• 2H25/FY25 PATMI exceeded our expectations at 55%/77% of FY25e forecast. Jet fuel volumes increased 15.3% YoY to 8.8mn mt in 2H25 while margins expanded sharply, with gross profit surging 140% YoY to US$42.4mn. CAO is in a strong net cash position of US$686.9mn.
• Total supply and trading volume increased 3.4% YoY in 2H25 to 12.15mn mt, whereas jet fuel volumes rose 15.3% YoY to 8.8mn mt. This was supported by China's strong passenger volume recovery, which increased 5.5% to 770mn passengers. Shanghai Pudong International Airport (SPIA) continued to be a key contributor with 44.6% higher profit YoY in 2H25 at US$31.9mn, accounting for 52.6% of 2H25 PATMI.
• We increase FY26e PATMI by 32% to account for higher refuelling volumes on continued air travel recovery, and improved physical jet fuel supply margins. SPIA’s Terminal 3 expansion will also increase passenger handling capacity by c. 62.5%, further driving conventional jet fuel and sustainable aviation fuel (SAF) demand. We maintain BUY rating with a higher TP of S$2.53 (prev: S$1.50). CAO trades at an 11.2x FY26e P/E. Growth will arise from higher passenger volumes from its SPIA associate post-expansion, and from strategic investments to support its growing SAF business.

• February’s 3M-SORA was down 2bps MoM to 1.16%, the smallest MoM decline in 20 months, and fell by 168bps YoY. Singapore loan growth has continued to climb (Jan26: +6.1%). Banks are guiding low to mid-single digit. CASA rose 12% YoY and CASA ratio to deposits at 19.8% (Dec25: 19.6%), a tailwind for banks, lowering funding costs and cushioning NIM compression.
• 4Q25 bank earnings were slightly below expectations. Earnings dipped 5% YoY, from lower NII (-5%) as NIMs fell by 22bps YoY. Fee income growth (+13%) partially offset the lower NII. The banks are guiding for NIM compression to ease in FY26e as deposit rate cuts begin to flow through and interest rates stabilise. We expect FY26e PATMI to increase by 7% YoY, as fee income growth will be partially offset by the decline in NII. All three banks have committed to complete their previously announced capital return plans.
• Maintain NEUTRAL. Declining interest rates will continue to compress FY26e NIMs and NII. However, the increased volatility and jump in SDAV is boosting capital markets and fee income, helping offset these headwinds. Furthermore, spiking oil prices raise inflation risks, potentially delaying further rate cuts and supporting margins. Despite asset quality concerns at UOB, we view their pre-emptive provisioning as prudent and overall risks as contained. Banks’ dividend yields remain attractive at 5.1%, with ongoing buybacks improving ROE. We prefer DBS (fixed-dividend policy) and OCBC (wealth management growth and excess capital).

-  FY25 PATMI of S$630mn (+213% YoY) exceeded our expectations, coming in at 88% above our FY25e estimate. Growth was driven by strong Singapore residential sales and substantial capital recycling gains, with c.S$2bn in divestments in FY25, including the sale of its 50.1% stake in South Beach. 

-  The dividend policy has been revised to a minimum of 35% of reported PATMI (previously unspecified), which would include gains from divestments. A final dividend of 25 cents per share has been declared, bringing total FY25 dividends to 28 cents per share, representing a 40% payout.

-  Maintain BUY with a higher RNAV TP of S$11.32 (prev. S$9.62), implying a 25% discount to our RNAV of S$15.09. We raise our RNAV by 17% after accounting for recent investments/divestments and higher valuation of the living sector portfolio. Strong residential sales momentum in Singapore is expected to continue into FY26. We also expect more asset divestments, with immediate plans to exit its legacy UK portfolio (c.S$800mn carrying value, comprising development sites and residential projects). A strategic review is ongoing, with an update expected by mid-2026. Fund management initiatives could involve recycling non-core assets into private funds.