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Singapore Airlines Ltd (SIA SP): Poised for growth

• RE-ITERATE BUY Entry – 6.4 Target– 7.2 Stop Loss – 6.0
  
• Singapore Airlines Limited provides air transportation, engineering, pilot training, air charter, and tour wholesaling services. The Company’s airline operation covers Asia, Europe, the Americas, South West Pacific, and Africa.
  
• Jet fuel price to remain low. The jet fuel market is expected to maintain relatively low prices in early 2025, continuing the trend from late 2024. The International Air Transport Association (IATA) projects an average jet fuel cost of US$87/bbl, or US$2.0714/gal, with total fuel expenditures expected to drop to US$248 billion nearly 5% lower than in 2024. While refinery disruptions could temporarily impact prices, overall stability is expected. Additionally, fuel costs are projected to comprise 26.4% of total airline expenses, down from 28.4% in 2024, contributing to improved profitability for airlines. As of the week ending 31 January 2025, the global average jet fuel price fell 3.0% compared to the week before to US$94.93/bbl.
  

Jet Fuel Price Trend

(Source: IATA)

• SIA to Benefit from Changi Airport’s Growth in 2025. Changi Airport is on track for continued growth in 2025 after handling 67.7 million passengers in 2024, reaching 99.1% of pre-pandemic levels. With a projected 3%-5% increase in passenger traffic this year, the airport is set to capture a larger share of regional aviation growth, supported by strong demand, new routes, and airline expansions. Ongoing S$3 billion infrastructure upgrades will further enhance its position as a leading global hub. Singapore Airlines (SIA) is well-positioned to benefit from Changi’s expansion, particularly through transit traffic growth, which is expected to offset softer visitor arrivals. As competition among regional hubs intensifies, SIA’s strategic expansion, premium offerings, and focus on transit passengers will help strengthen its market position. The airline’s efficient hub operations, strong brand, and expanding long-haul network will reinforce its leadership in the Asia-Pacific aviation market.
  
• Scoot Expands European Network with New Vienna Route. Scoot, the low-cost subsidiary of Singapore Airlines Group, will launch direct flights between Singapore and Vienna starting June 3rd, operating three times weekly on Boeing 787-8 Dreamliners. Vienna will become Scoot’s second European destination after Athens, further expanding its footprint in the region. To optimize network efficiency, Scoot will suspend services to Berlin, which were previously operated via Athens. The new Vienna route reflects the airline’s strategy to adjust capacity based on demand, while maintaining connectivity between Singapore and key European cities.
  
• 1H24 results review. Revenue rose S$335 million, a 3.7% YoY increase to S$9,497 million, with passenger flown revenue up S$118 million and cargo flown revenue higher by S$42 million. Increased competition and higher passenger capacity in key markets exerted pressure on yields, which fell 5.6%. On the cargo front, yield was 13.4% lower amid the continued recovery in bellyhold capacity. The demand for air travel remained healthy in the first six months, with SIA and Scoot carrying 19.2 million passengers, a 10.8% YoY increase. However, passenger traffic growth of 7.9% trailed the SIA Group’s passenger capacity expansion of 11.0%, resulting in a 2.4 percentage point decline in Group passenger load factor (PLF) to 86.4%. SIA and Scoot achieved PLFs of 85.7% and 88.6% respectively. The Group posted a net profit of S$742 million, a 48.5% YoY decline, primarily due to the weaker operating performance.
  
• Market Consensus.
  

(Source: Bloomberg)

Oversea-Chinese Banking Corp Ltd. (OCBC SP): Positive U.S. sentiments to extend into Singapore

• RE-ITERATE BUY Entry – 17.3 Target– 18.9 Stop Loss – 16.5
  
• Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services. The Company’s services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.
  
• Positive sentiment from the US banks. Despite the drag from declining interest rates on net interest income, U.S. banks posted strong FY24 results, driven by a rebound in Wall Street dealmaking. Investment banking revenue surged, with the largest banks reporting year-over-year increases of 25% or more. While interest rates remain elevated amid economic uncertainty, optimism around dealmaking persists. Major consulting firms, including PwC and EY, anticipate continued growth in U.S. M&A activity. EY-Parthenon’s macroeconomic outlook projects a 10% rise in M&A activity in 2025, building on an expected 13% increase in 2024. This momentum is expected to continue as election-related uncertainty fades, economic conditions remain strong, and interest rates trend lower. The heightened level of dealmaking is likely to benefit U.S. banks throughout 2025, with positive sentiment also extending to Singapore’s banking sector.
  
• Partnership with XTransfer. OCBC has partnered with XTransfer to offer SMEs engaged in international trade seamless, one-stop cross-border financial solutions. The collaboration will leverage OCBC China’s extensive regional network, targeting key markets such as Singapore, Hong Kong SAR, Malaysia, and Indonesia. Through this partnership, SMEs will gain access to integrated services, including payment solutions, foreign exchange (FX), risk management, and wealth management. By expanding available payment methods and currencies, the initiative aims to facilitate cross-border trade and support SME growth in the global marketplace. This strategic alliance is expected to drive higher transaction volumes while strengthening OCBC’s regional presence.
  
• Collaboration with Disney. OCBC and Disney have announced a five-year strategic partnership across Singapore, Malaysia, and Indonesia, aimed at significantly increasing OCBC’s new customer base in Southeast Asia by 2029. The collaboration includes the launch of the OCBC MyOwn Account for children aged 7-15, allowing them to manage their own accounts under parental supervision via the OCBC app. The partnership will also feature Disney-themed bank cards, financial literacy materials with Disney characters, and related merchandise by mid-2025. OCBC highlighted that the partnership will help attract new customers by offering unique, non-price-based products and services.
  
• 3Q24 results review. Total income for 3Q24 increased by 10.8% YoY to S$3.80bn, driven by robust non-interest income growth and lower allowances, compared to S$3.43bn in 3Q23. Net interest income fell by 0.9% YoY and non-interest income rose by 40.7% YoY. Increased wealth management activities lifted fee and trading income, with insurance income higher as well. Net profit increased by 9.1% YoY to S$1.97bn in 3Q24, compared to S$1.81bn in 3Q23.
  
• Market Consensus.
  

(Source: Bloomberg)

Lenovo Group Ltd. (992 HK): Happy Lunar New Year Shopping

• BUY Entry – 11.3 Target – 12.7 Stop Loss – 10.6
  
• Lenovo Group Ltd is an investment holding company primarily engaged in development, manufacture and marketing of technology products and services. The Company operates its business through three segments. The Intelligent Devices Group segment is engaged in the manufacture and sale of personal computer (PC), tablet, smartphone and other smart devices. The Infrastructure Solutions Group segment is engaged in the provision of artificial intelligence (AI) products, services and partnerships, the development of comprehensive full-stack infrastructure solutions portfolio as well as the provision of storage solutions. The Solutions and Services Group segment is engaged in the provision of information technology (IT) solutions and services across PC, infrastructure, and smart verticals, including attached services, managed services and As a Service (AaS) offering. The Company conducts its business in the domestic and overseas markets.
  
• China’s Retail Subsidies Fuel Lunar New Year Shopping Surge. China’s expanded trade-in subsidy program is driving a surge in consumer electronics sales ahead of the Lunar New Year. Earlier this year, the government extended its national trade-in initiative to include smartphones, tablets, and smartwatches. The Ministry of Commerce (MOC) reported receiving subsidy applications for 10.79mn electronic devices over just four days starting January 20. Retail data from Suning.com, one of China’s largest home-appliance chains, shows smartphone sales in Shanghai have jumped over 90% YoY since January 20, while tablet sales surged more than 200%. This surge in consumer spending is likely to have benefited Lenovo, particularly in its PC and smart device segments.
  
• Lenovo to Launch World’s First ‘Rollable’ Laptop in March. Lenovo announced plans to launch the world’s first laptop with an expanding rollable display in March, pricing it at $3,499. The ThinkBook Plus Gen 6 Rollable features a 14-inch display that extends into a nearly 17-inch portrait-oriented screen, offering enhanced flexibility for professionals. The laptop integrates Microsoft’s Copilot+ AI technology and other AI-driven tools, catering to business travelers seeking a larger, yet compact, display with advanced productivity features. Measuring 19.9mm in thickness and weighing just 1.7kg, the device strikes a balance between portability and functionality.
  
• Lenovo Acquires Infinidat, Expands Enterprise Storage Business. Lenovo has announced the acquisition of Israeli enterprise storage company Infinidat, marking its first investment in Israel. As part of the deal, Lenovo will establish a development center in the country, reinforcing its market presence in the region. The acquisition strengthens Lenovo’s enterprise storage portfolio, particularly in the entry and mid-range segments, while enhancing its ability to drive innovation in computing and storage convergence. Strategically, this move bolsters Lenovo’s global enterprise business, expands its footprint in Israel, and enhances its ability to deliver next-generation storage solutions to customers worldwide.
  
• 1H25 earnings. Revenue increased by 21.9% to US$33.3bn in 1H25, compared with US$27.3bn in 1H24. Net profit rose by 34.8% to US$636.8mn in 1H25, compared to US$472.5 in 1H24. Basic EPS rose to 4.91 US cents in 1H25, compared with 3.57 US cents in 1H24.
  
• Market consensus.
  

(Source: Bloomberg)

Alibaba Group Holdings Ltd. (9988 HK): Entering the AI race

• RE-ITERATE BUY STOP Entry – 98.0 Target – 110.0 Stop Loss – 92.0
  
• Alibaba Group Holding Ltd provides technology infrastructure and marketing platforms. The Company operates through seven segments. China Commerce segment includes China retail commerce businesses such as Taobao, Tmall and Freshippo, among others, and wholesale business. International Commerce segment includes international retail and wholesale commerce businesses such as Lazada and AliExpress. Local Consumer Services segment includes location-based businesses such as Ele.me, Amap, Fliggy and others. Cainiao segment includes domestic and international one-stop-shop logistics services and supply chain management solutions. Cloud segment provides public and hybrid cloud services like Alibaba Cloud and DingTalk for domestic and foreign enterprises. Digital Media and Entertainment segment includes Youku, Quark and Alibaba Pictures, other content and distribution platforms and online games business. Innovation Initiatives and Others segment include Damo Academy, Tmall Genie and others.
  
• New artificial intelligence model. Alibaba recently unveiled Qwen 2.5-Max, the latest iteration of its AI model, claiming it outperforms the widely regarded DeepSeek-V3 on multiple benchmarks. The company stated that Qwen2.5 Max “achieves competitive performance against top-tier models,” including recent releases from OpenAI and Meta Platforms. Alibaba highlighted that its base models have demonstrated significant strengths across most benchmarks and expressed confidence that advancements in post-training techniques will further enhance future iterations of Qwen2.5 Max. With DeepSeek revealing that it trained V3 for just $5.6 million, investor focus is likely to shift toward China’s growing AI landscape, including Alibaba’s Qwen.
  
• Overseas push. Alibaba Cloud, the cloud computing and AI arm of Alibaba Group, has expanded its suite of proprietary large language models (LLMs) and development tools for global developers, reinforcing its push into international markets. The company announced that its latest Tongyi Qianwen LLMs, including the Qwen 2.5 series, as well as multimodal AI models like the Qwen-VL series and the visual generation-focused Tongyi Wanxiang, are now accessible via APIs on its generative AI development platform, Model Studio. This move aligns with Alibaba Cloud’s broader strategy to accelerate overseas investments and expand its cloud infrastructure in key global markets.
  
• New gifting experiences. Alibaba has revamped its gift-giving feature on the Taobao marketplace, simplifying the process for buyers just days after rival Tencent enhanced a similar function on its WeChat super app. Previously, Taobao’s gifting option only allowed users to purchase an extra unit at checkout, with gift cards shareable only within the platform. The new system now enables users to send gifts across various online shopping and social platforms, including WeChat. To encourage adoption, Taobao is offering a 15% discount on select gift purchases. This update is expected to boost user engagement and drive traffic to the marketplace.
  
• 3Q24 results review. Revenue increased 5.21% YoY to RMB236.5bn in 3Q24, compared with RMB224.8bn in 3Q23. Net profit rose by 63.1% to RMB43.5bn in 3Q24, compared to RMB26.7bn in 3Q23. Diluted earnings per share increased to RMB2.27 in 3Q24, compared to RMB1.35 in 3Q23.
  
• Market consensus.
  

(Source: Bloomberg)

Delta Air Lines Inc (DAL US): Poised for record breaking growth

• BUY Entry – 68 Target – 78 Stop Loss – 63
  
• Delta Air Lines, Inc. provides scheduled air transportation for passengers, freight, and mail over a network of routes. The Company offers flight status information, bookings, baggage handling, and other related services. Delta Air Lines serves customers worldwide.
  
• Jet fuel price to remain low. The US jet fuel market is expected to maintain relatively low prices in early 2025, continuing the trend from late 2024. The International Air Transport Association (IATA) projects an average jet fuel cost of US$87/bbl, or US$2.0714/gal, with total fuel expenditures expected to drop to US$248 billion nearly 5% lower than in 2024. While refinery disruptions could temporarily impact prices, overall stability is expected. Additionally, fuel costs are projected to comprise 26.4% of total airline expenses, down from 28.4% in 2024, contributing to improved profitability margins for airlines like Delta. As of the week ending 31 January 2025, the global average jet fuel price fell 3.0% compared to the week before to US$94.93/bbl.
  

Jet Fuel Price Trend

(Source: IATA)

• Expected rise in travel demand. Air travel demand is projected to increase significantly in 2025, with passenger numbers surpassing five billion for the first time, a 6.7% rise from 2024. IATA estimates global departures will reach 40 million, supporting industry revenue growth of 4.4% to over US$1tn. Increased connectivity will drive economic benefits across multiple sectors, such as hospitality and retail, while airline employment is expected to grow to 3.3 million. Despite cost pressures, Delta is well-positioned to capitalize on rising demand through strategic network expansion and operational efficiency.
  
• Best year yet. Delta Air Lines is on track for its strongest financial year yet, fuelled by robust travel demand, strategic expansion, and a continued focus on premium services. The airline expects over US$4bn in free cash flow and annual earnings surpassing US$7.35 per share. A key driver of this success is its longstanding partnership with American Express, which generated nearly US$2bn in 4Q24 alone. This collaboration, alongside Delta’s growing SkyMiles loyalty program and premium travel offerings, is expected to enhance customer retention and increase revenue. Delta’s fleet strategy will further strengthen its market position. In 2025, the airline plans to retire around 30 older aircraft while adding over 40 new planes, including 12-13 widebody Airbus A330s and A350s, supporting strong transatlantic demand. Half of its expected capacity growth will come from better utilization of its existing mainline and regional fleet, with 80% of incremental capacity focused on high-margin core hubs. By increasing efficiency, reducing maintenance costs, and expanding premium seating, Delta is positioning itself for long-term profitability and market leadership. Looking ahead, the airline plans to expand international routes, optimize its domestic network, and enhance customer experience to sustain its competitive advantage.
  
• 4Q24 results. Delta Air Line Inc’s revenue increased by 9.4% YoY to US$15.56bn in 4Q24, above estimates by US$1.08bn. It delivered non-GAAP EPS of US$1.85, above estimates by US$0.11. For FY25, the company earnings to grow by greater than 10% to US$7.35 per share in 2025 and over US$4bn in free cash flow in 2024. For 1Q25, Delta expects revenue to rise 7% to 9%, ahead of the roughly 5% growth analysts had forecast and earnings per share of between US$0.70 and US$1.0, slightly ahead of Wall Street forecast of between US$0.65 and US$0.97.
  
• Market consensus
  

(Source: Bloomberg)

Snowflake Inc (SNOW US): AI expansion strategy

• RE-ITERATE BUY Entry – 180 Target – 210 Stop Loss – 165
  
• Snowflake Inc. provides software solutions. The Company develops database architecture, data warehouses, query optimization, and parallelization solutions. Snowflake serves customers worldwide.
  
• Potential acquisition. Snowflake Inc is reportedly in talks to acquire data analytics startup Redpanda, a move that could enhance its AI and data software capabilities while strengthening its position against competitors like Databricks and Confluent. Redpanda provides streaming data analytics software that is API-compatible with Apache Kafka, allowing seamless integration with Kafka-based applications without requiring code changes. This API compatibility could accelerate Snowflake’s integration speed, improving its ability to process and analyze real-time data while making its platform more interoperable. With major clients like Cisco, Activision Blizzard, and Vodafone, and recent AI integrations with OpenAI, Vertex AI, AWS Bedrock, and vector databases like Pinecone and Qdrant, Redpanda could significantly bolster Snowflake’s AI-driven and real-time data capabilities. The acquisition would help Snowflake compete more aggressively with Confluent, the leader in streaming data analytics, while also positioning it for greater adoption in AI-driven applications. Redpanda was reportedly seeking a valuation of around US$1.5 billion, though Snowflake’s potential offer remains undisclosed.
  
• Benefitting from DeepSeek popularity. Snowflake has been largely unaffected by the broader tech sell-off following the release of China’s AI model, DeepSeek, and could actually benefit from its cost-efficient approach, which reduces hardware dependency and drives wider AI adoption. Unlike AI semiconductor companies, Snowflake provides cloud-based data storage and analytics rather than computing capacity, meaning more efficient AI models could lower its infrastructure costs and improve profit margins. The company recently integrated DeepSeek models into its AI marketplace in response to strong customer demand, reinforcing its position in AI-driven data analytics. With over 1,000 generative AI use cases and 3,200 AI-focused customers, Snowflake is well-positioned to capitalize on growing AI adoption, as lower AI costs may increase demand for its data storage and processing services. Additionally, by offering DeepSeek models, Snowflake differentiates itself from competitors like Databricks and Google Cloud while strengthening its AI partner ecosystem, attracting more model providers, and further accelerating enterprise AI usage. Snowflake is well-positioned to capitalize on growing AI adoption, as lower AI costs may increase demand for its data storage and processing services.
  
• 3Q25 results. Snowflake Inc’s revenue increased by 28.3% YoY to US$942.1mn in 3Q25 from US$734.2mn in 3Q24, above estimates by US$43.6mn. It delivered non-GAAP EPS of US$0.20, above estimates by US$0.05. For the fourth quarter, the company expects to deliver US$906 – US$911mn in product revenue.
  
• Market consensus
  

(Source: Bloomberg)

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Trading Dashboard Update: Add Trip.com Group Ltd (9961 HK) at HK$535 and Alibaba Group Holdings Ltd (9988 HK) at HK$98. Cut loss on Thai Beverage Plc (THBEV SP) at S$0.525.