The SRS Fund May 2025

The Ultra Competitive Local F&B Industry

Singapore has a vibrant local food & beverage industry. From local hawkers to upscale Michelin-star restaurants, there is no shortage of options for local consumers to indulge. However, in recent times, the industry as a whole is facing multiple challenges simultaneously.

Our investment in Jumbo and Kimly was not spared. First off, labour costs have increased substantially. This is brought about by both government manpower policies as well as increasing housing costs.

To top it all off. Rental cost and fierce imported competition from major Chinese brands are building a higher bar to entry in an industry that has always been a test bed for budding local entrepreneurs to offer a fresh perspective for the taste buds.

What the SRS Fund Added During the Month

The SRS Fund reinvested some proceeds from the sale of YZJ Financials to SATS, betting on Singapore stake in construction the new Terminal 5 which will cement Singapore as the premier aviation hub in the Asia Pacific region.

Despite the threat of a looming trade war, SATS delivered stellar full-year results driven by revenue and earnings growth. More importantly, the margin expansion suggests its merger with WFS is finally delivering true value for its shareholders.

Quick Rebound

In line with major stock markets worldwide the SRS Fund rebounded strongly from its low fairly quickly as fear of tariff impact on business were replaced by optismism as several countries annouced trade deals including a pause of tariff between the US and China.

With the increased stake in SATS, the SRS Fund put in a decent performance, delivering a 3.84% gain year to date.

Portfolio Segments

The services segment grew to 18.9% of the SRS Fund with the increased stake in SATS. The finance segment continues to dominate due the significant contributions of local banks and SGX, which is a significant representation of the local economy.

Dividends

Dividend, as expected, made a new high with nearly $10.5k received in just Q2 alone. As the businesses in the SRS Fund do well, I would expect dividends to exceed what was paid out in 2024.

SRS Fund Value

After a down month, the SRS Fund Value returns to its upward trajectory, hovering just below the half-million mark. Assuming there is no major setback to the global economy, I expect the $500k milestone to be exceeded again by end of the year.

Cash Levels

With some funds deployed to SATS, the SRS Fund levels stay at a comfortable 8%, allowing me to continue waiting for opportunities to arise if volatility continues to feature towards the 2nd half of the year.

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