Stock Analysis: Hong Leong Asia | Lianhe Zaobao
Hong Leong Asia recommends buying, with a target price of HKD 2.82, closing price at HKD 2.39 (-0.42%). Its affiliated company BRC Asia has upgraded its rating to "Buy," with a target price of HKD 4.69, as it is a major beneficiary of construction activities in Singapore. Hong Leong Asia's 48.7%-owned China Yuchai International Company reported a gross margin of 13.3% for the first half of fiscal year 2025, with a net profit growth of 52% year-on-year. The demand for backup power from data centers is rising, and diesel generators remain the primary source of backup power
Hong Leong Asia
- Recommendation: Buy
- Target Price: 2.82 SGD
- Closing Price: 2.39 SGD (-0.42%)
We recently upgraded the rating of Hong Leong Asia's affiliate BRC Asia to "Buy," with a target price of 4.69 SGD. This is because BRC Asia is one of the major beneficiaries of the booming construction activities in Singapore.
Additionally, Hong Leong Asia's 48.7% stake in China Yuchai International achieved a gross margin of 13.3% in the first half of the 2025 fiscal year, with net profit growing by 52% year-on-year, significantly higher than its peer Weichai Power.
Further Reading
Stock Commentary: APAC Industry Stock Commentary: CapitaLand China Trust
The global demand for data centers has risen due to the use of artificial intelligence and edge computing, which means that the demand for long-term backup power sources for data centers has increased. Therefore, diesel generator sets remain the primary backup power source for Tier 3 and Tier 4 data centers.
We maintain a "Buy" rating for Hong Leong Asia and have raised the target price from 2.63 SGD to 2.82 SGD. (UOB Kay Hian)
