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CIO Weekly
GLOBAL EQUITIES
Source: iStock
23 Jul 2025
Equities Market Overview
YTD
Returns
(%)
1Y
Returns
(%)
1Y Fwd
P/E (x)
Global Equities
10.5
13.8
20.21
US
7.3
13.9
24.30
Europe
7.4
5.7
15.65
Asia ex-Japan
16.6
18.6
14.86
Japan
0.3
(1.6)
16.69
Global Sectors
Comm Services
14.5
25.1
19.5
Cons. Disc.
1.9
15.0
23.3
Cons. Staples
7.4
5.0
20.4
Energy
3.7
-4.5
14.0
Financials
16.0
25.4
14.0
Healthcare
-1.9
-10.0
17.0
Industrials
18.2
19.6
23.1
Materials
12.8
2.4
17.7
Real Estate
5.7
5.0
25.7
Technology
12.3
17.8
31.0
Utilities
15.1
16.9
16.4
Source: Bloomberg as at 22 Jul 2025
Figure 1:
China takes the lead in the global
patent race
Source: Wind, DBS
Focus of the Week
China tech leap: Patent leadership to commercial dominance.
China’s digital economy is increasingly
underpinned by a growing domestic innovation ecosystem,
as demonstrated by its patent filings,
which exceeded those of
the US in 2019 (c.59k) and rose to c.70k by 2024. While developed peers
like the
US, EU, and Japan have seen patent filings plateau or decline, China’s trajectory reflects a
strategic push toward
s self-reliance. While sheer volume does no
t guarantee productivity,
commerciali
sation is a critical bridge. 2024 guidelines from the China National Intellectual Property
Administration (
CNIPA) explicitly prioritise high-value patent conversion, signalling a structural push
to strengthen
intellectual property (IP) management and self-sufficiency. We believe the path forward
hinges on cross
-sector collaboration to build a robust IP framework that translates research and
development (
R&D) into scalable economic value.
China’s accelerating role in global tech disruption
creates durable alpha opportunities, particularly
where policy tailwinds intersect with commercial scalability. Investors should focus on high
-conviction
themes aligned with China’s
deepening digital infrastructure. Key areas include AI infrastructure, data
services, semiconductors, and open
-source AI contributors, all of which are central to China's
evolving tech stack. We expect China's tech landscape to increasingly tilt toward
s commercial
execution, favo
uring trendsetters with durable monetisation and strategic policy linkages.
Equity fund flows:
During the week ended 16 Jul, Developed Market (DM) Equity Funds recorded
USD4.6bn of inflows as investors positioned ahead of
anticipated clarity on tariff impacts from the
upcoming U
S earnings season. EU Equity Funds logged a fifth consecutive week of inflows, totalling
USD3
bn, while US Equity Funds saw marginal outflows of USD0.1bn. Global Emerging Markets (EM)
recorded modest inflow
s of USD0.18bn, in contrast to China, which experienced outflows of
USD0.56bn despite a strong 2.6% return in the Hang Seng Index.
Equity Research Highlights
United States & Europe
Apple
Phenomenal new products and technological barrier to
support growth
Jim Au
Abbvie
Humira collapse and aesthetics drag
Nico Chen
Colgate-Palmolive
Moderated growth outlook
Andy Sim
Ryanair
Poised for growth and shareholder returns
Tabitha Foo
Jason Sum
TotalEnergies
Production growth supporting robust shareholder return
potential
Suvro Sarkar
Asia ex-Japan
CNOOC
Boasting superior cost control
Pei Hwa Ho
Cathay Pacific
Gliding through turbulent trade winds
Tabitha Foo
Jason Sum
HSBC
Strong fee income growth
Manyi Lu
Ken Shih
Keppel Infrastructure Trust
Cash flows not as predictable as before
Suvro Sarkar
Taiwan Semiconductor Manufacturing Company
Strengthening its position as industry leader
Jim Au
0
20,000
40,000
60,000
80,000
1985 1995 2005 2015
International patents filed (1985-2024)
Germany China
USA Japan
South Korea
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
US EQUITY RESEARCH
18 July 2025
Apple Inc
Phenomenal new products and technological barrier to support growth
Company Overview
Apple Inc. (Apple) designs, manufactures, and markets smartphones, personal computers,
tablets, wearables, and accessories and sells a range of related services. The company’s
products include iPhone (51% of FY24 revenue), Mac (8%), iPad (7%), wearables, home, and
accessories (9%) like AirPods, Apple TV, Apple Watch, HomePod, and others. The company also
has an online services business (25%), which provides services like 1) operating platforms like
the App Store and iTunes, which allow customers to purchase and download applications and
digital content; 2) offering digital content through subscription-based services, including Apple
Arcade, Apple Music, Apple News+, Apple TV+, and Apple Fitness+; and 3) providing a range of
other services, such as AppleCare, iCloud, Apple Card, and Apple Pay.
Investment Overview
iPhone specification upgrades to drive premium model mix higher. We expect the launches of
the ultra-thin iPhone 17 Air in 2025 and Apple's first foldable iPhone in 2026 to set new
benchmarks in the smartphone market. Android manufacturers will likely follow suit,
accelerating their own specification upgrades. These innovative product introductions should
significantly boost shipment growth momentum. Apple currently commands a dominant 71%
share in the premium segment, supported by an established user base exceeding 150 mn,
which provides an excellent platform for adoption of new innovations. The introduction of
these cutting-edge iPhone models is expected to further enhance the premium model mix,
driving earnings growth in FY9/25F as gross margins expand amid an accelerating replacement
cycle.
China Weakness. Apple's iPhone sales in China have declined by 17% y/y in 2024, affected by
intense competition from local brands like Vivo, Huawei, and Xiaomi, who are capitalising on
innovation and targeted subsidies. The gradual implementation of AI features has further
delayed iOS user upgrades. Despite retaining leadership in the high-end market, Apple faces
persistent challenges, with the outlook remaining subdued until the anticipated launch of the
significantly upgraded next-generation iPhone 17/Air, featuring an enhanced AI Siri.
The technology breakthrough in semiconductor design. Apple has made significant strides in
semiconductor design, starting with the launch of its first ARM-based M1 chip in November
2020, moving away from Intel chips. The M1-equipped Macs offer superior performance,
battery life, and heat efficiency compared to their Intel-based predecessors, driving a 31%
increase in Mac sales in 4Q20. Apple has since expanded the M series chips to the iPad Pro
and is expected to continue advancing its chip technology for iPhones, Apple Watch, and
headsets, strengthening its competitive edge across product lines.
We are HOLD on AAPL with a TP of USD210 per share. Our TP is based on 28.5x forward PE,
0.5 SD above its peers' average due to its strong user loyalty, which supports long-term
product growth and higher shareholder return compared to its peers. AAPL’s share price has
outperformed the NASDAQ year-to-date, and we believe the short-term drivers have already
been factored in. We expect AAPL to achieve steady growth driven by the success of its
promising premiumisation and leading product technology in the long run.
Risks
Delays in Apple Intelligence launch could impact growth. Apple's in-house LLM is expected to
launch sometime in 2026; any further postponement could adversely affect consumer
sentiment and iPhone sales.
Analyst:
Jim Au | dbsvhk@dbs.com
Key Financial Data
Bloomberg Ticker
AAPL US
Sector
Information
Technology
Share Price (USD)
210.02
DBS Rating
HOLD
12-mth Target Price (USD)
210.00
Market Cap (USDb)
3136.8
Volume (m shares)
48,068.1
Free float (%)
97.9
Dividend yield (%)
0.5
Net Debt to Equity (%)
-66.0
Fwd. P/E (x)
29.3
P/Book (x)
47.0
ROE (%)
138.0
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Apple S&P 500
(indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
US EQUITY RESEARCH
18 July 2025
Abbvie Inc
Humira collapse and aesthetics drag
Company Overview
AbbVie is a leading biopharmaceutical company. It discovers, develops, manufactures, and
commercializes drugs for the treatment of chronic and complex diseases, including metabolic
and rheumatological diseases, neurological disorders, and skin diseases. Its only operates in
the pharmaceutical products segment. Its 4 key therapeutic areas in FY24 by revenue share
was Immunology: 47%, Oncology: 12%, Neuroscience: 16%, Aesthetics: 9%.
Investment Overview
Legacy erosion and underperformance in discretionary segments. In 1Q25, adjusted diluted
EPS was USD2.46, beating consensus estimates of USD2.38. However, this masks mounting
pressure beneath the surface. Revenue grew 8.4% y/y to USD13.3bn, primarily driven by two
drugs only – Skyrizi and Rinvoq, which are being forced to bear the weight of an accelerating
Humira decline. Humira sales plunged 50% y/y to USD1.1bn amid biosimilar competition,
underscoring the steep revenue cliff left by the patent expiry. The aesthetics segment also saw
a sharp 12% drop to USD1.1bn.
AbbVie’s patent expiry was offset by new approvals. AbbVie’s blockbuster immunology drug
Humira saw its sales plummet from USD21bn in FY22 to USD9bn in FY24 as its patent expired.
The company strategized to win approval for Skyrizi and Rinvoq in all indications of Humira
and beyond to offset the drop in Humira sales, which kept total immunology segmental sales
from a sharp decline (USD29bn in FY22 vs USD27bn in FY24). Peak sales targets of >USD31bn
for Skyrizi and Rinvoq by FY27 remains ambitious given rising biologic competition. The
company’s ability to sustain long-term earnings growth without broader portfolio acceleration
remains in question.
Stagnant top and bottom line. From 2020 to 2024, AbbVie’s revenue grew at a CAGR of 5%
from USD45.8bn to USD56.3bn, and earnings fell at a CAGR of 2% from USD4.6bn to
USD4.3bn. The stagnant top and bottom line are expected to persist due to Humira facing
biosimilar competition while Skyrizi and Rinvoq face biologic competition.
We have a HOLD rating on AbbVie, with TP of USD188.00. Our TP is based on 14.3x 25F PE,
0.9 S.D. above its five-year average. AbbVie’s reliance on only a handful of drugs to steer its
business remains a risk. The generic competition for Humira biosimilars coupled with
slowdown in aesthetic products add to the mix.
Risks
Continued headwinds of Humira patent expiry. Despite an optimistic outlook for AbbVie’s
immunology portfolio and other key products in gradually covering up Humira patent cliff, a
difficult near-term is expected for the company. A painful transition period may be ahead and
stock price may stagnate during the period.
Analyst:
Nico Chen | dbsvhk@dbs.com
Key Financial Data
Bloomberg Ticker
ABBV US
Sector
Health Care
Share Price (USD)
191.4
DBS Rating
HOLD
12-mth Target Price (USD)
188.00
Market Cap (USDb)
338.1
Volume (m shares)
4,853.1
Free float (%)
99.9
Dividend yield (%)
3.4
Net Debt to Equity (%)
1856.8
Fwd. P/E (x)
16.2
P/Book (x)
238.1
ROE (%)
88.6
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Abbvie S&P 500
(indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be
disseminated or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or
its contents. Please refer to Disclaimer found at the end of this document
US EQUITY RESEARCH
21 Jul 2025
Colgate-Palmolive Co
Moderated Growth Outlook
Company Overview
Colgate-Palmolive Company is a household and consumer products company, operating in
four product sub-segments: Oral Care (43% of total 2024 net sales); Personal
Care (18%); Home Care (17%); and Pet Nutrition (22%). The Oral, Personal and Home Care
product segment is managed geographically in five areas - North America, Latin America,
Europe, Asia Pacific and Africa/ Eurasia, accounting for 21%, 24%, 14%, 14%, and 5% of total
2024 net sales, respectively. Sales are primarily to a variety of traditional and e-commerce
retailers, wholesalers, distributors, dentists and skin health professionals. Through Hill's Pet
Nutrition, products principally sold through authorized pet supply retailers, veterinarians, and
e-commerce retailers. The company's notable brands are Colgate, Darlie, Elmex, Hello, Meridol,
Sorriso and Tom's of Maine.
Investment Overview
Global leader in oral care and growing its premium pet nutrition. Colgate-Palmolive (CL) is a
global leader in Oral care with a growing premium Pet Nutrition category, offers exposure to
resilient consumer staples categories. The company maintains consistent cashflow (of around
~USD4bn) while investing in brand and innovation, allocating ~9-10% of net sales to
advertising. 2024 volume growth was ~3% (following declines in FY22/FY23), driven by Oral
Care (~3%) and regions outside North America (~4%), including positive contributions from
Hill's pet food and Asia-Pacific. This growth stemmed from brand investments, product
innovation (premium and entry-level), advertising, pricing/mix optimization, and data
analytics/AI.
Moderation in organic sales growth projected in 2025, and already seen in 1Q25 given macro
headwinds. Organic sales growth in 2025 is likely to moderate and has been seen in its 1Q25
results. Consensus estimates for 2025 have been lowered to ~2.5% y/y (from ~4.5%), with
0.5% volume/mix and 2% pricing growth, down from prior expectations due to waning
inflationary pricing and macroeconomic uncertainty, particularly in North America. 2024
organic sales growth was stronger at ~7.4% (3.1% volume/mix; 4.4% price). Macroeconomic
and geopolitical risks, FX headwinds, and slowing North American demand (exacerbated by
tariffs under a potential Trump 2.0 administration) are weighing on growth. As of April, CL
revised its 2025 sales guidance to 2-4% (from 3-5%).
Cost-saving initiatives are expected to counter foreign exchange challenges, moderate raw
material cost increases, and elevated advertising expenses. Funding-the-growth
programmes, productivity gains, and efficiencies through automation will help offset rising
raw and packaging material costs, as well as transactional foreign exchange impacts. A
stronger gross margin will provide additional resources for brand investments and
advertising, enabling Colgate to support innovation, improve market share, and sustain top-
line growth.
Maintain HOLD call with TP at USD95. While CL has performed consistently, we anticipate
subdued 2025 growth due to geopolitical uncertainties and potential Trump 2.0 risks, despite
management's expectation of 2H25 improvement. 1Q25 results estimate a US$200mn tariff
impact on 2025 COGS. Management targets low single-digit EPS growth, with consensus at
~2%. Our TP reflects slightly lower EPS but rolls forward our valuation to average FY25/26F
EPS, based on CL's five-year historical mean PE of 24.8x. We expect a range-bound share
price given the subdued outlook.
Risks
Intensified competition leading to market share losses, higher promotional activity, volatility in
input costs, foreign exchange fluctuations, and weak macroeconomic conditions or consumer
spending.
Analyst
Andy Sim | groupresearch@dbs.com
Key Financial Data
Bloomberg Ticker
CL US
Sector
Consumer Staples
Share Price (USD)
87.24
DBS Rating
HOLD
12-mth Target Price (USD)
95.0
Market Cap (USDbn)
70.7
Volume (mn shares)
3.8
Free float (%)
99.7
Dividend yield (%)
2.3
Net Debt to Equity (%)
-
Fwd. P/E (x)
23.7
P/Book (x)
-
ROE (%)
-
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
50
60
70
80
90
100
110
120
130
140
150
Jul-21 Jul-22 Jul-23 Jul-24 Jul-25
Colgate-Palmolive S&P 500
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
EUROPE EQUITY RESEARCH
21 Jul 2025
Ryanair Holdings
Poised for growth and shareholder returns
Company Overview
Ryanair Holdings plc is an Ireland-based airline company that provides low fare passenger
airline services to destinations in Europe. It specialises in short-haul routes between secondary
and regional airports. The Company has a fleet of approximately 483 Boeing 737 aircraft, which
is operated by Buzz, Malta Air, Ryanair DAC and Ryanair U.K. It also has a fleet of 29 leased
Airbus A320 aircraft operated by Lauda. It provides various ancillary services and engages in
other activities connected with its core air passenger service, including non-flight scheduled
services, internet-related services and the in-flight sale of beverages, food, duty-free and
merchandise.
Investment Overview
Ryanair is the largest (in passenger volumes) and most competitive low-cost carrier in Europe.
Ryanair's primary competitive edge stems from its unparalleled ability to maintain costs below
those of its European low-cost counterparts, which allows the airline to offer more affordable
airfares, attracting budget-conscious travelers and ensuring high passenger load factors, and
solidifying its market position. Given its financial strength and market share gains, we anticipate
Ryanair to sustain growth rates above the industry average.
Better positioned than peers in capturing market share and defending margins. We expect
Ryanair to return to earnings growth in FY26, underpinned by a strengthening pricing
environment on constrained capacity across Europe and consolidation trends, albeit partly
offset by modest cost pressures (+1-2% unit cost). 1HFY26 pricing guidance was better than
anticipated, with Q1 fares trending 14–15% higher y/y and Q2 fares expected to rise 4–5%.
Passenger traffic is projected to grow to 206mn (+3% y/y), constrained by Boeing delays,
though the aircraft deliveries are expected to accelerate from Sep 25. Ryanair is also
unaffected by the P&W GTF engine issues vs LCC peers with network overlaps - Wizz Air and
Vueling - that will be forced to pare capacity growth.
Shareholder returns to support share price amid uncertainty of Boeing delivery delays. As of
Mar-25, the airline boasts a commanding net-cash stance of EUR1.3bn, which stands as one
of the sector's best. Ryanair announced a new EUR750mn share buyback over the next 6-12
months, in addition to its dividend policy of returning 25% of prior year adjusted profit after
tax to shareholders from FY25, with excess capital potentially returned to shareholders
through special dividends or share buybacks. These measures reflect the group's commitment
to shareholder returns, and optimism on their longer-term earnings prospects.
We rate Ryanair a BUY with a TP of EUR28.0. Our TP is based on 8.0x forward EV/EBITDA
multiple, which is its 5-year pre-pandemic average but at a significant premium to regional LCC
peers. However, we believe this premium is merited, considering Ryanair's exemplary balance
sheet, clearer roadmap to shareholder returns, and consistent ability to generate strong free
cash flow.
Risks
Macroeconomic weakness and geopolitical tensions could curb discretionary spending on
travel. Rising unemployment, coupled with slow wage growth among the general population
and higher cost of living in Europe could lead to households cutting back on travel spending.
Additionally, the escalation of the Russia-Ukraine conflict could also deter people from
travelling.
Persistent cost inflation. Sustained volatility in crude oil/jet fuel prices (though Ryanair is the
best hedged airline at 85%/36% of its FY26/27F consumption), rapid wage growth of
employees in the aviation sector, and other cost pressures could lead to earnings
disappointment.
Analysts
Tabitha Foo | groupresearch@dbs.com
Jason Sum | groupresearch@dbs.com
Key Financial Data
Bloomberg Ticker
RYA ID
Sector
Industrials
Share Price (EUR)
23.61
DBS Rating
BUY
12-mth Target Price (EUR)
28.0
Market Cap (USDbn)
29.1
Volume (mn shares)
3.2
Free float (%)
95.7
Dividend yield (%)
1.9
Net Debt to Equity (%)
-18.2
Fwd. P/E (x)
12.1
P/Book (x)
3.6
ROE (%)
22.0
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
EUROPE EQUITY RESEARCH
21 Jul 2025
TotalEnergies
Production growth supporting robust shareholder return potential
Company Overview
TotalEnergies (Total) is among the largest oil and gas companies in the world and considered
a leader in decarbonisation among the oil majors. In 2024, Total produced 1.3mmbpd of oil,
1.1mmboepd of natural gas and liquids, 1.5mmbpd of refined fuels, and also had a 21.5GW
net installed power capacity (70% renewables). Key segments – Exploration & Production,
Integrated LNG, Refining & Chemicals and Integrated Power - contributed approx. 49%, 24%,
10% and 10% to operating profit respectively.
Investment Overview
Leading the pack in energy transition. Total has been ahead of the curve in diversifying its
energy mix to adapt to energy needs of the future. The key indicator to progress will be taming
Scope 1+2 emissions by 40% by 2030, compared with 2015 levels. Total will have a balanced
multi-energy strategy and plans to spend around one-third of its capex in low carbon
businesses, particularly capacity expansion in renewable segment, with a goal to produce
more than 100TWh/ year by 2030 (2024: 26TWh), and rank among the top five global
renewable players (solar + wind). This will be complemented with flexible gas-fired and storage
assets to improve reliability. In addition, Total is also investing in low-carbon molecules:
biofuels and biogas, as well as hydrogen and its derivatives: e-fuels and Sustainable Aviation
Fuel (SAF).
Exposure to LNG market proves structurally beneficial. Total is currently the #2 private player
in the LNG market globally, highly leveraged to natural gas as the transition fuel in the energy
evolution. It aims to boost its LNG sales by 2x from 2019 to 2030, leveraging on its unique
integrated LNG position, where it has production portfolio in emerging areas like Cameroon,
Nigeria, Mozambique, Papua, Yemen and others in addition to the US. With spot LNG prices
expected to be at high levels for years as EU transitions away from its dependence on Russian
gas, Total is well-positioned to benefit from its spot LNG exposure, as well as oil-indexed
contracts that benefit from elevated oil prices.
Implementation of multi-energy strategy for sustainable growth. Total's focus on diversifying
away from the oil market in the longer term may lead to concern on growth and returns profile,
but Total's relatively high ESG scores are testament to its leadership in the clean
transformation, while delivering ROE close to 15%, which compares favourably with peers.
Near term, we are still looking at hydrocarbon growth despite reduced capex guidance of
USD17.0–17.5bn (40% for new oil & gas projects and USD4.5bn for low carbon) for 2025. In
2024, Total took FID of four major oil projects (Suriname, Brazil, Angola) and the Marsa LNG
FID in Oman, which is expected to anchor c.3% production growth to 2030. For 2025, Total
expects a 5% increase in overall energy production, combining hydrocarbon and electricity
production.
We have a BUY call on Total with a TP of EUR58, based on 1.2x FY25 P/BV, in line with 0.5
standard deviation (SD) above mean. This is probably on the conservative side, compared to
its justified P/BV of 1.6x on the back of projected ROE of c.14% in the near term. Dividend yield
is healthy at over 6% as management remains committed to shareholder returns in excess of
40% of Operating Cash Flows. In 1Q25, Total declared dividend of EUR0.85 per share (+7.6%
y/y) and has decided to continue buybacks at unchanged pace of USD2bn per quarter, which
should provide support to share price.
Risks
Price fluctuations in oil and gas prices remain the biggest risk for Total's earnings performance
and dividend payout. Exposure to Russian assets is a concern, and led to around USD15bn
writedowns in 2022. Total also stands to lose production from minority interests in upstream
assets in Russia. Total has exposure to India’s controversial Adani Group and investments in
India have thus seen delays.
Analyst
Suvro Sarkar | groupresearch@dbs.com
Key Financial Data
Bloomberg Ticker
TTE FP
Sector
Energy
Share Price (EUR)
52.97
DBS Rating
BUY
12-mth Target Price (EUR)
58.0
Market Cap (USDbn)
140.3
Volume (mn shares)
3.6
Free float (%)
93.1
Dividend yield (%)
6.1
Net Debt to Equity (%)
14.5
Fwd. P/E (x)
8.8
P/Book (x)
1.2
ROE (%)
11.8
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
CH/HK EQUITY RESEARCH
18 Jul 2025
CNOOC Ltd
Boasting superior cost control
Company Overview
CNOOC Ltd is an investment holding company principally engaged in exploration,
development, production and sale of crude oil and natural gas. The Company operates its
businesses through three segments. Exploration and Production (E&P) segment is mainly
engaged in the exploration and production of conventional oil and gas, shale oil and gas, oil
sands and other unconventional oil and gas. Trading Business segment is mainly involved in
import and export and crude and gas. Corporate segment is mainly involved in technology
development, asset management, product sales and other businesses. The Company
conducts its businesses in the domestic market and overseas markets, including Asia, Africa,
North America, South America, Oceania and Europe.
Investment Overview
Best-in-class O&G giant with a green portfolio. As the largest offshore E&P company in China,
CNOOC has a very competitive all-in cost of ~USD27/bbl. Coupled with its steady growth
strategy and superior execution, CNOOC is highly regarded as one of the best oil price proxies.
The Group is also stepping up ESG initiatives, committing to spend 10% of capex in clean
energy assets – particularly offshore windfarms.
Promising output growth, attractive dividend. In its 2025 strategy preview, CNOOC expected
production to grow 6-8% to 760-780mmboe in 2025 and a three-year rolling growth target of
~5%. The stock also offered a very attractive dividend yield of 7%. Management has committed
to pay out of at least 45% during 2025-2027.
Highly correlated to oil price. CNOOC’s share price closely tracks oil prices, with a strong
correlation coefficient of 0.9. The potential unwinding of OPEC+’s 2mmbpd production cuts
could dampen sentiment and weaken oil price outlook in 2025. This would in turn limit further
upside to CNOOC’s share price.
Maintain BUY with TP of HKD20.50, based on a DCF valuation (11% WACC, 0% terminal growth).
The current valuation is undemanding at a 6x FY25F PE and 1x P/BV against a 17-18% ROE
and 7% dividend yield. We believe the stock has priced in the bearish sentiment on oil prices,
which could improve with China’s stimulus and the de-escalation of trade wars. We expect the
stock to regain some ground from the current level, supported by share buyback exercise and
attractive dividend yield, with escalation in geopolitical tensions as a wild card.
Discounted Cash Flow (DCF). We value CNOOC based on discounted cash flow (DCF) assuming
11% weighted average cost of capital (WACC), 0% terminal growth, and long-term oil price
assumption of US$65/bbl. The stock remains inexpensive, trading at 1x FY25 PB and 6x FY25F
PE.
Relative Valuation. CNOOC deesrves to trade at premium to peers given its stronger execution
track record, earnings delivery and growth potential.
Risks
Oil price volatility is the key risk. CNOOC’s earnings is sensitive to oil prices, which would be
dictated by output by the Organization of the Petroleum Exporting Countries (OPEC) and the
US in the near term.
Analyst
Pei Hwa HO | peihwa@dbs.com
Key Financial Data
Bloomberg Ticker
883 HK
Sector
Energy
Share Price (HKD)
18.24
DBS Rating
BUY
12-mth Target Price (HKD)
20.50
Market Cap (USDb)
114.2
Volume (m shares)
62,909.2
Free float (%)
35.4
Dividend yield (%)
7.8
Net Debt to Equity (%)
CASH
Fwd. P/E (x)
5.9
P/Book (x)
1.1
ROE (%)
19.5
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS HK
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
250
300
350
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Cnooc HSI Index
(indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
CH/HK EQUITY RESEARCH
18 Jul 2025
Cathay Pacific
Gliding through turbulent trade winds
Company Overview
Cathay Pacific Airways Ltd is a company mainly engaged in the provision of international
passenger and cargo air transportation. Together with its subsidiaries, the Company
operates business through its four operating segments. The Cathay Pacific and Cathay
Dragon segment provides full service international passenger and cargo air transportation
under the Cathay Pacific and Cathay Dragon brands. The Air Hong Kong segment provides
express cargo air transportation offering scheduled services within Asia. The HK Express
segment provides a low-cost passenger air transportation offering scheduled services
within Asia. The Airline Services segment provides supporting airline operations services
include catering, cargo terminal operations, ground handling services and commercial
laundry operations.
Investment Overview
Premium network carrier with an enviable position in one of Asia’s leading aviation hubs. CX’s
broad global network, coupled with its strategic hub in Hong Kong (which serves as a gateway
to China and is advantageously located between Asia and other regions), enables the group
to effectively capture a vast customer base. The ongoing development of the Greater Bay
Area further augments CX’s advantage, promising to enhance connectivity between the
region and Hong Kong, thereby substantially expanding the airline’s catchment area.
Additionally, CX has a strong reputation for providing high-quality service and a popular
loyalty programme, which has helped the group build a significant presence in the
corporate travel market as well as retain customers.
Anticipate steady earnings growth over the next two years despite pricing pressure and cargo
headwinds. We expect CX to achieve an 8% CAGR in core net profit over FY24–26F, driven by
a recovery in passenger traffic, lower ex-fuel unit costs and jet fuel prices, and increased
contribution from Air China at the associate level. This comes despite further moderation in
passenger yields, still above pre-pandemic levels, as supply-demand dynamics continue to
normalise. We also factor in the effects of an evolving network mix (a higher proportion of
lower yielding transit traffic) and drag from the air cargo segment amid elevated trade
tensions.
Attractive valuation on a promising earnings outlook; solid dividend yield to support the
share price. We view CX’s current valuation of 4.3x EV/EBITDA (FY25F) as undemanding, as
the group is trading at about 1.5 standard deviations below its five-year pre-COVID-19
average and at a discount to regional peers (5.4x), despite its favourable earnings outlook.
Furthermore, we believe CX’s 6–7% dividend yield should help limit share price downside.
Maintain BUY with higher TP of HKD12.2. Our TP is based on 4.7x forward EV/EBITDA, close to
1SD below its five-year pre-pandemic average.
Risks
Macroeconomic headwinds or intense competition could curb CX’s passenger traffic growth
and suppress yields, manpower shortages could hinder capacity addition, and elevated jet
fuel prices could impede margin expansion.
Analysts
Tabitha FOO | tabithafoo@dbs.com
Jason SUM, CFA | jasonsum@dbs.com
Key Financial Data
Bloomberg Ticker
293 HK
Sector
Industrials
Share Price (HKD)
11.96
DBS Rating
BUY
12-mth Target Price (HKD)
12.20
Market Cap (USDb)
9.8
Volume (m shares)
8,911.7
Free float (%)
15.0
Dividend yield (%)
5.8
Net Debt to Equity (%)
1.1
Fwd. P/E (x)
8.2
P/Book (x)
1.5
ROE (%)
18.7
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Cathay Pacific Airway
HSI Index
(indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be
disseminated or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this
document or its contents. Please refer to Disclaimer found at the end of this document
CH/HK EQUITY RESEARCH
18 Jul 2025
HSBC Holdings
Strong fee income growth
Company Overview
HSBC Holdings plc (HSBC) is a banking and financial services company. Its business segments
include Hong Kong, UK, Corporate and Institutional Banking (CIB), and International Wealth
and Premier Banking (IWPB). Its Hong Kong business comprises retail banking and wealth and
commercial banking of HSBC Hong Kong and Hang Seng Bank. Its UK business comprises UK
retail banking and wealth (including first direct and M&S Bank) and UK commercial banking,
including HSBC Innovation Bank. The CIB segment is formed from the integration of its
commercial banking business (outside the UK and Hong Kong) with its global banking and
markets business. The IWPB segment comprises premier banking outside of Hong Kong and
the UK, its global private bank, and its asset management, insurance and investment
distribution businesses. Its customers worldwide through a network covering 58 countries and
territories. Its customers range from individual savers and investors to companies,
governments and others.
Investment Overview
Strong fee income growth. HSBC saw strong fee income growth in 1Q25, as 1) FX-related
revenue increased by USD0.3bn, or 22% y/y, as volatility drove higher volumes and demand
for hedging solutions; and 2) wealth income grew c.23% y/y to USD2.3bn. Looking ahead, we
expect the strong growth momentum to continue, driven by HSBC’s competitive advantage as
a global bank with a wide product range. In 1Q25, HSBC added 301k new-to-bank customers
and USD22bn in net new invested assets in HK, positioning it for future wealth fee income
growth.
Revised up FY26/27F revenue assumption by c.4% to factor in the strong fee income growth
momentum. We expect HSBC to continue to deliver double-digit growth in wealth fee income
in FY25-27F, making wealth management the main growth driver during the rate cut cycle and
anticipated weakness in net interest income (NII). We have revised up our credit cost
assumptions slightly to 38-40bps for FY25-27F to reflect higher uncertainty associated with US
tariffs while our cost assumptions are largely unchanged.
Sustainable ROTE to support shareholder returns. Given the positive outlook for FY25-27F
earnings growth, we assume a 15%-16% return on tangible equity (ROTE, excluding notable
items) for FY25-27F. Additionally, HSBC has announced USD3bn in share buybacks in its 1Q25
results. We expect HSBC to maintain a reasonable level of share buybacks during FY25-27F,
supported by its sustainable earnings. We view this as a key share price catalyst for the stock.
Reiterate BUY with TP unchanged at HKD98.7. Our TP is based on the DDM model, with
unchanged assumptions of 10.4% COE, 15% ROTE, and 0% terminal growth. Our TP implies
1.18x FY25F P/BV, which is +2SD above its five-year average of 0.8x. We expect the high ROTE
visibility to further support a re-rating. The stock continues to offer attractive shareholder
returns with a dividend yield of >5.5% for FY25F.
Risks
Geopolitical risks, global economic slowdown due to US tariff-related impacts, and operational
efficiency being lower than expected.
Analysts
Manyi Lu | manyilu@dbs.com
Ken Shih | kenshih@dbs.com
Key Financial Data
Bloomberg Ticker
5 HK
Sector
Financial
Share Price (HKD)
97.65
DBS Rating
BUY
12-mth Target Price (HKD)
98.70
Market Cap (USDb)
217.0
Volume (m shares)
9256.6
Free float (%)
99.9
Dividend yield (%)
7.0
Fwd. P/E (x)
10.8
P/Book (x)
1.2
ROE (%)
14.8
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS HK
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
250
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Hsbc Holdings HSI Index
(indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
SINGAPORE EQUITY RESEARCH
22 Jul 2025
Keppel Infrastructure Trust
Cash flows not as predictable as before
Company Overview
Keppel Infrastructure Trust is a business trust. The Company's principal objective is to invest in the
infrastructure assets and to provide unitholders with distributions. The Company’s segments include
Distribution & Network, Waste & Water, Energy, and Corporate. The Distribution & Network focuses
on the production and retailing of town gas and retailing of natural gas in Singapore, operator of
subsea electricity interconnector in Australia, supplying and distributing water treatment chemicals,
industrial and specialty chemicals and storage of petroleum products. The Company’s Water & Waste
segment includes concessions in relation to the desalination plant, water treatment plant and waste-
to-energy plants in Singapore. The Energy segment is engaged in tolling arrangement for the power
plant in Singapore. Its Corporate segment includes investment holding, asset management and
business development. Keppel Infrastructure Fund Management Pte. Ltd. is the Trustee-Manager of
the Company.
Investment Overview
Exposure to diverse infrastructure segments with growing focus on renewables.
KIT’s strategy is
leveraged to investing in sustainability-linked infrastructure, a secular growth trend. With a portfolio
AUM of c.SGD9.0bn, KIT has a presence in mostly mature investment grade jurisdictions in the
region. The renewable energy portfolio constitutes around 19% of AUM currently, and KIT targets to
grow the portfolio to 2GW of renewables capacity by 2030.
Inorganic push supports cash flow sustenance.
KIT has completed a significant line up of deals in
recent years to balance the mix of evergreen assets versus fixed life concession assets and thereby
extend the life of cash flows. To keep gearing in check, KIT has successfully completed a SGD400m
fund raise in 2024, following a SGD300m equity fund raising exercise in FY23. Larger share base
limits DPU growth though. Meanwhile, the Trust can also divest assets like Philippine Coastal to lock
in gains and redeploy capital.
Distributions not affected by economic cycles, but predictability has come down a notch.
KIT’s
portfolio comprises critical infrastructure assets, which are not typically impacted by tariff wars or
economic downturns, and costs can be mostly passed through. Exposure to interest rate hikes is not
a big worry but effective interest rate has been creeping up in line with the Fed hike cycle. With
exposure to diverse assets, the predictability of the Trust’s cash flows has gone down though, after
factoring in cash flow timing issues, seasonality and higher capex requirements.
Lacking upside catalysts at this point.
After factoring in higher Trust expenses and higher cost of
capital amid uncertain macro environment, our DDM-based valuation is revised down to SGD0.45
per share. The Trust is currently trading at a healthy yield of around 10%, following weak share price
performance YTD in 2025. KIT needs to inspire more confidence in its ability to generate sufficient
cash flows to sustain distributions, before we see re-rating possibilities.
Risks
(i)plants not meeting availability thresholds owing to operational issues, (ii) increasing debt
refinancing risks for the asset portfolio as the assets age, and (iii) exposure to increases in inflation
and interest rates hikes.
Analyst
Suvro SARKAR | suvro@dbs.com
Key Financial Data
Bloomberg Ticker
KIT SP
Sector Utilities
Share Price (SGD)
0.430
DBS Rating HOLD
12-mth Target Price (SGD) 0.45
Market Cap (USDbn)
2.04
Volume (mn shares)
6.2
Free float (%)
73.8
Dividend yield (%) 9.1
Net Debt to Equity (%) 1.3
Fwd. P/E (x)
66.5
P/Book (x) 2.8
ROE (%)
3.2
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
64
74
84
94
104
114
124
134
144
64
74
84
94
104
114
124
134
144
Jul-21 Jul-22 Jul-23 Jul-24 Jul-25
Relative Index
SGD
Keppel Infrastructure Trust STI
(Indexed)
The full report and disclaimers are accessible here:
DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated
or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents.
Please refer to Disclaimer found at the end of this document
US EQUITY RESEARCH
18 July 2025
Taiwan Semiconductor Manufacturing Co Ltd
Strengthening its Position as Industry Leader
Company Overview
TSM is the world’s leading semiconductor foundry company. The company provides wafer
manufacturing, wafer probing, assembly and testing, mask production and design services.
TSMC’s products are used in computer, communication, consumer electronics, automotive
and industrial equipment industries. The foundry business model adopted by TSMC means
that the company does not design, manufacture, or market any products under its own name
and thereby guarantees its customers that it will never compete with them. TSMC commanded
c. 67% share of the foundry market in 2024.
Investment Overview
Technology leadership to stay. TSM possesses a wide economic moat stemming from its
technological edge. It has been at the forefront in providing next-generation, leading-edge
process technologies (3nm or below) accounting for 6% of its revenue vs 0% for UMC and 0%
for SMIC in FY23. The gap with the next player in the race looks set to widen as it accelerates
R&D expenses and capex in the next few years. The high technological barrier will sustain
TSM’s leadership, sharpen its cost competitiveness, enhance returns to investors and better
weather the industry cyclicality.
Relentless longer-term growth; strong pricing power. Following a decline in FY23 due to
macroeconomic challenges, TSM's earnings returned to growth in 2024 and are projected to
continue expanding into 2025.The longer-term growth trend is driven by capacity and margin
expansion on the back of long-term favourable industry trends – rising semiconductor content
underpinned by rapid growth of AI, 5G, IoT and EVs, and increase in Integrated Device
Manufacturers’ (IDMs) outsourcing, as well as commercialisation of higher value advanced
nodes.
Strategic partnerships. TSM has cultivated strong relationships with leading semiconductor
designers such as Apple, Qualcomm, and NVIDIA. This, coupled with its partners' market-
leading product development, ensures a stable and growing customer base, supporting
consistent demand for its products. On the other hand, TSM has been looking to further
expand beyond Taiwan to places such as the US, Europe, and Japan. This expansion is also
expected to be supported by subsidies offered by the host countries, which are looking at
reducing their dependence on China. Diversifying its operational locations could help TSM
withstand climate, talent shortage, and political tensions between Taiwan and China, ensuring
a smoother long-term growth.
We have a BUY recommendation on TSM with a TP of TWD 1,620 per share (USD276 per ADR).
Our TP is based on 8.0x forward PB, c.3 S.D. above its historical average, reflecting its market-
leading earnings growth profile. TSM’s share price has done relatively well in 2024, benefitting
from rising end-demand for Gen AI and smartphones. We believe the preference towards
industry leaders like TSM will continue as they tend to better weather industry cyclicality and
leverage on industry secular uptrend in the longer run. We also expect its steady growing
dividend to secure a stable shareholder return source.
Risks
Change in industry dynamics, loss of competitive advantage. Global consumer demand,
utilisation and ASP trends head south; loss of its leadership in cutting-edge chips; geopolitical
risks – US/China and China/Taiwan tensions.
Analyst:
Jim Au | dbsvhk@dbs.com
Key Financial Data
Bloomberg Ticker
TSM US
Sector
Information
Technology
Share Price (USD)
245.6
DBS Rating
BUY
12-mth Target Price (USD)
276.00
Market Cap (USDb)
1273.8
Volume (m shares)
27,395.7
Free float (%)
n.a.
Dividend yield (%)
0.9
Net Debt to Equity (%)
-12.7
Fwd. P/E (x)
24.6
P/Book (x)
n.a.
ROE (%)
24.6
Closing Price as of 17 Jul 2025
Source: Bloomberg, DBS
Indexed Share Price vs Composite Index Performance
Source: Bloomberg
0
50
100
150
200
250
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Taiwan Semicon.Spn.Ad
S&P 500
(indexed)
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