ANALYSTS SAY: Buy, Sell, Hold (5 June)

CGS INTERNATIONAL

Pan-United Corp Ltd

Margins & net cash position well protected

■ We believe PAN’s margins are intact as most of its customer contracts are on variable/indexed prices, vs. peers who have more fixed-priced contracts.

■ PAN’s net cash of S$93m as at end-FY26F should support our 60% payout ratio forecast (FY25: 62%), translating to 50% yoy DPS growth in FY26F.

■ Reiterate Add on PAN’s strong positioning to capture construction tailwinds.

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KSH Holdings’ FY26 numbers delivered a strong turnaround
towards profitability, reporting S$6.8mln in net profits versus
a loss of S$5.9mln the year before. Excluding one-off fair
value losses and withholding tax provisions, core earnings
of S$16.2mln represent 94% of our full year forecast. Order
book has quadrupled yoy to $965mln, providing four years of
revenue visibility. The company is working on several tenders
to further increase its order book.

FY27F is likely to be a better year with the company firing on both construction and property development earnings. Backed by a positive outlook, management has increased final dividends to 1.0 S ct (FY25:
0.75 S cts), bringing full year dividends to 1.5 S cts (FY25: 1.25
S cts) and a 4.4% yield.

The value of Grand Bank Yachts / GBY ($0.72, up 3 cents) is driven by its brand equity, which is difficult to fully capture through conventional valuation metrics. As a result, earnings can appear volatile due to delivery timing, product mix and the sizeable CapEx cycle that has now largely been deployed, even though the underlying business remains strong.

Accordingly, we maintain our BUY recommendation on GBY with a target price of S$1.49, based on a blended 14.8x forward P/E, representing a 20% discount to listed yacht peers, which we believe appropriately reflects GBY’s smaller market cap, limited liquidity and the temporary earnings distortions arising from its ongoing expansion investments.

Strategy

Monthly Market Radar

Highlights

• The STI rose 2.5% mom to 5,037.86 in May, crossing the 5,000 level. The index also set a new all-time high on 19 May before easing in the final week of the month.

• Key events: Oil’s worst mom decline since COVID-19 on US-Iran ceasefire progress; SATS’ and SIA’s full-year results with record revenues.

• Key things to look out for: FOMC rate decision (17 June), CAREIT inclusion in FTSE EPRA Index (effective 22 June), NTTDCR maiden distribution (29 June), FIFA World Cup 2026 (11 June-19 July) historically associated with thinner trading volumes and softer market activity.

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Singapore REITs

Priced for Pain, Positioned for Recovery

• Macro road-bumps but S-REITs are in a stronger position to ride out stronger

• Quality earnings and resilience are traits that define outperformance.

• Interest costs remain at an inflection point with close to 85% of the managers, expecting a decline/stable rates in 2026 after a c.30 ppt drop y/y.

• Prefer Office > Industrial > Retail > Hotel

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