UOB kay Hian

[weijian]

UOB KayHian has 2 types of income sources - Commissions and net interest income (NII). With Spore/HK equity markets turning alive in 2025, commissions have accelerated in 2H25 and on a full year basis is up +30% YoY. Loan receivables (margin financing) is also slightly up but unfortunately with lower rates been charged, full year's NII is slightly lower.

UOB Kay Hian is one of the rarer companies on SGX that consistently offers a scrip option for its dividend. In general, at least half of the shares take the scrip option, increasing the no. of shares by 3-4% per annum. Interestingly for FY25, there is no scrip dividend option and it seems to coincide with the shares trading >NAV. I presume Godfathers (or their descendants) don't like buying at >NAV.

For The Six Months and Full Year Ended 31 December 2025

Name of Dividend: First and Final
Dividend Type: Cash
Dividend Amount per: 12.3 cents per ordinary share
Tax Rate: Tax exempt (one-tier)

UOB KayHian FY25: https://links.sgx.com/FileOpen/InterimFS...eID=876530

An improved trading environment with relatively fixed costs (staff, IT and compliance etc) and a re-rating by Mr Market due to EQDP. So, even GodFather Wee Junior says no to scrip.

An OPMI had a different opinion as he preferred scrip since it comes with a discount as share prices high. From a capital allocation perspective, a company who needs capital is better off issuing scrip at high prices since it means lower cost of capital.

So from this exercise, we can reasonably conclude UOB Kayhian's scrip is mainly a vehicle for Wees to increase control while not overpaying (since they probably don't need the cash), and not because UOB Kayhian needs more capital to grow.

MINUTES OF THE ANNUAL GENERAL MEETING

In respect of the FY2025 final dividend, the Board had, after due consideration, decided not to offer a scrip dividend option, taking into account the Company’s prevailing shares trading price. At the current valuation, which was more than 2.5 to 3 times the book value per share, the Board was of the view that it would not be meaningful for shareholders to receive the dividend in the form of scrip dividend at this juncture.

AGM Q&A: https://links.sgx.com/FileOpen/UOBKHHL%2...eID=890283