| UOB KAYHIAN | PHILLIP SECURITIES |
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Ascott Residence Trust (ART SP) 1Q17: Running To Stand Still 1Q17 results were in line with our expectation. Overall RevPAU was up 2% yoy to S$128, mainly attributed to the acquisition of Sheraton Tribeca in 2016. However, on a same store basis, overall RevPAU declined due to lacklustre corporate demand in Singapore and translational impact from the UK. Maintain HOLD with a lower target price of S$1.15 (previously S$1.20). Entry price: S$1.00.
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Asian Pay Television Trust 13% yield from a monopolistic business SINGAPORE | TELECOMMUNICATION | INITIATION 13% dividend yield. Paid quarterly. Annuity type revenue with a cable infrastructure into 760,000 customer homes. APTV is the only cable service provider available in areas it operates. Initiate coverage with “BUY” rating and SGD0.64 target price, implying a 43% upside plus dividends.
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OCBC |
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CapitaLand Retail China Trust: Catalysts in progress In our last report, we mentioned two catalysts for positive DPU growth in FY17 – CapitaLand Retail China Trust’s (CRCT) 1Q17 results show that CapitaMall Minzhongleyuan is undergoing a successful turnaround while Xinnan has recorded strong NPI margin growth. While 1Q17 DPU, at 23.3% of our full-year forecast, came in at the lower range of our expectations due to higher than expected tax from the inclusion of Xinnan, we note that indicators for CRCT’s operational performance were otherwise very encouraging. After adjustments, our fair value increases slightly from S$1.56 to S$1.58. CRCT currently has a healthy gearing level of 36.4% as at 31 Mar 2017. We re-iterate BUY on CRCT with a S$1.58 fair value.
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| MAYBANK KIM ENG | CIMB |
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Singapore Medical Group (SMG SP) Second Major Acquisition; Raise TP by 16% Acquiring paediatric clinics, raise EPS by 5-16% SMG is acquiring two paediatric clinics in Toa Payoh and Bishan, for SGD25.3m: 55% in cash and 45% in new shares at 0.54 cts apiece. Valuation is 11x P/E, with a 5-year profit guarantee of SGD2.3m pa. They are expected to provide synergies and cross-selling opportunities for its women’s health division, which has eight specialists. We remain positive on SMG’s ability to attract senior specialists, after its first major acquisition of Astra in Feb 2017. We raise FY17-19E EPS by 5-16%, assuming six months of contribution in FY17E. Our TP climbs by 16% to SGD0.78, still at 27x FY18E EPS, the 2-year forward mean of small-cap healthcare peers in Singapore. Further catalysts are expected from more M&As and organic expansion. Risks to our view include failure in integrating M&A targets and competition.
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Frasers Logistics & Industrial Trust All shiny and chrome ■ FLT is the first S-REIT with an initial pure-play Australian industrial portfolio of A$1.74bn, making it the fourth largest industrial owner in Australia. ■ Rising consumption, e-commerce and internationalisation of the retail sector are driving demand for 3PLs and logistics facilities. ■ FLT has a prime portfolio which ticks all the checkboxes. It is also backed by sponsor FCL, which through FPA, has end-to-end development capabilities in Australia. ■ We forecast FY17 DPU of 6.87 Scts and 3.4% yoy growth for FY18 DPU. ■ We initiate FLT as one of our sector preferred picks with a DDM TP of S$1.10.
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