Singapore Thematic - RHB Invest 2019-08-23: Remaking Singapore ~ A Never-ending Process

Singapore Thematic Research - RHB Invest | SGinvestors.io JUMBO GROUP LIMITED (SGX:42R) SHENG SIONG GROUP LTD (SGX:OV8) UNITED OVERSEAS BANK LTD (SGX:U11) CITY DEVELOPMENTS LIMITED (SGX:C09) COMFORTDELGRO CORPORATION LTD (SGX:C52) SINGTEL (SGX:Z74) DBS GROUP HOLDINGS LTD (SGX:D05)

Singapore Thematic - Remaking Singapore: A Never-ending Process


Singapore’s transformation never stops.

  • Constrained by space and population size, Singapore (SG) has always had to think smart to meet its challenges. With a clear vision on development and strong leadership, its performance over the past few decades has been remarkable. However, the country is not resting on its laurels and continues to work towards transforming the economy, to better navigate uncharted waters of an increasingly turbulent and uncertain world.
  • We believe government policies that address the demographic changes, disrupt existing industries through introducing technology, and help in building world-class infrastructure, will be some of the key changes that SG will witness over the next decade.



Real estate sector to evolve amidst demographic changes.

  • While slowing population growth may seem negative for the real estate sector, we believe declining average household sizes among residents will continue to create annual housing demand of c.20,000 homes, similar to the last decade. Also, increased focus on the creation of retirement villages to cater to an ageing population will keep developers busy over the long term.
  • CITY DEVELOPMENTS (SGX:C09), being one of the pioneers in the Singapore real estate sector, is expected to play a key role in this transformation.


Consumer sector may struggle to adapt to policy and demographic changes.

  • Tightening foreign worker quotas and limited interest among young citizens to undertake low-paying frontline jobs in service industries will force consumer companies in Singapore to incur higher manpower costs, or undertake capex to introduce automation in their operations.
  • While companies like SHENG SIONG GROUP (SGX:OV8), BREADTALK GROUP (SGX:CTN), JUMBO GROUP (SGX:42R), and KOUFU GROUP (SGX:VL6) are better prepared for such a change, most businesses would struggle to cope with changes from an ageing population and the advent of e-commerce.


Disruption in existing industries a long-term positive.

  • The Government is open to disrupting well-established industries like banking, power and telecommunications by opening up the sectors to new competition and introducing new technology – with a focus on improving service quality, enhancing productivity and lowering long-term operating costs.
  • As the three Singapore banks have already made significant progress in adopting digital technologies, we see limited downside risks from the arrival of digital banks. Amongst the banks, DBS (SGX:D05) and UOB (SGX:U11) remain our preferred picks.
  • While rising competition may be a short-term negative for telecom players, deployment of 5G services and participation in Smart Nation initiatives could benefit the incumbents. SINGTEL (SGX:Z74) is our preferred telecom operator in Singapore.


Government remains focused on building world-class transport infrastructure.

  • While Singapore has remained focused on building world-class transport infrastructure since 1996, it has adapted policies to better suit the evolving needs of an ageing population and rising affluence. The latest 2040 Land Transport Master Plan focuses on building a convenient, well-connected and fast transport ecosystem that offers an inclusive infrastructure, and an environment that supports healthy lives.
  • As the Government remains committed to making public transport the preferred mode of travel, we see long-term benefits for players such as COMFORTDELGRO (SGX:C52), which operates the largest public bus service in Singapore.

See attached 55-page PDF report for complete analysis by sector.



Company Reports






Singapore Research RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-08-23
SGX Stock Analyst Report BUY MAINTAIN BUY 0.470 SAME 0.470
BUY MAINTAIN BUY 1.320 SAME 1.320
BUY MAINTAIN BUY 29.500 SAME 29.500
NEUTRAL MAINTAIN NEUTRAL 9.200 SAME 9.200
NEUTRAL MAINTAIN NEUTRAL 2.550 SAME 2.550
NEUTRAL MAINTAIN NEUTRAL 3.400 SAME 3.400
NEUTRAL MAINTAIN NEUTRAL 28.300 SAME 28.300



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