Industrial developer Soon Hock likely to benefit from S$1 billion earnings pipleline: UOB KayHian

UOB also expects attractive dividend yields of 5.5 per cent and 10 per cent for 2025, 2026

UOB Kayhian initiated coverage on industrial property developer Soon Hock Enterprise (SHE) with a buy rating, citing a strong track record and “strong earnings visibility” from a S$1 billion pipeline.

It gave the stock a target price of S$0.68, implying an upside of around 15 per cent. It last traded at S$0.59 on Monday.

“After a lull in 2024 due to the absence of project Temporary Occupation Permits (TOP), earnings are poised to rebound strongly,” said the brokerage in a Monday (Dec 1) note.

It said the industrial developer’s growth outlook is supported by a robust pipeline of four active projects with a combined gross development value of about S$1 billion

They include Stellar@Tampines which achieved strong pre-sales, and Skye@Tuas, which will be Singapore’s first industrial project to provide EV truck-charging facilities.

UOB Kayhian said these two 30-year leasehold projects underpin a three-year revenue compound annual growth rate (CAGR) of 178% and net profit CAGR of 124% over the 2024-27 period.

It added that strong pre-sales and the redevelopment of 20 Shaw Road “extend growth visibility” beyond 2027.

SHE specialises in industrial property development and investment in Singapore. It has delivered more than 1,200 strata-titled units across Singapore. UOB Kayhian said the developer has sold over 900 strata-titled units with total gross development value exceeding S$1 billion, placing it among Singapore’s top five developers by gross floor area, with a 6 per cent market share.

It debuted on the mainboard of the Singapore Exchange (SGX) on Oct 16 with an IPO price of S$0.58.

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UOB Kayhian also noted the company’s management has committed to a minimum 25 per cent dividend payout ratio for 2025 and 2026, translating into estimated attractive yields of 5.5 per cent and 10 per cent respectively.

“SHE has expressed a clear commitment to rewarding shareholders after listing,” it said.

The brokerage said the stock is a beneficiary of policy tailwinds.

“SHE is well-positioned to capitalise on Singapore’s industrial upgrading, supported by initiatives like Tuas Mega Port and Changi T5,” it said. “Its projects in Tuas, Tampines and Woodlands are aligned with Singapore’s industrial zoning roadmap, ensuring resilient end-user demand and high tenant retention.”

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