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CGS INTERNATIONAL |
CGS INTERNATIONAL |
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Sembcorp Industries Strength from Alinta and elevated USEP
■ SCI completed Alinta acquisition on 11 Jun. One-off acquisition-related cost of S$190m in 1H26F will be partially offset by earnings contribution in 2H26F. ■ While Australian power prices have been largely stable over Mar-Jun 2026, rising power prices in Singapore should drive higher spark spreads. ■ Reiterate Add for SCI’s defensive gas earnings backed by cost-pass through, with potential upside from gas optimisation amid tight market supply situation.
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LHN (LHN SP) 1HFY26: Challenging 1H26; Coliwoo Still the Key Growth Driver
Highlights 1HFY26 results came in weak, with revenue of S$60.9m and PATMI of S$16.8m forming 44% and 38% of our forecasts respectively. Occupancies remained resilient across core space optimisation assets, underscoring the defensive, recurring nature of the group’s income base. Maintain BUY with an unchanged target price of S$0.71, pegged to 10x FY27F PE to capture expected earnings recovery in FY27.
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| LIM & TAN | MAYBANK SECURITIES |
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The Business Times reported that Keppel Ltd ($10.59, up 4 cents) is targeting data centre markets where land and power are scarce, betting that these very constraints that its competitors avoid would allow it to charge higher prices. Keppel’s market cap stands at S$19.3bln and currently trades at 19x forward PE and 1.8x PB, with a dividend yield of 3.2%. Consensus target price stands at S$12.6, representing 20% upside from current share price. Given Keppel’s tilt towards data centres and its exposure to supply-constrained markets such as Singapore, Japan, Taiwan and Korea, we think it is well placed to capture premium pricing, stronger capital recycling opportunities and recurring asset management income over time. As such, we maintain a BUY on Keppel Ltd.
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Singapore Banks Opportunity in weakness?
Nuanced impact from China rule change In the past week, DBS fell -4.6%, OCBC -5.0% and UOB -2.3% on fears of slower wealth management growth in North Asia due to changes in Chinese outbound investment regulations. We think this is overdone. Onshore Chinese wealth is not a client segment for SG banks. Offshore capital, which is the key segment in North Asia, should be unaffected by the new rules. SG and ASEAN make up the larger mix of AUM. Sector fundamentals of strong execution, asset quality, & regional growth remains solid. We see weakness as an opportunity to accumulate. OCBC, DBS top picks.
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| DBS GROUP RESEARCH | DBS GROUP RESEARCH |
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DBS Equity Picks Accumulate ahead of an anticipated July rebound
• AUM fell slightly (-1.4% since last review) as broader market stocks consolidated • Recent additions - iFast, YZJ Maritime, SATS, Singtel, CityDev • Recent reductions – Suntec REIT, Nanofilm, NTT DC REIT, UMS
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DFI Retail Group Holdings Ltd Exploring the path to HK supermarket dominance
Investment Overview Well-defined targets and growth strategies. DFI Retail had hosted its inaugural investor day in Dec 2025, during which management articulated clear strategic initiatives and financial objectives for each of its operating segments. The group targets core earnings of USD310– 350mn by 2028, a CAGR of 6–10% from FY25.
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