ANALYSTS SAY: Buy, Sell, Hold (28 Aug)

UOB KAYHIAN

UOB KAYHIAN

Seatrium (STM SP)

Arbitration Afoot But Strengthens Orderbook With New Projects

STM faces arbitration from KEP over a S$68.4m claim tied to Brazil’s Operation Car Wash, after reversing an earlier S$82.4m provision when its indemnity expired in Feb 25. On a positive note, August has been a successful month for STM with over S$300m of contracts won for powerships, FSRUs and an FLNG vessel. With an S$18.6b orderbook and S$30b pipeline, STM remains well-positioned in offshore, renewables and energy transition projects. Maintain BUY. Target price: S$2.96.

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Meituan (3690 HK)

2Q25: Earnings Miss; Subdued Margin Outlook In 3Q25 Amid Intense Competition

Meituan’s 2Q25 earnings missed expectations. Total revenue grew 12% yoy to Rmb91.8b, 2-4% below our and consensus estimates. Non-IFRS net profit slumped 89% yoy to Rmb1.5b, with net margin shrinking 15ppt yoy to 2%, missing consensus estimate. For 2H25, we are cautious on Meituan and expect to see margin pressure stemming from intense competition in the FD business. Downgrade to SELL with a lower target price of HK$100.00. 

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UOB KAYHIAN

DBS GROUP RESEARCH

Ping An Insurance Group (2318 HK)

1H25: OPAT And NBV Growth Within Expectations

Ping An’s OPAT grew 3.7% yoy in 1H25, broadly in line with our expectations, mainly driven by a strong CoR performance in the P&C segment and recovery of the asset management business after de-risking, partly offset by the sluggish earnings performance in PAB. NBV growth accelerated to 40% yoy, thanks to a recovery in FYP growth in 2Q25 and continued margin expansion. Management remains optimistic about OPAT and NBV momentum continuing into 2H25. Maintain BUY. Target price: HK$69.00.

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Food Empire Holdings

Strong brew with strategic blend

• Turbocharged growth in Vietnam’s instant coffee and coffee ingredients space

• Despite geopolitical risks, the East Europe segments is highly profitable and cash generative

• Ikhlas’ investment strengthens credibility, provides access to a valuable growth network, and anchors valuation

• SOTP fair value estimated at SGD2.35 to SGD3.01, with SGD2.68 as mid-point.

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Hong Leong Bank (HLBK MK)

FY25 results within expectations

BUY maintained

HL Bank’s FY25 results were within expectations and positively, the group’s dividend payout ratio has risen to 46% from 33% in FY24. Our forecasts are maintained, but we have raised our payout ratio assumption to 46% as well. The higher dividend payout now positions HL Bank closer to its banking peers, lifting its dividend yield >5%. We maintain our TP of MYR22.80 (CY25 PBV: 1.2x. COE: 10.3%. R0E: 11.2%, LT growth: 4%). We continue to like HL Bank for its strong asset quality, liquid balance sheet and management’s proactive stance in driving faster domestic growth.

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Bumitama Agri Ltd (BAL SP)

Key Highlights

• Strong Share Price Rally: BAL’s share price surged 33% since 12 Aug 2025, closing at SGD 1.12 on 26 Aug, exceeding its prior fair value (FV).

• Fair Value Raised: FV estimate increased from SGD 1.05 → SGD 1.20, driven by a higher target P/E multiple (9.2x vs. 8.1x), reflecting management’s stronger dividend commitment.

• Rating Downgrade: Despite fundamentals being positive, recommendation is downgraded to HOLD as the stock is already near FV, limiting upside.

📊 Financial & Returns Outlook

• Dividend Strength: Interim dividend of 3.63 cents/share (over 3x higher than 1H24), aligned with revised 40–60% payout policy.

• Valuation: Still attractive, trading at ~6% forward dividend yield with double-digit ROE.

• Total Return Appeal: While price upside is capped, BAL remains compelling when including dividends.

🌱 ESG & Sustainability

• Carbon Footprint: Reduced GHG emissions intensity by 18% (vs. 2016 baseline); on track for 30% cut by 2030.

• Methane Capture: 1 facility installed, 3 more planned; also testing composting and biochar programs.

• Certification: RSPO full certification target pushed to 2027.

• Fire Incidents: 89 fires in concessions in 2024 (down from 151 in 2023).

• Community Development:

  • Social Forestry scheme supports locals without land expansion.

  • 43 Bumitama Schools serving 4,000+ students.

  • No legal non-compliance in 2023.

📝 Conclusion

• BAL continues to deliver strong earnings, dividends, and ESG progress.

• However, with the share price already close to revised FV, upside is limited → HOLD rating maintained, though it remains attractive for total returns via dividends.