ANALYSTS SAY: Buy, Sell, Hold (2 Dec)

DBS GROUP RESEARCH

LIM & TAN SECURITIES

Sectors/stocks to watch from the 3 economic themes in 2026

• We identify the sectors/stocks to watch on the 3 economic themes as follows: 
  
  
• #1) Watch two tech stocks (AEM Holdings for its higher AI exposure; Venture for its higher susceptibility to broad slowdown risk), as Singapore navigates the key “2Ts” risks (tariffs and the tech cycle)
  
  
  • WTO expects merchandise trade volume to grow 0.5% in 2026, compared to 2%+ in 2024/25
    
    
  • 1) Mature electronics upcycle, 2) waning AI boom and/or 3) enactment of the threatened US semiconductor tariffs are key risks to watch in Singapore electronics’ sector
    
    #2) Stocks such as OCBC and AvePoint should ride on the resilience of the modern services sector, supported by accommodative financial conditions and ongoing digitalisation efforts
    
    #3) Construction-related stocks (Soilbuild Construction; Centurion Accommodation REIT on worker dorms) are underpinned by the booming local construction sector  

ASL Marine gave a surprise voluntary 1QFY26 update, exceeding our estimates, with revenue and profi t accounting for 25% and 30% of our forecasts, respectively. Improvements came from shipbuilding and ship repair, while chartering remained stable, which trickled down to ASL Marine’s bottom line through operating leverage, helped by a S$4mln improvement in fi nance cost. Moving forward, profi tability will be supported by

1) the disposal of approximately $55 million worth of idle vessels to be redirected to deleveraging, which will meaningfully lift the bottom line via decrease in interest, depreciation and holding costs,

2)sustained growth in the high-margin repair segment, underpinned by regulatory compliance requirements, vessel ageing, and the continued expansion of the global fl eet and

3) improving charter rates as ASL Marine progressively refreshes
older contracts that were previously locked in at low margins.

In view of this, we raise our profi t forecasts to S$32.2mln and S$35.8mln for FY26F and FY27F, respectively, and lift our target price to S$0.33, based on an unchanged 9.5x FY27F PE as our base-case valuation. In a bull-case scenario, earnings could reach as high as S$36mln and S$39mln for FY26F and FY27F (implying 7.3x FY26F PE and 6.7x FY27F PE), should repair yard utilisation tighten further and vessel disposals progress more rapidly than expected, which would accelerate debt/cost reduction and unlock additional margin expansion.

UOB KAYHIAN

DBS RESEARCH 

ASL Marine (ASL SP)
1QFY26: Earnings Beat On Faster-Than-Expected Turnaround

Highlights • ASL’s 1QFY26 earnings formed 30% of our full-year estimates and beat our expectations, lifted by stronger ship repair and shipbuilding contributions.

• Recovery momentum is backed by higher day rates, S$82m of new chartering contracts, a S$83m shipbuilding orderbook and S$55m of vessel-sale contracts.

• Maintain BUY with a 6% higher target price of S$0.35. ASL trades at 8.9x FY26F PE, implying a 25% discount to Singapore-listed peers’ average of 12x.

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Xtep International Holdings (1368 HK)
Takeaways From NDR In Thailand And Malaysia Highlights

• Key takeaways from the NDR with Xtep in Thailand and Malaysia are as follows. - Reiterated full-year targets; expects Saucony’s revenue to double by 2027. Management reiterated its 2025 guidance. In the medium term, management expects Saucony’s revenue to double by 2027 vs 2024, supported by 30-40 new store openings annually and robust same-store sales growth.

As for the DTC transformation, given its relatively small scale, management foresees minimal impact on the company’s overall financial performance. - Expect lower inventory levels by year-end. Management expects inventory value to trend downward to below Rmb2b by year-end. 

• Maintain BUY. Target price: HK$8.00.

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