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CGS INTERNATIONAL |
UOB KAYHIAN |
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Tencent Likely solid 2Q26F results, with rising AI investment
■ Tencent is slated to release its 2Q26F results on 12 Aug 2026. ■ We forecast total revenue to rise 10.2% yoy to Rmb203.3bn in 2Q26F driven by the gaming and advertising businesses. ■ We also expect non-GAAP net profit to increase 6.4% yoy to Rmb67.1bn in 2Q26F, indicating a net profit margin of 33.0%. ■ In 2H26F, we expect TenCent to focus on trials of agentic AI within WeChat, the launch of an upgraded Hunyuan model, as well as AI-related capex and expense. ■ We reiterate our Add call with a DCF-based TP of HK$702.
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Strategy – SMID Cap Outlook SMID Cap Retail Webinar Takeaway: Focusing On Opportunities
Highlights • Held on 16 Jul 26, our SMID Cap retail webinar garnered interest from over 180 retail investors. • Key questions focused on buy opportunities amidst the recent broadbased weakness in the Singapore SMID-cap market and several large cap names • We highlighted BKM, OTEK, FEH & RSTON as our top SMID Cap picks.
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| LIM & TAN | LIM & TAN |
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Keppel DC REIT ($2.34, up 0.02) recorded DI of $150.7 million for 1H 2026, representing an 18.5% increase year-on-year. Growth was driven by contributions from the positive reversions and escalations secured in prior periods, as well as acquisitions of Tokyo Data Centre 3 and remaining interests in Keppel DC Singapore 3 & 4. This was partially offset by higher finance costs and the absence of income following the divestment of Kelsterbach Data Centre. Keppel DC REIT is capitalized at $5.7bln, dividend yield is 5%, price to book is 1.4x. Bloomberg consensus 1 year target price is $2.65, upside potential is 13.2%. We maintain an Accumulate rating on Keppel DC REIT given its exposure to the fast growing data-centre and AI sectors coupled with decent dividend yields.
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OUE REIT (S$0.365, unchanged) is pleased to report a strong set of results for the financial period 1 January 2026 to 30 June 2026 (“1H 2026”), with Distribution per Unit (“DPU”) rising 28.6% YoY to 1.26 Singapore cents. The improvement was driven by stronger hospitality performance, the income contribution from the acquisition of Salesforce Tower and significantly lower interest expenses resulting from effective capital management. OUE REIT’s market cap stands at S$2.0bln, and trades at 0.65x P/B with an annualized dividend yield of 6.9%. OUE REIT delivered a robust 1H26 with a 28.6% improvement in DPUs, benefitting from a decline in finance costs and an improving hospitality segment. It has started to see contributions from newly acquired Salesforce Tower since March, a commercial property located in Sydney, Australia. A potential sale of the sizable One Raffles Place may also allow the REIT to redeploy proceeds from lower yielding assets to higher yielding opportunities. Consensus TP of $0.44 represents a potential 18.9% upside. We maintain Accumulate on OUE REIT in view of its improving DPUs, value-unlocking efforts, low P/B and backed by an attractive yield. |
| UOB KAYHIAN | DBS GROUP RESEARCH |
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Zijin Gold International Co (2259 HK) Cost Edge Meets Earnings Inflection
Highlights • Pure-play global gold platform backed by Zijin Mining, with operations spanning nine countries and over 80% of its 100-tonne annual production target for 2030 supported by existing and acquired assets. • Initiate coverage with BUY driven by three core pillars: Supportive mediumterm gold outlook, synergies with parent group, and proven execution track record in turning around complex emerging-market mines. Target price of HK$144.33 pegged to 11.5x 2027F PE.
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Pan-United Corporation
Foundation behind Singapore’s skyline Investment Overview Dominant ready-mix concrete producer in Singapore. Pan-United Corporation is Singapore’s largest ready-mix concrete (RMC) producer with ~40% market share. The Group’s core business is anchored in supplying concrete solutions to the construction sector, supported by an extensive network of strategically located batching plants across Singapore, enabling efficient, just-in-time delivery.
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