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SHENG SIONG
SG60 voucher uplift largely priced in
- Downgrade to HOLD as share price has rallied above our TP, with SG60 vouchers tailwind largely priced in
- Remain positive on the Singapore supermarket sector, with SG60 vouchers underpinning an estimated 4% y/y industry growth in 2025
- Expect 2026 to be a standout year, with SG60 vouchers driving an estimated annualised sales uplift of about SGD500mn for the sector
- Our above-industry assumptions of 8% top-line growth and 10% earnings growth already factored in the benefits of SG60 vouchers
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BRC Asia (BRC SP)
FY25: Strong Earnings Supported By Construction Upcycle
Highlights
• BRC’s FY25 earnings exceeded our expectations. Core earnings of US$94m (+22% yoy) formed 108% of our FY25 forecast.
• BRC announced final and special dividends of 7 S cents each, bringing FY25 total dividend to 20 S cents (payout 58.2%; yield 4.9%).
• Orderbook remains strong at S$1.9b. Maintain BUY with a 5% higher target price of S$4.90.
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Strategy 1H26 Strategy: Fired Up For Outperformance
Highlights
• Malaysian equities are fired up for outperformance in 2026, fuelled primarily by pre-GE domestic liquidity, the ringgit’s appreciation, and a corporate earnings growth recovery.
• Externally, we foresee cooling tensions over global trade and geopolitics (amid a doveish US monetary policy).
• We introduce our end-26 FBMKLCI target of 1,760. The index could potentially peak at the 1,800 level before the market turns risk-off towards year-end, ahead of GE16 which we anticipate occurring in 2027.
• Strategy: Adopt a risk-on mode with a focus on various investment themes that heat up the power and building material sectors, followed by banking and plantation, and selected technology, consumer, property, and construction plays.
• Top picks: Fraser & Neave Holdings, Hong Leong Bank, Gamuda, Pekat Group, SD Guthrie, Press Metal Aluminium Holdings, Sunway Bhd and Tenaga Nasional.
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Softer retail pulse ahead
• We anticipate a subdued growth year for SG retail in 2026, at c.1.0%, aligning with inflation
• Positive boost from SG60 vouchers for essential trades like supermarkets and higher tourist spending at central malls, to be largely offset by reduced discretionary spending amid softer economic growth and anticipation of JB-SG RTS launch at year-end
• The year 2027 could present more challenges due to the absence of SG60 voucher stimulus and full-year impact of RTS, which could result in c.3%-4% annualised retail leakage
• Prefer DFI Retail as a consumer sector pick; CICT and LREIT among retail S-REITs
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LHN’s market cap stands at $286mln and currently trades at
7x forward PE and 1.1x PB, with a dividend yield of 6.0%. FY25
performance remains strong across the Coliwoo co-living segment,
as well as maiden contributions from its property development
business. Consensus target price stands at S$1.15, representing
71.6% upside from current share price. We maintain an
“Accumulate” rating on LHN.
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