the global trade environment.
Top Equity Ideas and Sector Outlook
Singapore Banks – In to the Storm
The central doctrine of US tariffs poses risks of weaker global growth and disruptions to North-South supply chain relocations, potentially increasing asset quality risks for banks. Operational downgrades are likely as credit demand and margins shrink, and capital returns may slow as balance sheets are preserved. With limited catalysts, DBS, UOB, and OCBC are downgraded to HOLD.
ComfortDelGro – A Shelter from the Tariff Storm
LTA awarded a street-hail service operator licence to GrabCab, valid for 10 years. While competition is expected to increase, the impact might be muted as street hailing volumes have declined and account for only 10-11% of total P2P trips. No change to FY25-27 forecasts, with a compelling 6% yield, retaining BUY with a TP of SGD1.64.
Disclaimer and Disclosures
This research report is prepared for general circulation and information purposes only and should not be considered or intended as an offer to sell or a solicitation of an offer to buy securities. Investors should note that values of securities may fluctuate, and prices may rise or fall. Opinions or recommendations are in the form of technical ratings and fundamental ratings.
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about subject securities or issuers. No part of the research analyst’s compensation was directly or indirectly related to specific recommendations or views expressed in the report.
Company Analysis and Ratings
Definition of Ratings
Maybank IBG Research uses the following rating system:
BUY: Return expected to be above 10% in the next 12 months (including dividends).
HOLD: Return expected to be between 0% to 10% in the next 12 months (including dividends).
SELL: Return expected to be below 0% in the next 12 months (including dividends).
Legal Entities Disclosures
Malaysia: Issued and distributed by Maybank Investment Bank Berhad.
Singapore: Distributed by Maybank Research Pte. Ltd., regulated by the Monetary Authority of Singapore.
Thailand: MST (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and regulated by the Ministry of Finance and the Securities and Exchange Commission.
Market Insights and Recommendations
Grab and GXS Bank
Grab’s strategic acquisition of Validus Capital for USD25-40m aims to enhance SME financing. With no direct exposure to US tariffs, Grab remains a defensive pick.
SATS and WFS
SATS’ subsidiary WFS secured a five-year cargo handling contract with Emirates SkyCargo, serving as a critical gateway in Emirates’ European network.
Lum Chang
Lum Chang’s subsidiary secured a SGD29.14m contract for commercial development at 291 New Bridge Road, expected to commence in April 2025.
SIA Group
SIA Group’s passenger traffic declined by 0.8% YoY in March, with a 2.7% YoY rise in passenger capacity. The cargo load factor dropped by 3.1 ppts to 56.9%.
Conclusion and Recommendations
Given the current market conditions and updates, investors are advised to consider the ratings and analyses provided for each company. With various sectors experiencing shifts, staying updated on market trends and company performances is crucial.
