Trending Sector
Regional Stocks
From tariff casualties to truce beneficiaries on 90-day US-China tariff deal
- What’s new: The US reduced additional tariffs on Chinese goods to 30% from 145% for 90 days
- The joint statement far exceeded our and market expectations. Even the most optimistic investors had only anticipated a rollback to the April 2 level of 34% in additional tariffs
- The easing is expected to support US-China trade flows, ease market concerns over China’s economic slowdown, though it may dampen expectations for rate cuts
- Our thoughts – Short-term boost amid lingering uncertainty
- Cumulative tariffs of Trump 1.0, Biden, and Trump 2.0 still leave the effective rate on Chinese imports at about 40% after this 90-day tariff roll-back while China’s retaliatory duties fall to 10%
- Export driven tech names to benefit in Hong Kong - BYDE and Lenovo may benefit from potential inflows while large-caps such as Tencent, Alibaba, and Xiaomi could gain from overall improving sentiment
- Singapore stocks previously deemed as casualties of the elevated trade tensions should lead the rebound, including SATS and stocks with China exposure (e.g., HPH Trust, MLT, Wilmar)
- Improving US-China tariff news flows should underpin HPH Trust’s rebound to USD0.164
- IFAST benefits indirectly on improving investor sentiment from this positive development
- Expect a more muted relief rally for REITs on lower rate cut expectations, with Fed fund futures now pricing in about two cuts by end-2025
Regional Oil and Gas
Trade Optimism Boosts Oil Price: Stay with Energy Leaders
- Oil price bounces back on renewed global demand optimism as US and China agree to temporarily reduce tariffs
- We had earlier advocated investors not to panic, the recent development underscores our positive stance of a better 2H25 for oil
- Stay with the industry leaders – CNOOC, Petrochina, Yangzijiang and Seatrium
Regional Technology
Temporary tariff relief lifts tech; semiconductor curbs could be next
- 90-day US-China tariff reduction offers temporary relief for tariff-sensitive tech stocks; semiconductor tariffs remain the key risk to monitor
- Most stocks under our coverage have rebounded meaningfully since the April “Liberation Day” low, with some gaining nearly 40%
- Our preferred SGX-listed names are UMS, GVT, and Frencken, supported by strong fundamentals and structural tailwinds
- Among HK-listed consumer electronics plays, we favour BYD Electronics and Xiaomi, given their positioning in AI, robotics, and EV ecosystems
Singapore Equity Picks
HPH Trust: Add 138,000 shares @ USD0.148 to Dividend
HPHT is a key beneficiary of the better-than-expected 90-day US-China tariff truce. We had highlighted back on 2 May and 6 May that the stock is supported at USD0.145, with potential to further recover to USD0.164 if US-China tariff news flow continues to improve. That catalyst has arrived. Our analyst now sees a mild y/y decline in 2Q25 throughput vs. previous forecast of -17%. Stock trades at a 10% dividend yield.
Stocks to Watch
HPH Trust
- 90-day tariff reductions between the US and China are expected to support HPHT’s near-term cargo volume recovery, with China–US shipments likely to rebound from mid-May
- We now expect a mild y/y decline in 2Q25 throughput vs. previous forecast of -17%
- Reiterate BUY on easing US-China trade tensions and attractive FY25 dividend yield of 10%
Mapletree Logistics Trust (MLT)
De-escalating US-China tensions a “helping hand”
- Tactical opportunity to re-enter MLT as US-China trade tensions ease in the interim
- Stock has seen a sell off due to its (i) China/ASEAN logistics exposure to trade (China +1) and (ii) re-set in DPUs of between -11%
- Stock now trades FY26-27F yield of 6.6%-6.7%, and a highest yield spread in 10-years at 4.1%
- Undervalued play for one of Singapore’s most liquid proxy, BUY, TP SGD 1.55 maintained
ThaiBev – Earnings (-), TP (-)
Navigating challenging consumer environment
- 1H25 earnings fell 3.2% to THB14.7bn, below estimates
- Declared 1H25 DPS of THB0.15, unchanged despite lower earnings, signalling continued focus on shareholder returns
- FY25F/FY26F earnings cut by 17%/20% due to challenging consumer environment with tariff headwinds
- Maintain BUY with lower SGD0.63 TP based on 16x PE on lowered FY25F earnings estimates
StarHub – Earnings (-), TP (-)
Over 5% yield with earnings growth from FY26F onwards
- Normalised 1Q25 earnings of SGD32mn (-21 y/y, -16% q/q) missed consensus by 16% on weaker mobile and cybersecurity projects during the quarter
- StarHub reiterate FY25F stable EBTIDA guidance with end of DARE+ transformation costs in 1H25F; we cut FY25F/26F earnings by 5%/5% on weaker mobile ARPU
- Maintain BUY, lower TP to SGD1.38 (pre: SGD1.46) with Ensign fetching SGD0.32 per share
OCBC
- 1Q25 net profit beat consensus, as strong non-interest income growth offset decline in net interest income
- NIM decline accelerated from 4Q24 to 11bps q/q
- Management maintained FY25F guidance and reaffirmed its commitment to capital management plans
- Maintain HOLD, TP SGD14.40
UMS Integration
1Q25 slight miss, but growth engines gearing up for 2Q25 rebound
- 1Q25 results slightly below expectations, lower system sales and higher costs a drag
- Expecting a stronger 2Q25, led by system shipment rebound and continued ramp-up from new key customer
- Key customers’ order forecasts remain intact despite ongoing trade war
- We currently have a BUY call with TP of SGD1.31
SIA Engineering
FY25 results in-line with expectations amid broad-based operating improvement
- FY25 core net profit of SGD140.2mn was largely in line with expectations (SGD142mn), though dividends came in slightly below
- Core operating margins continued to strengthen, aided by narrower losses in the engines and components (E&C) segment and stronger performance in base and line maintenance (B&LM)
- Final dividend per share of 7.0 Scts was a slight miss, but offset by higher share buybacks during the year
- Earnings outlook remains sound, with trade disruptions likely to have limited impact on the group
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