SINGAPORE: If you’re looking to invest in the new year, here are some companies to watch as they show strong potential for growth and returns in 2025, according to The Smart Investor.
1. iFAST Corporation Limited
iFAST Corporation is a fintech company that provides a platform for trading unit trusts, equities, and bonds. The firm delivered a strong performance in the first nine months of 2024 (9M 2024), boosted by contributions from its Hong Kong ePension contract.
Net revenue surged 75.5% from the previous year to S$183.5 million, while operating profit almost tripled to S$60.1 million. Net profit also increased from S$15.1 million to S$47.4 million during the same period.
iFAST recorded net inflows of S$2.3 billion, pushing its assets under administration to a record S$23.62 billion. The group declared a quarterly interim dividend of S$0.015, a 15% increase compared to S$0.013 a year ago.
Management anticipates that the ePension division will play a key role in driving growth through 2024 and 2025, alongside steady progress in its core wealth management platform.
Meanwhile, iFAST Global Bank, the group’s digital banking arm, reported customer deposits more than doubling year on year to S$805.63 million as of Sept 30, 2024. The digital bank is also expected to be a growth contributor from 2025 onwards.
2. DBS Group
DBS Group, Singapore’s largest bank by market capitalisation, saw strong performance in 2024, supported by higher interest rates boosting its net interest income, alongside strong consumer spending that helped increase non-interest income.
For 9M 2024, total income grew 11% YoY to S$16.8 billion, driven by a 5% YoY increase in net interest income. Non-interest income also rose 27% YoY to S$3.2 billion.
Net profit reached a record S$8.8 billion, up 12% from the previous year, while return on equity stood at 18.8%. DBS raised its quarterly dividend by 22.7% YoY to S$0.54.
CEO Piyush Gupta expects non-interest income to continue growing in the high single digits in 2025, with net interest income remaining stable at 2024 levels.
Pre-tax profit is expected to stay in line with 2024 figures, though net profit may be lower due to the global minimum tax rate of 15%.
3. Singapore Technologies Engineering
Singapore Technologies Engineering (STE), a global technology and engineering firm, posted a 14% YoY revenue growth to S$8.3 billion for 9M 2024. The increase was broad-based across its three divisions.
During the same period, STE secured S$8.3 billion in new contracts, bringing its order book to S$26.9 billion as of September 2024. Of this, S$2.6 billion is expected to be completed by the end of 2024, with the remaining recognised in 2025.
CEO Vincent Chong aims to grow STE’s revenue beyond S$11 billion by 2026. The company will host an Investor Day meeting next year to share its targets, hoping investors will recognise the firm as a growth and yield stock.
STE currently pays a quarterly dividend of S$0.04, equating to an annual dividend of S$0.16 per share.
4. Keppel DC REIT
Keppel DC REIT owns 23 data centres across 10 countries, with assets under management (AUM) reaching S$2.3 billion as of Sept 30 2024.
The REIT has performed well this year, maintaining an occupancy rate of 97.6% in the third quarter of 2024 (3Q 2024). Despite a loss provision for its Guangdong data centres, its financials remain strong.
For 3Q 2024, gross revenue grew 8.9% YoY to S$76.9 million, while distribution per unit increased slightly to S$0.02501.
In late November, Keppel DC REIT announced the acquisition of two data centres from its sponsor, Keppel Ltd. This deal will boost yields and reduce gearing, allowing the REIT to take on more debt.
Post-acquisition, aggregate leverage will drop to 33.3%, providing room for future acquisitions from its sponsor or other sources.
The two new data centres are expected to bring rental uplifts and capacity growth due to strong demand and limited supply. /TISG
Read also: 3 Singapore blue-chip stocks to add to your buy watchlist for their growing profits
Disclaimer: This article is for educational purposes only. It should not be considered Financial or Legal Advice. Investors should conduct their own due diligence before making major financial decisions
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