My Stock Market Stories: March 2026

Presentation Summary

Technology Sector Highlights

Salesforce (CRM): The company met revenue expectations for Q4 2026, while adjusted earnings per share ($3.82) beat guidance. Growth was driven by the Platform Cloud (up 37%), which includes Agentforce and Slack. A new metric, Agentic Work Units (AWU), showed a 57% quarter-over-quarter increase, demonstrating actual enterprise value creation from AI. However, operating margins fell by 1.5% due to higher R&D and marketing costs. The rating is Buy with a target price (TP) of $253.
Nvidia (NVDA): Revenue was within expectations, but profits beat estimates due to sustained margins despite a 42% surge in memory prices. Nvidia successfully maintained margins by bundling products into system-level racks (GB200/GB300). Networking revenue jumped 2.6x year-over-year. The stock was upgraded to Buy with a $120 TP.
AEM Holdings: Reported an FY25 turnaround with a 32% increase in PATMI. Optimism is fueled by a potential new contract with a hyperscaler customer and increased orders from Intel.
Venture Corporation: Upgraded to Accumulate. While revenue has been declining since 2017, margins are at record highs, and a rebound is expected in FY26 driven by next-generation Philip Morris products and data center networking demand.

Singapore Banking Sector

UOB: Q4 earnings were slightly below estimates due to lower net interest income (NII), which fell 4% following a 16-basis point margin compression. A positive highlight was the 10% recovery in fee income. The rating is Neutral with a $37 TP.
OCBC: Earnings also fell slightly below estimates, but non-interest income surged 37%, primarily driven by wealth management. Management remains committed to a $2.5 billion capital return plan. The rating is Accumulate with a $21.50 TP.

Industrial and Engineering Stocks

ST Engineering: Upgraded to Buy following strong results where commercial aerospace EBIT jumped 25% due to increased maintenance and engine part production. Geopolitical tensions are expected to provide a significant defense tailwind, as the company aims to double international defense sales.
Pan-United: Revenue increased 16% and PATMI surged 35%, driven by higher volumes and project take-ups. The company is utilizing its AiR digital platform to optimize truck allocation and lower costs. The rating is Buy with a $1.73 TP.
Sembcorp Industries (SCI): Maintained at Accumulate despite a 25% drop in gas earnings, as renewables capacity grew 19% and a pending $5 billion Australian acquisition is expected to be earnings-accretive.

REITs and Aviation

S-REITs: The sector saw mixed performance; overseas commercial and hospitality REITs stood out, while retail was impacted by holiday outflows. Broadly, FY25 results met expectations with 2% DPU growth. Retail REITs benefit from high occupancy, while the office sector sees a "flight to quality".
Singapore Airlines (SIA): Passenger traffic increased 6.3%, but air cargo revenue fell 5%. Associate losses from Air India increased due to new labor laws. The rating is Neutral with a $7 TP.

Macro and Technical Outlook

Technical Pulse: The S&P 500 is in a sideways consolidation phase. Analysts remain bullish on US Treasury bonds, gold, and oil for March, while Bitcoin remains in a downtrend.

Q&A Session

1. Financials and Banking Sector

Top Dividend Pick: DBS is highlighted as the best choice for investors seeking stable dividends and a predictable stock price. Unlike its peers, DBS provides fixed dividend-per-share (DPS) guidance through 2027 and pays quarterly.
Capital Adequacy: All three major Singapore banks (DBS, OCBC, UOB) maintain similar CET1 ratios of approximately 15%. However, DBS is more transparent about its capital return plans.
OCBC and Great Eastern (GE): GE remains a positive tailwind for OCBC, though it contributes less than 8% of total income. Management has stated there are no plans to privatize GE in the near term (3–5 years).
Geopolitical Impact: The conflict involving the US and Iran is expected to have a muted impact on local banks. If the situation leads to higher-for-longer interest rates, it could actually benefit net interest margins.

2. Technology and Semiconductors

AEM vs. Frencken: AEM Holdings is viewed as having a superior growth forecast compared to Frencken. This is driven by a potential new contract with a hyperscaler and stronger profit growth. Frencken's recent performance has been lackluster as a key customer (ASML) reorganizes orders for next-generation EUV systems.
Salesforce AI Positioning: Salesforce is considered well-positioned in the AI software market through its "Agentforce" platform. Analysts believe the company is less vulnerable to AI disruption because of its clear three-level monetization strategy (premium SKUs, consumption credits, and seat expansion).
Nvidia (NVDA) and Broadcom (AVGO): Nvidia’s stock drop post-results was attributed to a general sector re-rating and concerns over the sustainability of hyperscaler capital expenditure, despite strong fundamentals. Broadcom is expected to benefit from high demand for AI networking and internet switches.

3. REITs and Real Estate

Lendlease Global Commercial REIT: The rights issue to acquire the remaining 30% of PLQ Mall is viewed as a strategic move. Analysts suggest opting in if investors believe in the long-term growth of Singapore suburban retail.
US Office Market: A "buy" rating is maintained for Prime US REIT based on signs that the US office market is bottoming out, with stabilizing occupancy and lack of new supply.
Residential Outlook: PropNex and APAC Realty saw share price pressure due to guidance suggesting softer new home sales for the remainder of 2026.

4. Industrials, Energy, and Aviation

Building Materials: Both Pen-United and BRC Asia are identified as prime beneficiaries of the ongoing Singapore construction upcycle, which is expected to peak next year.
Gold Stocks: Analysts prefer miners like CNMC Goldmine over retail gold concepts (e.g., MoneyMax). CNMC offers higher upside due to production growth from its new underground mining facility and exploration at new sites.
Oil and Geopolitics: The team views major sell-offs in oil and semiconductor stocks as buying opportunities, betting that current Middle Eastern tensions will be short-lived (1–2 weeks). Keppel may benefit indirectly through its legacy rig assets.
Aviation: SIA maintains a Neutral rating with a $7 target price. While fuel costs are a risk, SIA’s hedging policy provides significant protection. SATS is viewed as structurally stronger following its global acquisition of WFS.

5. Technical Analysis (TA) Highlights

Nvidia (NVDA): Shows a potential "head and shoulders" pattern; a break below $171 would signal further short-term weakness.
SIA: Tested resistance at $6.65, which is now acting as support.
ComfortDelGro: Remains range-bound between $1.45 and $1.51.

My Stock Market Stories