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mm2 Asia A head full of dreams ■ 51%-owned Unusual Productions is Singapore’s leading concert producer and promoter, aiming to expand regionally and develop own IPs in the form of musicals. ■ We expect Unusual to secure more artiste tours with the IPO proceeds, boosting its earnings contribution to mm2 from FY17F’s S$1.8m to S$4.9m in FY19F. ■ Upcoming spin-off results in stake dilution to 41.9% for mm2, but mitigated by stronger earnings from Unusual. We raise our FY18-19F EPS by 6-14%. Robust project pipeline includes “The Voice” and 4 th ■ instalment of “Ah Boys to Men”. ■ Maintain Add with higher TP of S$0.60 as we switch to SOP-based valuation.
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Singapore Myanmar Investco: Retail and F&B venture in Junction City Singapore Myanmar Investco (SMI) announced yesterday evening that it will start retail and F&B operations in Junction City, the latest high-end integrated development in Yangon, Myanmar. With a 5-year lease here, SMI targets to open up to 10 retail brands and F&B concepts, featuring brands like Coach, Pandora, Furla, Benetton, as well as Crystal Jade Kitchen and IPPUDO. We believe this development rides on the country’s rising trends in consumer spending as well as international tourism. In addition, SMI continues to hold a dominant position in airport duty-free retail at Yangon International Airport’s new terminal, and we understand that the duty free business has been growing well since the inception of most stores in early Sep last year. Led by a strong management team, coupled with a backdrop of a high-growth economy, we believe SMI is attractively positioned for growth. Maintain BUY with fair value estimate of S$0.97, based on a conservative PE ratio of 16x FY19F (ending Mar 2019). |
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REITS The REITs Pulsebeat: Positive Signals For Industrial Recent PMI and manufacturing output data indicates that the manufacturing sector is set to see steady growth. This augurs well for industrial demand. While supply pressures remain as an overhang, a pickup in demand ensures that rentals and capital values are unlikely to decline sharply. The business park segment is still the most favourable, on the back of very limited supply. Meanwhile, speculation of a potential consolidation among smaller industrial REITs may act as a re-rating catalyst for the sector. Top Picks: Ascendas REIT and Viva Industrial Trust.
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Frasers Centrepoint Ltd Timely home run Growing developer with high dividend yields. We maintain our BUY rating on Frasers Centrepoint Ltd (FCL) for its attractive valuations at 0.7x P/NAV and 12x FY17F PE, and offering one of the highest dividend yields among developers at c.5%. While most developers have re-rated to an average of 0.9x P/NAV following the government’s recent tweaking of property measures, FCL has lagged behind, implying that the market has broadly overlooked the potential of its upcoming Singapore projects.
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