PSR Weekly Market Outlook 5 Min Summary

 Dated: 09/03/2026         Source: https://www.youtube.com/watch?v=eiCptoqcUN4 

 Presentation Summary

Technology and E-commerce

• Zoom Communications: The company is focusing on enterprise revenue, which grew by 7%, driven by "Zoom Workplace" and new AI integrations like meeting summaries and follow-up actions. Earnings nearly doubled due to cost discipline and a successful strategic investment in Anthropic, though free cash flow is expected to be lower in the coming year due to database infrastructure costs.
• Sea Limited: While revenue was in line with expectations, the company is reinvesting heavily in Shopee’s logistics and loyalty programs, leading to flat EBITDA guidance that caused a cautious market reaction. Its gaming arm, Garena, remains durable with over 30% booking growth for Free Fire.

Real Estate and REITs

• City Developments Limited (CDL): CDL’s performance was boosted by significant capital gains from divestments like the South Beach sale. The company achieved record residential sales of $4.35 billion in FY25 and is pursuing a strategy of recycling capital by divesting underperforming assets in the UK and China.
• PropNex: Analysts expect slower earnings growth this year due to a lack of new residential launches (projected 8,800 units versus 11,400 previously). Despite this, PropNex maintains a dominant 60% market share in several segments and remains a strong cash generator.
• UI Boustead REIT: This new industrial REIT IPO features a diversified portfolio in Singapore and Japan. It has a guided FY27 dividend yield of 7.8%, which analysts noted is more attractive than its closest peers.

Construction and Industrial Sectors

• Soilbuild Con: Revenue surged 84% year-on-year, primarily driven by the large PSA supply chain hub project. While its order book dipped slightly, the outlook remains positive due to Singapore’s increased research and manufacturing budget.
• Ever Glory: Following its acquisition of Guthrie, the company is now one of Singapore’s largest M&E (Mechanical and Electrical) players. Its order book surged 135%, with upcoming opportunities in Changi Airport Terminal 5 and new hospital contracts.
• Frencken: Although semiconductor orders were soft as customers prepared for new technology (high-NA EUV machines), a rebound is expected in the second half of the year.

Commodities, Shipping, and Logistics

• CNMC Gold: Revenue doubled due to a rally in gold prices and a 60% increase in production capacity. Analysts remain bullish on gold despite a potential tax liability in Malaysia.
• SATS: Performance was supported by a 7.3% increase in cargo volumes, particularly in time-sensitive semiconductor and AI-related cargo. However, its US ground handling operations are facing pressure from lower volumes and tariffs.
• Yangzijiang Shipbuilding: The company saw a 30% jump in earnings and holds a massive $15 billion in new orders, providing strong revenue visibility through 2028.

General Market Outlook

• Tactical Winners: In the face of rising oil prices and geopolitical tensions in the Middle East, analysts identify oil and gas service providers, tanker owners (like Yangzijiang Maritime), and ST Engineering as potential beneficiaries. SGX is also expected to benefit from increased market volatility and higher trading volumes.
• Consumer Trends: Sheng Siong continues to see record gross margins (32%) and is expanding its footprint into retail malls. Conversely, ComfortDelGro is seeing pressure in its Singapore taxi business as its fleet declines due to aggressive competition and incentives from Grab.

Q&A Session

1. Real Estate and REITs

• UI Boustead REIT IPO: Analysts noted that UI Boustead appears more attractive than its closest peer, A-PAC REIT, offering a higher forward dividend yield of 7.8% (versus 7%) and a lower Price-to-NAV of approximately 1.0x. While there is a risk that the price could dip below the 88-cent IPO level due to short-term "flipping" by investors, its valuation remains competitive.
• Singapore REITs Outlook: Despite "sticky inflation" and rising energy costs potentially reducing the number of Fed rate cuts, analysts remain bullish on Singapore REITs, still expecting at least one rate cut in the near term.
• Wee Hur: Wee Hur's recent share price decline was attributed to profit-taking after a significant pre-earnings spike, though its core net profit rose 130%. The company expects a 60% increase in worker dormitory capacity this year.

2. Banking and Finance

• Exposure to Middle East: Local banks (DBS, OCBC, UOB) have no direct loan exposure to the Middle East, though they maintain some wealth management presence in Dubai. UOB has the highest relative risk regarding SME provisions but has already built a $600 million buffer to mitigate this.
• Capital Returns: Dividends and buyback commitments are considered safe because the funds have already been set aside. However, OCBC may be slower to commit to additional future capital returns, preferring to hold excess capital for potential M&A.
• Interest Margins: Higher-for-longer interest rates, driven by inflation concerns, are expected to benefit Net Interest Margins (NIM), with DBS positioned as the primary beneficiary.

3. Construction and Industrial

• SoilBuild Con: The 15% year-on-year decline in its order book is viewed as a normalization following a massive $600 million PSA contract win. The long-term outlook is supported by a 30% increase in Singapore's research and innovation budget (RIIE 2030).
• Pan United: While higher energy costs and depreciation expenses may pressure short-term profits, margins are expanding due to in-house technology that improves operational efficiency (e.g., reducing truck queuing times).

4. Energy and Commodities

• Tactical Winners of Oil Spikes: Beneficiaries of rising oil prices include oil and gas producers (Rex, RH Petrogress), shipyards (Yangzijiang Shipbuilding), and palm oil companies like Wilmar, which see increased demand for biodiesel.
• Airlines: Conversely, airlines are cited as the sector most severely affected by fuel price surges.
• Gold Outlook: Analysts remain bullish on gold prices due to geopolitical instability and consistent buying by central banks, such as China's treasury.

5. Transportation and Logistics

• ComfortDelGro: The decline in the Singapore taxi fleet is a significant concern. Because the taxi business is a "pure profit" rental model, losing even a small number of drivers to competitors like Grab directly impacts the bottom line.
• SATS: While exposed to Europe and the Middle East, the impact on SATS is mitigated because its contracts are tied to global airline networks (e.g., servicing Emirates worldwide) rather than just regional hubs.

6. High-Risk Counters

• Yangzijiang Financial: The outlook is described as "pretty grim" due to a 50% Non-Performing Loan (NPL) ratio in its China-based loan book, leading to significant recent losses.