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UOB KAYHIAN |
UOB KAYHIAN |
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Banking 3Q26 Results Preview: NIM Bottoming, While Net Interest Income Turns Around
Highlights • We expect 3Q26 to be characterised by stabilisation of NIM and resilient loan growth, which enable banks to record growth in net interest income. Growth from wealth management has moderated but maintains its uptrend. Asset quality remains stable. Credit costs are projected at the lower end of guidance. We expect a net profit of S$3,079m for DBS (flat yoy, -4% qoq) and S$2,054m for OCBC (+4% yoy, -8% qoq). • Maintain MARKET WEIGHT. Our preferred stock pick is OCBC (BUY/Target: S$35.70) given its strategic shift to accelerate growth. OCBC is more sensitive to growth in wealth management fees, which accounted for 63% of its fee income. We also like DBS (BUY/Target: S$83.60) due to its leadership in wealth management and attractive 2027 dividend yield of 4.7%.
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Automobile China Auto Sector Weekly
Highlights • China and the EU have agreed on a hybrid export quota. China will cut the export VAT rebate on EVs to 9% from 13% from 1 Apr 27. BYD and Geely can navigate these measures by producing overseas. • Lithium carbonate prices are weaker than expected; downgrade Ganfeng Lithium from BUY to HOLD. • RoboSense’s 3Q26 LiDAR sales volume rose 221% yoy and 53% qoq, in line. However, its 3Q26 bottom line was dragged by the product recall. • Maintain MARKET WEIGHT. Top BUYs: BYD, Geely, and CATL. Top SELLs: Li Auto, and XPeng.
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| LIM & TAN | LIM & TAN |
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ParkwayLife REIT (S$4.00, up 1 cent) one of Asia’s largest listed healthcare REITs, announced that the relevant wholly owned subsidiaries of PLife REIT have entered into a promise of sale on 13 October 2026 to acquire three nursing home properti es in France from the DomusVi Group for an aggregate purchase price of €38.8 million (approximately S$56.5 million) Parkway Life REIT’s market cap stands at S$2.6bln and currently trades at 20x PE and 1.6x PB, with a dividend yield of 4.4%. Consensus target price stands at S$4.75, representing 18.8% upside from current share price. We remain positive on Parkway Life REIT, supported by its defensive healthcare portfolio, stable and recurring rental income, and continued overseas expansion, which should support sustainable DPU growth over the medium to long term. We thus maintain our “Accumulate” rating on PLife REIT.
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AIMS APAC REIT / AA REIT ($1.39, down 2 cts) is pleased to report a 4.9% year-on-year (“YoY”) growth in Distributi ons to Unitholders to S$40.5 million and 4.0% rise in Distributi on per Unit (“DPU”) to 4.908 Singapore cents for the half year ended 30 September 2026 (“1H FY2027”). At AA REIT’s last trade price of $1.39, its market cap is $1.1bln and trades at 1.1x P/B with a dividend yield of 7.5%. Bloomberg consensus target price of $1.63 implies a 17.3% potenti al upside. AA REIT delivered a resilient set of 1HFY27 results with growth in topline and DPUs, driven by AEI completi on, acquisiti ons and a slight drop in fi nance costs. Given the resilient fundamentals and good yield, we have an “Accumulate” rati ng on AA REIT. |
| MAYBANK SECURITIES | MAYBANK SECURITIES |
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Singapore Banks Fallen enough?
Despite recent weakness, we remain POSITIVE Banks are down 5% in the past 6 weeks. Margin squeeze from higher rates, and rising bond yields causing mark-to-market losses on debt holdings are fears at play. Our simulations show the impact from higher yields is manageable. Record loans, plus a track record showing asset yields price up quickly during rates hikes, should support earnings. Hence, we believe risks are low for guidance downgrades. Technicals also indicate broader uptrends are intact for the sector. Short-term noise aside, we remain POSITIVE for long-term investors: OCBC top pick; DBS top technical pick.
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Grab Holdings (GRAB US) 3Q26 resilience, but catalysts fade in 4Q26
3Q26E: resilient growth despite FX headwind We forecast 3Q26 revenue of USD1.10b (+26% YoY), 3% above Street estimates, & adj EBITDA of USD199m (+47% YoY), 4% ahead of consensus. GMV should grow 18% YoY to USD6.83b despite a 3–4ppt FX headwind. Deliveries GMV should rise 20% YoY, supported by Thailand and non-food categories, while Mobility GMV growth moderates to 15% YoY. Financial Services revenue could double YoY to USD182m, aided by Stash acquisition, with segment EBITDA approaching breakeven. Overall, momentum remains resilient, although underlying growth trends warrant closer attention.
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