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Navigating Singapore – Liquidity premium
◼ We remain positive on the Singapore market in 2026F, supported by the liquidity wave from MAS's further allocation of EQDP funds. Valuation re-rating should be sustained by continued market earnings growth (+8.5% yoy) while the focus on ROE and driving shareholder returns amid a low interest rate environment should continue to attract investor interest into the market.
◼ Our 3 themes for 2026F are i) EQDP liquidity beneficiaries, ii) M&A or restructuring plays and iii) mispriced or overlooked laggards (dark horses).
◼ Our big cap top picks are BAL, CLAR, DFI, FR, iFAST, KEP, LREIT, SATS, SIE and YZJSGD, while our small cap picks are BRC, CSE, SANLI and SOIL. Our 2026F SIMSCI target of 480 pts is pegged to 20x forward P/E multiple.
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Offshore & Marine
A Rush Of Offshore Capex In 4Q25
Highlights
• Three major offshore oil projects hit FID in 4Q25 with STM winning one FPU contract.
• In the small-/mid-cap space, ASL and MPM reported a strong earnings momentum amid rising charter rates and expanding orderbooks.
• Top picks in the sector remain STM and MPM. Maintain OVERWEIGHT on the sector.
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Plover Bay Technologies (1523 HK)
2025 Preview: Decent Growth Momentum Across All Regions
Highlights
• We held a pre-blackout call with Plover Bay. In 2H25, growth momentum continued across all markets and management saw growing demand from new verticals.
• Plover Bay has seen enhanced brand awareness for its Peplink routers since its collaboration with Starlink in Jan 24, and will continue to complement its Peplink ecosystem.
• Maintain BUY with a lower target price of HK$7.60 as we roll over our estimates to 2026.
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AIRPORTS OF THAILAND
Cleared for take-off
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New duty-free contract term mitigates uncertainties; new terms have no major difference from market expectation
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THB390 PSC hike for international pack more positive than expected; to be a key earnings driver over FY26/27F
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Raise earnings by 7%/9% in FY26/27F on new duty-free contract terms and PSC rates
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Upgrade to BUY with a higher DCF-based TP of THB60.00
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LHN Ltd – Steeper growth ahead
- 2H25 earnings were above expectations. FY25 revenue/PATMI were 100%/109% of our forecasts. Growth was driven by a jump in co-living earnings. Final and special dividend totalling 3 cents was announced (FY24: 2 cents).
- The expansion of rooms for Coliwoo remains robust. There are 714 rooms under renovation, with another estimated 1,500 rooms planned. The pipeline is equivalent to a 75% growth from the current 2,933 rooms. Opportunities are wide-ranging, including hotel licenses, student accommodation, commercial buildings, and management contracts. The target is to expand room count by 800 per year (~27% CAGR).
- We maintain our BUY recommendation. With the listing of Coliwoo, our valuation of LHN is now based on a sum-of-parts basis (prev. 13 P/E ratio). We value Coliwoo on a mark-to-market basis with a 10% discount, property development at book value and the rest of the business at 10x PE. Our target price is lowered from S$1.13 to S$0.85.
Post Coliwoo listing and a stronger balance sheet, we expect LHN to pay a higher dividend yield and to deploy capital into new areas of growth, namely storage space and facilities management businesses. Valuations remain attractive at a dividend yield of almost 6% and an adjusted price-to-book ratio of 0.9x.
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Reflections 2025
Amidst extreme uncertainty, S’pore offered certainty 2025 brought about extreme uncertainty. Singapore navigated this whilst offering a premium on certainty. The STI is +20% higher YTD. There was increased certainty to ROEs. This was partly due to efficiencies from deploying AI - especially in banks, financials and healthcare. An additional layer of certainty came from policy delivery, resulting in equity market reforms and priority setting for transport, fiscal stimulus, infrastructure development, etc. These should support earnings upgrades in consumer, REITs, SMIDs & transport. Finally, rational competition has increased margin certainty in internet and telcos. Winning stocks: CICT, CD, CSE, GRAB, MLT, OCBC, SGX, SSG, ST.
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