UOB Kay Hian (UOBKH) has initiated coverage on industrial property developer Soon Hock Enterprise, immediately bestowing a “Buy” rating and an aggressive target price of S$0.68, which implies a potential upside of approximately 15% from its recent trading levels. This optimistic stance is primarily fueled by the company’s robust S$1 billion project pipeline, which offers exceptional visibility and growth prospects within Singapore’s stable and specialized industrial sector.
The core of UOBKH’s bullish view lies in Soon Hock’s key upcoming developments, Stellar@Tampines and Skye@Tuas. These two major 30-year leasehold projects are central to the S$1 billion order book. Notably, Stellar@Tampines has already achieved strong pre-sales figures, and Skye@Tuas is highlighted as a cutting-edge facility designed to be Singapore’s first industrial project providing electric vehicle truck-charging facilities. The timely execution of these projects is seen as the engine for the company’s rapid growth.
The brokerage firm anticipates that after a temporary lull in 2024 (a common occurrence tied to the cyclical nature of project Temporary Occupation Permits or TOPs), Soon Hock’s earnings are poised for a significant and aggressive rebound. UOBKH forecasts an extraordinary 124% Compound Annual Growth Rate (CAGR) for the company’s net profit over the 2024–2027 period, largely underpinned by the progressive completion and handovers of units at Stellar@Tampines and Skye@Tuas, which are expected to attain TOP in the first quarters of 2026 and 2027, respectively.
Soon Hock’s success is also attributed to its strategic “user-centric” design philosophy. The company’s focus on incorporating highly functional features—such as ramp-up layouts, wide driveways, and high floor-loading capacity—in projects like Stellar@Tampines ensures resilient end-user demand. This commitment to meeting the practical needs of industrial tenants has secured the company a position among Singapore’s top five industrial developers by gross floor area.
Beyond significant capital growth, the report underscores Soon Hock’s appeal as a potential income stock. Management has committed to a minimum dividend payout ratio of 25% for the 2025 and 2026 financial years. UOBKH estimates that this commitment will translate into substantial dividend yields, potentially reaching 5.5% in 2025 and up to 10% in 2026, offering an attractive pairing of growth and income returns for shareholders.
In summary, the UOB Kay Hian initiation is a strong validation of Soon Hock’s future prospects. The S$0.68 target price reflects the market’s increasing recognition of the company’s ability to benefit from major infrastructure developments, such as the Tuas Mega Port, with key projects like Stellar@Tampines and Skye@Tuas perfectly aligned to capture this structural growth in demand for modern, high-specification industrial spaces.
