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UOB KAYHIAN |
UOB KAYHIAN |
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Alpha Picks: Weathering A Hawkish October
Highlights • Our Oct 26 Alpha Picks underperformed the FSSTI by 2.2ppt, 1.4ppt and 0.4ppt on a price-weighted, market cap-weighted and equal-weighted basis respectively. • For Nov 26: Add YZJSGD; remove OCBC and KEP. • Nov 26 Alpha Picks: BKM, CICT, FEH, HUAGL, NTTDCR, OTEK, RSTON, SATS, UIBREIT, VALUE, VMS, and YZJSGD.
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Lendlease Global Commercial REIT (LREIT SP) 1QFY27: Retail Momentum Builds; Planning More AEIs
Highlights • LREIT delivered a strong retail performance in 1QFY27, with rental reversion of 10.0% and like-for-like tenant sales growth of 8.1% yoy. Occupancy at PLQ Mall temporarily dipped 2.3ppt qoq to 94% due to an ongoing AEI. • PLQ Mall’s enhancement is scheduled to complete by end-26 and Grange House’s opening by mid-27. PLQ Mall will provide a full 12-month contribution in FY27. Management will evaluate AEIs for 313@Somerset and Jem. • Management continues to pursue potential acquisitions in Singapore and the divestment of Building 3 in Milan. LREIT provides an attractive FY27 DPU yield of 6.6%. Maintain BUY. Target price: S$0.80.
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| LIM & TAN | LIM & TAN |
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Beng Kuang Marine / BKM (S$0.33, unchanged) reported a strong recovery in 3Q2026, with PATMI surging 174.6% YoY to S$4.24m, driven by higher-margin off shore lifecycle work and the full consolidation of Asian Sealand Off shore & Marine (ASOM). Revenue increased 10.1% YoY to S$28.6m, while gross profit margin (GPM) improved to 38.1%, up 2.1ppt YoY and sharply higher than the approximately 26% recorded in the preceding two quarters. Profit before tax (PBT) rose 15.1% YoY to S$5.20m. The improvement reflects stronger project execution, particularly in West Africa, where FPSO maintenance and life-extension activities progressed into higher-value work phases. BKM’s market capitalisati on stands at S$99.1mln, implying an annualised P/E of just 5.8x based on 3Q2026 PATMI of S$4.24mln (c.S$17mln on an annualised basis). Notably, 3Q2026 marks the first full quarter of ASOM’s earnings consolidation, providing a clearer indication of BKM’s underlying earnings potential. While results were largely in line with expectations, the recent share price sell-down suggests that investors remain sceptical of the group’s ability to sustain its earnings momentum despite the full consolidation of ASOM. We believe the current valuation appears undemanding, with further earnings delivery and margin stability potentially serving as catalysts for a re-rating. As such, we continue to maintain a BUY recommendation on BKM.
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A robust private home launch pipeline in 2027 could create more opportunities for higher new private home sales, benefiti ng property agencies like PropNex and APAC Realty. New home sales have historically been more profitable for property agencies compared to resale transactions due to differences in the commission structure. The huge supply of new private homes in 2027 comes on the back of a smaller launch pipeline in 2026, which may compress profits for property agencies this year. Both counters remain well-supported by a robust net-cash position and attractive dividend yields. APAC Realty is capitalized at $196mln and trades at 10.7x forward P/E and 1.2x P/B, with a dividend yield of 8.4% (excluding one-off special divs of 3.6cts). Consensus TP of $0.73 represents a 59% potential upside. PropNex is capitalized at $1.2bln and trades at 17.2x forward P/E and 9.9x P/B, with a dividend yield of 5.8%. Consensus TP of $2.15 represents a 30% potential upside. |
| MAYBANK SECURITIES | MAYBANK SECURITIES |
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Addvalue Technologies (ADDV SP) Brace for re-ignition
50% correction represents attractive opportunity We expect Addvalue to show strong both top-line and NPAT growth in 1HFY27 when it reports results around mid-November, reflected by much improved net margins amid a strong order book and as operating leverage kicks in. We believe the current broad-based correction in Singapore’s small caps (SMIDs) presents a good opportunity to accumulate Addvalue. We remain confident in its outlook in the booming space industry with its current order book of USD20.2m. Retain BUY with an unchanged SGD0.34 TP, pegged to 30x FY27E price-to-sales ratio.
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Sheng Siong Group (SSG SP) Steady growth but less supportive tailwinds
3Q growth eased, but 9M delivery remained steady Revenue rose 6.2% YoY to SGD441.5m in 3Q, slowing from 13.0% growth in 1Q and 12.0% in 2Q, partly against a tougher voucher-supported base. For 9M26, revenue grew 9.9% to SGD1.30b, with new and comparable-new stores contributing 9.5ppt to growth and same-store sales adding 1.9ppt. In 3Q, same-store sales declined 0.5%. Gross margin improved 0.7ppt to 32.2%, but net profit growth slowed to 1.8% as operating costs rose. We trim our 2026E–28E NPAT by 0.3–1.4% and lower our TP by 12% to SGD2.85.
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