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Hong Leong Asia closes up 2.9% as UOBKH lifts target price on H1 earnings, data-centre exposure

Hong Leong Asia closes up 2.9% as UOBKH lifts target price on H1 earnings, data-centre exposure

By Swedan Margen

Fashion

Hong Leong Asia shares rose on Thursday (Sep 18) after UOB Kay Hian (UOBKH) lifted its target price for the counter earlier this week.

As at 1.09 pm, the stock was up at S$2.50. This was 4.6 per cent or S$0.11 above Wednesday’s closing price of S$2.39, with around 2.5 million shares changing hands.

The counter closed up 2.9 per cent or S$0.07 at S$2.46 on Thursday with 3.7 million shares traded.

This comes as UOBKH raised its target price for Hong Leong Asia to S$2.82 from S$2.63 in a Monday report, while maintaining its “buy” call on the counter.

The report noted that the company’s valuation multiples “appear inexpensive” and cited “potential upside” to its distribution per share forecast of S$0.05 for 2025.

It pointed to the company’s first-half FY2025 earnings beating that of peers.

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On Aug 12, Hong Leong Asia posted a 13.1 per cent rise in net profit to S$56 million for H1 ended Jun 30, 2025, from S$49.5 million in the year-ago period.

It attributed the bottom-line growth to the strong performance of its subsidiary Yuchai and higher precast concrete volumes.

UOBKH highlighted that the company’s data-centre exposure is a potential “engine for growth”.

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Hong Leong Asia's revenue for H1 rises 25.7% to S$2.8 billion, from S$2.3 billion a year earlier.
Hong Leong Group executive chairman Kwek Leng Beng (left) with Shanghai party secretary Chen Jining on Sep 9.

This comes as the global total addressable market for data-centre generators could grow from a US$7.6 billion to US$9.2 billion range in 2025, to between US$12 billion and US$17 billion by 2033 to 2034, the report said.

Moreover, the brokerage remarked that Hong Leong Asia could benefit from positive tailwinds driven by government spending on infrastructure and public housing.

It highlighted the S$19.6 billion of funds earmarked by the Singapore government for infrastructure spend in Budget 2025, and the Housing & Development Board’s increased target for Build-To-Order flat launches between 2025 and 2027, which the board raised from 50,000 units to 55,000 units.

Originally published by businesstimes.com.sg. Syndicated material does not necessarily reflect the views of Grazia British.

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