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UOB KAYHIAN |
UOB KAYHIAN |
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Riverstone Holdings (RSTON SP) AI, Forex And Pricing Tailwinds Emerging; 7% Yield Is Attractive
Highlights • A stronger US dollar against the ringgit and improving pricing power from recent ASP hikes by Chinese glovemakers should provide an earnings tailwind. • The cleanroom glove segment, which contributes around 70% of earnings should remain robust, helped by ongoing orders from AI-related data centre and memory storage customers. • Maintain BUY with an unchanged target price of S$1.21. Riverstone currently trades at around 15% discount to peers and offers an attractive 7% 2026 yield.
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Automobile China Auto Sector Weekly (26 Sep-8 Oct 26)
Highlights • We cut our 2026-28 sales estimates for auto OEMs, based on lower-thanexpected 9M26 sales. • 2027 sales are poised for a modest recovery on stabilisation of domestic sales and sustained buoyant export growth. • Trade barriers to China’s EVs are rising globally through tariffs and localisation rules that force Chinese OEMs from exports to local production. This favours the leading OEMs – BYD and Geely. • Maintain MARKET WEIGHT. Top BUYs: BYD, Geely, CATL. Top SELLs: Li Auto, XPeng.
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| LIM & TAN | LIM & TAN |
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Seatrium Limited ($1.96, down 0.05) has secured a Floati ng Storage Regasifi cati on Unit (“FSRU”) conversion contract with an opti on for a second contract from Excelerate Energy, Inc (NYSE:EE) – the global leader in the FSRU industry. Capitalized at S$6.7bln, Seatrium’s forward PE is undemanding at 12.4x, price to book is 0.9x, yield 1.5% while consensus 1 year target price of $2.46 implies a potenti al upside of 26%. Seatrium conti nues to deepen its footprint in the FSRU conversion market, with the project for Excelerate Energy announced just days aft er another project win for Karpowership. Seatrium’s new S$200 million share buyback programme follows the previous S$100 million programme fully uti lized on 1’Sep. Management remains opti misti c about 2H’26 prospects given its robust orderbooks of $13.3bln. We maintain an Accumulate rati ng on Seatrium.
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We highlight the salient points from Tiong Woon Corporation’s / TWC ($0.895, down 1.5 cents) FY2026 Annual Report, where the Group delivered its fi ft h consecuti ve year of revenue and earnings growth, supported by stronger heavy lift ing activity, improving fleet utilisation and operating leverage. Management remains positive on the near to medium-term outlook, underpinned by Singapore’s construction upcycle and growing opportunities in regional infrastructure and industrial developments. TWC’s market cap stands at S$207mln and trades at 8.0x forward P/E and 0.6x P/B, with a dividend yield of 2.8%. Given its exposure to Singapore’s multi -year construction upcycle, ownership of a strategic long-lease building worth at least c.S$100mln, improving financial metrics and increasing contributions from higher-margin overseas projects, we find TWC’s current valuation compelling. We believe the stock deserves to trade closer to its book value of S$1.47 per share (1.0x P/B) as fleet utilisation improves, earnings growth accelerates and the market increasingly recognises the underlying value of its asset base. We thus recommend a BUY on TWC. |
| MAYBANK SECURITIES | DBS GROUP RESEARCH |
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Sheng Siong Group (SSG SP) Quality remains but upside narrows; D/G to HOLD
Valuation leaves little room for the next leg Sheng Siong remains a high-quality operator, but its strong share-price rerating now prices in much of it. At 28.4x FY26 P/E & 17.3x EV/EBIT, it is among region’s most expensive food retailers, despite offering a moderate FY25–28 NPAT CAGR of 8% & a 2.5% dividend yield. With growth normalising and slight headwinds emerging, we see limited scope for further re-rating. We have trimmed our 2028 new-store assumption from 5 to 4 and made modest cuts to sales-growth forecasts, reducing FY26–28 NPAT by 1–3%. We downgrade to HOLD & lower our TP to SGD3.12 from SGD3.22. Within the consumer space, we prefer Food Empire (FEH SP), supported by its strong NPAT growth (31% CAGR), moderate valuations and 5% dividend yield.
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Singapore Telecommunications Ltd Can Bharti’s Price Hike Spark Singtel Recovery?
Airtel has taken a measured step towards tariff repair, but the hike is well below Street expectations.Bharti Airtel has increased all postpaid plans by INR50/month from 8 October, equivalent to ~3-11%, with the entry plan moving from INR449 to INR499. Existing subscribers will migrate to the nearest higher plan over about a month, implying a full run-rate during 3Q27. Airtel has also added one free international-roaming trip per SIM annually. This hike is on top of August prepaid plan pruning whereby Airtel removed popular entry and midtier data packs. This hike widens Airtel’s postpaid individual entry premium over Jio to ~43% from ~29%, while prepaid daily-data entry pricing remains at parity at INR349. We see limited scope for Jio to follow immediately, given its upcoming IPO and its historical preference to grow ARPU through mix and usage. However, the broader pricing environment remains favourable, expectations of 10-15%industry hike over the next four-to-five months.
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