A reversal has occurred. As of the end of FY2025 ended March 31, the proportion of TPCs has increased to 41% of Temasek’s NPV versus 36% that of GDIs. The growth in the value of TPCs was driven by steady gains they each made in the local stock market, which has reached a new record after more than 16 years.
The gains especially pronounced in the past couple of years, as the likes of Straits Times Index (STI) component stocks DBS Group Holdings, Keppel, Singapore Telecommunications, Sembcorp Industries, Singapore Airlines (SIA) and most recently, Singapore Technologies Engineering (ST Engineering), either laid down clearly articulated growth targets or announced shareholder-pleasing plans, such as higher dividends or buybacks.
Temasek's portfolio breakdown. Photo: Temasek
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In the case of SIA, handsome gains were booked by Temasek for leading a $15 billion funding package to back the flag carrier at its darkest hour during the pandemic-era lockdowns.
The STI surged by around a quarter between April 2024 and March 2025, and the TPCs, as a whole, reached $178 billion, thereby lifting Temasek’s NPV for FY2025 to a record $434 billion, up 11.6%, or $45 billion from the previous year.
At a briefing in conjunction with Temasek’s annual report card, officials were obviously pleased with how the market has recognised the earnings growth and potential of its portfolio companies.
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Lim Ming Pey of Temasek calls the TPCs the “stalwarts” of the portfolio. “This year, TPCs contributed strongly to our performance. Robust returns uplifted portfolio value and provided liquidity to investment activities,” says Lim, who wears multiple hats as chief of staff, executive office; deputy chief corporate officer; and joint head of corporate strategy.
More TPC IPOs?
The gains made by the locally listed TPCs come amid an ongoing review by the government to revive the local bourse. Thus far, the headline measure is $5 billion from the Monetary Authority of Singapore to be allocated to fund managers to invest in smaller-cap stocks.
In contrast, investment firms GIC and Temasek are not known to be making any big moves as part of the review.
Png Chin Yee, Temasek’s chief financial officer, acknowledges that the stock market is important for Singapore as a financial centre, not least as a capital-raising venue for local companies. The $5 billion is meant to function as seed money that can hopefully attract other fund managers to take part in the local market, amid other measures including regulatory refinements.
“With both supply side and demand side measures, hopefully, this will create a virtuous cycle to make the Singapore market more vibrant, and when the market is more buoyant, obviously it can attract more people to list here,” she says.
In the year or so since the market review committee has been doing its work, there have been calls for the government to launch a big-bang IPO, harking back to the 1993 listing of Singtel, to jump-start excitement in the local market.
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When asked if Temasek plans to list other still-unlisted TPCs, such as Mapletree Investments, PSA International and SP Group to take advantage of the buoyant mood in the market, deputy CEO Chia Song Hwee maintains that the decision lies with the respective boards and management.
The key question, he says, is if being a listed entity is necessarily the right move for these companies, and the answer is not always straightforward.
PSA’s operations, for example, can be rather capital-intensive; presumably in recent years as it fits out the rest of the Tuas Megaport. This means PSA will go through periods when the capex will weigh on earnings, and thus, this may not be positive for public markets, he says.
“But there may come a time where capital expenditure moderates, and then cash flow generation is something more acceptable to the market then the management can consider doing that. But so far, the companies have been able to manage their growth with their capital self-generating capability of their business, so there’s no need for them to assess funding from [the] capital market,” says Chia.
Given the multitude of considerations, be it from a capital efficiency or commercial consideration, the straight answer is that there is no one-size-fits-all approach. “Releasing [a] company to be listed is not necessarily the objective here for us,” maintains Chia.
According to Chia, Mapletree Investments is for now privately held but via its various listed REITs, it can unlock capital while allowing other investors to come on board its growth journey, while also broadening the local markets.
Meanwhile, power and gas distributor SP Group is corporatised and no longer the government department it once was. Yet, it functions in a regulated industry, where the tariffs it can charge are not decided by the free market.
Conversely, SMRT Corporation was initially listed, which made minority shareholders happy with generous dividend payouts. When the neglect in its engineering and maintenance translated into public dissatisfaction, Temasek took the company private so that necessary resources could be poured into getting things back on track. “We have learned from the past what type of business is suitable for listing and what is not,” says Chia.
CFO Png points out that at the end of the day, investing and listing are commercial transactions. “Some companies may be better private hands for the time being rather than in the public space.”
Among all the STI component stocks, the best performer year to date is ST Engineering, a key TPC, as it rides on not just the recovery of the aviation maintenance industry but also a pick-up in defence and security spending. With rearmament a pronounced trend, investors have piled in further in anticipation of further order wins.
Temasek is not letting this growth momentum slide by. “Clearly, in the geopolitical world we are right now, defence is becoming one source of national sovereignty, and therefore you can see expenditures going to ramp up. So, clearly, we see that as a space where there should be opportunities. We have started investing in the public markets out there, and it is an area that we look at,” says Rohit Sipahimalani, Temasek’s chief investment officer.
The increasing optimism over the market review aside, the gains generated by the TPCs did not happen by chance. Temasek works with the TPCs to shape strategy, though Chia credits the management of the respective companies for executing the growth plans.
DBS, Singtel and ST Engineering, for example, had all “very clearly” articulated to investors multi-year plans of their own, laying down growth targets that are both ambitious and realistic.
“As they execute against those targets, investors will start to pay attention and reward the companies for their achievement, which will be reflected in share price. But all these actions took a long time to play out. You can go out to tell the market that ‘This is my five-year plan’, right? The first reaction is, ‘Yeah, I don’t believe you.’ Then, as time progresses, [the] market will start to see that these are real,” says Chia. In his earlier capacity as CEO of then Chartered Semiconductor, Chia was at the forefront of pitching the chipmaker’s growth plans to sceptical investors stung by the turmoil of the global financial industry.
DBS may have generated triumphant “$100 billion market cap” headlines this year but Chia points out that the bank has gone through several of these multi-year growth plans, where one plan builds over the next.
ST Engineering, meanwhile, is on its second five-year plan, after its first was disrupted by the pandemic, which hit its aerospace business “very meaningfully”, he adds. The company’s shares may be trading at an all-time high now but from Chia’s perspective, it is not because there is a sudden interest from investors, but because of the focused execution leading to earnings improvements, which then led to share price appreciation.
“There’s no one-size-fits-all. Every company will have its different strategy, different plans. What we do as a shareholder is to engage them and to push them to make the improvements. And it is important to recognise that whatever things we do, we’re not doing it for ourselves; it’s for the benefit of all shareholders,” says Chia.
When asked if the strong gains made by the listed TPCs can continue this year, Chia says that instead of forecasting share prices, what Temasek is doing is to keep tabs on whether the TPCs are delivering the growth targets that they have set. “And if they do, then the market should react accordingly.”
Temasek’s listed portfolio is also made up of several smaller companies, which have not quite attracted the same level of investors’ interest as the bigger ones. Chia says Temasek will also help these smaller entities set similar targets, but given limited management bandwidth, the focus has been on the larger ones. “But given time, we will get to it,” he says.
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