Stocks to Watch

Singtel – TP (+), Earnings (+)

Will the rally continue or fizzle in 2026?

• Singtel’s share price has risen ~45% in 2025, led by a rise in the market value of associates and a sharp reduction in Holding Company discount
• In 2026, we expect Singtel’s core business to re-rate from just 5x 12M forward EV/EBITDA to the regional average of 7x EV/EBITDA catalysed by doubling of its data centre capacity in early 2026 and stabilisation of Singapore mobile ARPU in mid-2026
• BUY with revised TP of SGD5.71 (prev SGD5.04) led by rise in the core business value. The stock offers 13% earnings CAGR over FY26F-28F with over 4% yield. Potential acquisition of a stake in STT GDC at a fair value might be neutral in the near term but positive in the medium term

Seatrium

Christmas gift comes early! Secures SGD2bn HVDC contract

• Consortium with GE Vernova won contract worth ~SGD2bn to deliver TenneT’s 2.2 GW BalWin5 HVDC; lifting YTD wins to over SGD4bn
• 4th project under the TenneT framework and first German 2 GW-class award, deepening Seatrium’s offshore wind franchise
• Second major award in two weeks following the recent bp FPU contract (~SGD1.3bn), signaling accelerating order momentum
• One of our top picks for 2026 in anticipation of stronger contract wins and margin expansion; Reiterate BUY and TP SGD2.96

Singapore Equity Picks

Monthly Review: Record performance in 2025

• Record year with YTD total return of 34.7%, outperforming the STI’s 24.9%
• Positioned for key 2026 themes – 1) secular large-cap winners, 2) SMCs with earnings growth/recovery, 3) resilient high-yield plays

Lendlease Global Commercial REIT (LREIT): Remove from Dividend at SGD0.60

While LREIT remains among our sector analyst’s preferred retail REITs for 2026, we remove the stock on a tactical basis as we reduce our REIT exposure (from 4 to 3) in equity picks. This comes amid a more uncertain US interest rate outlook, with our economist expecting just 1 more rate cut next year in line with the Fed’s dot-plot. Domestically, our risk-free rate (MAS 10Y yield) also looks to stabilise around the 2% mark next year, according to our interest rate strategist. Shares removed returned 7.7%.

This will be our last DBS Stock Pulse publication for 2025. We will resume publication on Friday, 2 Jan 2026.  Happy holidays! We wish everyone a Happy and Prosperous year ahead!

Legend

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