Lim & Tan Securities: Top Stock Picks for 2025, Market Analysis & Investment Insights

Lim & Tan Securities Pte Ltd

4/21/2025

LTS Portfolio 2025 Recommendations: An In-Depth Analysis of Singaporean Equities

This report provides an in-depth analysis of Lim & Tan Securities Pte Ltd’s (LTS) stock picks for 2025, offering insights into their investment theses, valuations, and potential upside. The analysis spans across various sectors, including REITs, technology, and conglomerates, providing a comprehensive overview of the Singaporean equity market.

Event Schedule [[2]]

• 6.00pm: Research Team of Lim & Tan Securities Pte Ltd
• 7.00pm: China Aviation Oil – Presenters: Mr. Wang JiaLei, Mr. Yim Jeng Yuh
• 7.20pm: Innotek Ltd – Presenters: Mr. Neal Manilal Chandaria, Ms. Angeline Tan
• 7.40pm: Centurion Corp – Presenters: Mr. Kong Chee Min, Mr. Ho Lip Chin, Mr. David Phey
• 8.00pm: Combined Question and Answer Session
• 8.30pm: Networking Session & Refreshments

LTS Stock Picks for 2025 [[4, 137]]

The following table summarizes LTS’s stock recommendations for 2025, including price targets and potential upside.

* 7.6% yield if include the capital return of 60 cents

Portfolio Performance [[4, 9, 10, 11]]

• Portfolio 16 (12-Nov-24 to 14-April-25): +8.3% Alpha
• Portfolio 16 – Small Caps: (+5.4% Alpha)
• Portfolio 16: Big Cap Portfolio (+9.4% Alpha)
• Our last 6 portfolios outperformed the market on average by 3.2 percentage points (* delistings)

Global and Singapore Banks [[12]]

DBS Group Holdings Ltd

• DBS is a leading financial services group in Asia with a presence in 19 markets.
• Investment Thesis:
  • \$3/share returns for FY2025 (\$2.40 normal quarterly dividends plus \$0.60 return of excess capital)
  • \$3bln share buyback program to support share price.
  • Management guided for return of excess capital in FY2026 & FY2027.
• Valuations:
  • Market Cap: \$112bln
  • Price Close: \$39.50 (Target Price = \$46.30)
  • P/B Ratio: 1.6x
  • Forward P/E Ratio: 10x
  • Dividend Yield: 7.6% (\$3/share)
  • Net Gearing: 25.3%
  • 52 week low/high: \$32.22 / \$46.97
  • Major Shareholder: Temasek (29%)

Management Guidance and Financials [[13, 14, 15, 16, 17]]

• Management is guiding for stable performance. [[13]]
• DBS has strong allowance coverages. [[14]]
• DBS is guiding for steady FY2025 performance. [[15]]
• DBS indicated that FY25 normal quarterly dividend base of 60cts + excess capital return of 15cts / Qtr [[16]]
• \$3bln Share Buy Back Program [[17]]

Attractive Yields with Decent Capital Upside [[18]]

Global Banking Sector Comparisons [[19]]

The following table compares DBS, OCBC, and UOB with other global banks.

*Based on \$2.40 forecasted yield for FY25

** Based on \$0.85 historical dividend payout for FY24

*** Based on \$1.80 historical dividend payout for FY24

UOB Technical Support [[21]]

• UOB technical support is around \$30.

Attractiveness of the Singapore Market [[23]]

• Average Delisting PE 21x, P/B 1.6x, EV/EBITDA 17.3x, Premium 51% – Indicates Mkt Undervaluation

Singapore Post [[24]]

• SingPost provides logistics services in the domestic and international markets, warehousing and fulfillment, and global delivery services.
• Investment Thesis:
  • Sale of other Non-core assets following the likes of Keppel/Singtel post strategic review
  • Distribution of dividends post sale of Australian business as catalyst for share price. Price is now lower than when it divested
  • SOTP valuations of \$0.63 after 20% conglomerate discount
• Valuations:
  • Market Cap: \$1.1bln
  • Price Close: \$0.52 (Target Price = \$0.75)
  • P/B Ratio: 1.0x
  • Forward P/E Ratio: 14.2
  • Dividend Yield: 2.0%
  • Net Gearing: 25.3%
  • 52 week low/high: \$0.40 / \$0.63
  • Major Shareholder: Temasek 22%, Alibaba 12%

Stable Performance from SPC [[29]]

• Stable performance is expected from SPC.

Stock Trading Near Lows [[30]]

• The stock is trading near its lows.

LHN LTD [[31]]

• LHN Limited is a real estate management services group with expertise in space optimization.
• Investment Merits:
  1. Coliwoo – co-living market leader
  2. Entry into healthcare accommodation
  3. Cheap valuations, dividend yield
• Key Statistics:
  • Market Cap: S\$192mln
  • Price Close: S\$0.45 (Target Price = S\$0.56)
  • P/B Ratio: 0.7x
  • P/E Ratio: 5.5x
  • Dividend Yield: 6.7%
  • Net Gearing: 40%
  • 52 week low/high: S\$0.30/S\$0.54
  • Major Shareholder(s):
    • Kelvin Lim / Jess Lim (55%)

Coliving Market Leader [[32]]

• LHN is a coliving market leader with 34% market share.

Adopting Asset Light Strategy [[34]]

• LHN is adopting an asset-light strategy.

P/B Ratio Below Mean [[36]]

• P/B ratio of 0.7x is below the mean of 0.9x.

YZJ Shipbuilding [[37]]

• Yangzijiang Shipbuilding is a large enterprise group with shipbuilding and marine engineering manufacturing as its main business.
• Investment Thesis:
  • Oversold at current levels due to proposed port fees on Chinese vessels entering US
  • Orderbook at record high (US\$24.4bln) and continues to grow
  • Shining operating metrics backed by net cash equivalent to 50% of market cap
• Valuations:
  • Market Cap: \$8.1bln
  • Share Price: \$2.06 (TP \$3.28, +59.2 % upside)
  • P/B Ratio: 1.6x
  • Forward P/E Ratio: 6.2x
  • Dividend Yield: 6%
  • Net Gearing: Net Cash (c.47% of market cap)
  • 52 week low/high: \$1.69/\$3.32
  • Major Shareholder: Ren Yuanlin (21.6%)

YZJSB Share Price [[39]]

• YZJSB share price analysis with target prices from various firms.

All Metrics Shining [[40]]

• Revenue, GP, PATMI, margins have been consistently growing.
• Dividends, Payout, ROE also grew.
• Gross profit expansion driven by economies of scale, higher contract pricing, favourable exchange rates, and lower raw material costs.
• Underinvestment during Covid-19 has led to shipyard boom.

Consensus All Buy Ex.JPM [[44]]

• Consensus is all buy except for JPM.

YZJ SB Peers [[45]]

Summary of YZJ Shipbuilding Financials [[46]]

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4
5

Keppel Ltd [[47]]

6

• 7
  • Keppel Ltd is a global asset manager and operator with strong expertise in sustainability-related solutions.

8

• • Investment Thesis:
    9
    • 0
      • Continued strong growth in recurring income from the Fund segment across all segments

    1

    • • China’s stimulus + lower interest rates to drive alpha in Real estate and funds

    2

    • • Strong yield while waiting for Keppel transformation to unfold via monetization and FUM increment

    3

    4

5

• • Valuations:
    6
    • 7
      • Market Cap: \$10.8bln

    8

    • • Share Price: S\$6.19 (TP: \$8.26, 33.4% upside )

    9

    • • Forward P/E Ratio: 11.4x

    0

    • • Dividend Yield: 5.5%

    1

    • • Net Gearing: 0.9x

    2

    • • 52 week low/high: \$5.61/\$7.15

    3

    • • Major Shareholder: Temasek (20.92%)

    4

    5

6

7
8

Growing Recurring Income [[48]]

9

• 0
  • Keppel is now the 3rd largest infrastructure AM globally.

1

• • Strategy to transform into Asset-light business and increased FUM for sustainable recurring income across its 3 operating segments.

2

• • Target \$200bln FUM by 2030 driven by strong organic growth initiatives, co-investment, M&A.

3

• • Currently has \$25bln dry powder and \$27b deal flow pipeline.

4

5
6

Infrastructure [[50, 51]]

7

• 8
  • Infrastructure is separated into Integrated power businesses and sustainability solutions

9

• • Driven by electrification – This is the biggest driver of earnings with Keppel
    0providing \$5.2b of solutions & services to be delivered over 10-15 years,
    1building up steady cashflows. Earning split into 42% waste/water, 50%
    2energy and 8% technology solutions

3

• • 60% of contracted capacity is signed for >3 years

4

• Keppel’s strategy to grow recurring income is split into a few simple steps
  5
  1. 6
     1. Invest into asset

  7

  1. 1. Operate asset for recurring income and
        8improve on it

  9

  1. 1. Recycle assets and invest elsewhere

  0

  1

2
3

Real Estate [[52, 53]]

4

• 5
  • Strategy: Have sold S\$3bln worth of landbank and booked >S\$1bln in profits last few years. Brought back the funds (S\$5bln) and is currently derisking from China.

6

• • Lower interest rates will boost the real estate sector with both higher earnings and valuations and China landbank to be slowly sold through the years

7

• • New China Playbook: looking to provide Real Estate-as-a-service (i.e. sustainability, master planning), but will need sometime to realize

8

9
0

Vision 2030 [[55]]

1

• 2
  • Monetization slowed in 2023, as pre-warned. Keppel will look to re-accelerate monetization and is likely to have focus on Singapore and Vietnam for now

3

• • Key part of growth strategy and goal is to monetize providing pricing is correct

4

• Keppel’s legacy rigs is worth c.\$4.4bln (\$2.50/share) and Keppel has taken full control, and will “focus