SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

China Everbright Environment / Equity Bottom-Up

<ul><li>CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth.</li><li>CEWL maintained cash and cash equivalents of HK$1.85 billion as of 31 December 2024, ensuring strong liquidity.</li><li>CEWL's EBITDA fell by 11% to HK$2.20 billion in FY2024 due to one-time events and exchange rate fluctuations.</li></ul>

CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth.CEWL maintained cash and cash equivalents of HK$1.85 billion as of 31 December 2024, ensuring strong liquidity.CEWL's EBITDA fell by 11% to HK$2.20 billion in FY2024 due to one-time events and exchange rate fluctuations.

10 in 10 with China Everbright Water - Embracing Internationalisation for stable growth

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>With a range of 34.5-68.1%, our five best calls in 2024 generated an average return of 54.1% YTD, outperforming the Hang Seng Index by 26.2pp. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Communications Construction (1800 HK)</a> and <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> are expected to sustain strengths into 2025 on market value management and pick-up in new orders.</li>
<li>
<a href="https://www.smartkarma.com/entities/xinhua-winshare-publishing-media-co-ltd" target="_blank" data-smartkarma-citation="entities:15072:1" rel="noopener">Xinhua Winshare (811 HK)</a>, <a href="https://www.smartkarma.com/entities/china-everbright-environment-group-limited" target="_blank" data-smartkarma-citation="entities:15946:1" rel="noopener">China Everbright Environment (257 HK)</a>, and <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a> may hold their share price, but gains are unlikely to be as much as 2024.</li>
</ul>


With a range of 34.5-68.1%, our five best calls in 2024 generated an average return of 54.1% YTD, outperforming the Hang Seng Index by 26.2pp. 

China Communications Construction (1800 HK) and Dongfang Electric (1072 HK) are expected to sustain strengths into 2025 on market value management and pick-up in new orders.

Xinhua Winshare (811 HK), China Everbright Environment (257 HK), and SITC International (1308 HK) may hold their share price, but gains are unlikely to be as much as 2024.


Our Best Calls in 2024: Review and Outlook for 2025

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

China Conch Venture Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> is now at negative stub value, the low-end since 2020. This is despite a 16.4% growth in 1H22 core earnings to Rmb542m.</li>
<li>The company's waste-to-energy (WTE) capacity will increase by 25% in FY23 and its internal target calls for an earnings CAGR of 33% between FY21 and FY25 for WTE segment.</li>
<li>We should not underestimate the potential from new business initiatives including cathode and anode materials and lithium battery recycling. They have good medium-to-long term exposure to China's new energy industry.</li>
</ul>



China Conch Venture Holdings (586 HK) is now at negative stub value, the low-end since 2020. This is despite a 16.4% growth in 1H22 core earnings to Rmb542m.
The company's waste-to-energy (WTE) capacity will increase by 25% in FY23 and its internal target calls for an earnings CAGR of 33% between FY21 and FY25 for WTE segment.
We should not underestimate the potential from new business initiatives including cathode and anode materials and lithium battery recycling. They have good medium-to-long term exposure to China's new energy industry.


Conch Venture (586 HK): An Overlooked Value Play

<ul>
<li>The top ten highest-yielding stocks under our coverage have an average yield of 7.4% for FY25F and 7.2% for FY26F, attractive amid the declining interest rate environment.</li>
<li>
<a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a>, <a href="https://www.smartkarma.com/entities/anhui-expressway-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5236:1" rel="noopener">Anhui Expressway Co Ltd H (995 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-railway-signal-communication-co-ltd" target="_blank" data-smartkarma-citation="entities:613:1" rel="noopener">China Railway Signal &amp; Communication (3969 HK)</a> are better quality ones with 6-7% average yield.</li>
<li>Chinese airlines are low on yields given they are still loss-making, but they have a good earnings rebound in 2H25, making them suitable for aggressive investors.</li>
</ul>


The top ten highest-yielding stocks under our coverage have an average yield of 7.4% for FY25F and 7.2% for FY26F, attractive amid the declining interest rate environment.

Sinotrans (598 HK), Anhui Expressway Co Ltd H (995 HK), and China Railway Signal &amp; Communication (3969 HK) are better quality ones with 6-7% average yield.
Chinese airlines are low on yields given they are still loss-making, but they have a good earnings rebound in 2H25, making them suitable for aggressive investors.


China & HK Strategy: The High-Yield Playbook

Hong Kong

China Everbright International Limited provides environmental protection project management and consultancy services. The Company's operations are broken up into environmental energy, environmental water, environmental construction and environmental technology.

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China Everbright Environment (257 HK)

10 in 10 with China Everbright Water - Embracing Internationalisation for stable growth

CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth. CEWL maintained cash and cash equivalents of...

Singapore Exchange Ltd (SGX)

Our Best Calls in 2024: Review and Outlook for 2025

Our best calls for 2024 outperformed HSI, with CCCC and Dongfang Electric expected to sustain into 2025. Xinhua Winshare, China Everbright Env,...

Osbert Tang, CFA

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

Conch Venture (586 HK): An Overlooked Value Play

The market has deeply undervalued Conch Venture's waste-to-energy business as reflected by the negative stub value. New business initiatives and...

Osbert Tang, CFA

China & HK Strategy: The High-Yield Playbook

With the increase in volatility in the near term due to the uncertainties from potentially higher tariffs and the Trump-Xi meeting in APEC, there...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

10 in 10 with China Everbright Water - Embracing Internationalisation for stable growth

CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth. CEWL maintained cash and cash equivalents of...

Singapore Exchange Ltd (SGX)

Our Best Calls in 2024: Review and Outlook for 2025

​Our best calls for 2024 outperformed HSI, with CCCC and Dongfang Electric expected to sustain into 2025. Xinhua Winshare, China Everbright Env,...

Osbert Tang, CFA

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

Conch Venture (586 HK): An Overlooked Value Play

The market has deeply undervalued Conch Venture's waste-to-energy business as reflected by the negative stub value. New business initiatives and...

Osbert Tang, CFA

China & HK Strategy: The High-Yield Playbook

With the increase in volatility in the near term due to the uncertainties from potentially higher tariffs and the Trump-Xi meeting in APEC, there...

Osbert Tang, CFA

Our best calls for 2024 outperformed HSI, with CCCC and Dongfang Electric expected to sustain into 2025. Xinhua Winshare, China Everbright Env,...