| CIMB | PHILLIP SECURITIES |
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CITIC Envirotech Ebb and flow of water treatment ■ 1Q17’s core net profit of S$22m was broadly in line at 20% of our FY17F forecast as the first quarter is seasonally the weakest for the year. ■ Robust project pipeline with continued project wins to support earnings momentum. ■ Reiterate Add rating with unchanged assumptions and TP of S$0.93.
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Ho Bee Land Limited Overseas residential sales driving earnings Increase in residential overseas projects in Australia and China drove earnings. Long WALE of 5 UK properties enables Group to ride out post-Brexit uncertainty. Management plans to continue holding these properties for recurring income. Group to continue with interim leasing strategy for three Sentosa Cove properties. Maintain ACCUMULATE with an unchanged RNAV-derived target price of S$2.64.
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OCBC |
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Suntec REIT: Boost from 177 Pacific Highway Suntec REIT reported an in-line set of 1Q17 results. Gross revenue jumped 12.9% YoY to S$88.4m, with a boost coming from 177 Pacific Highway in Australia, which obtained its practical completion in Aug 2016. DPU rose 2.3% YoY to 2.425 S cents despite a smaller distribution from capital. Although we expect rental pressure for Suntec REIT’s retail portfolio to remain, we believe the situation may be improving. Suntec City mall achieved committed occupancy of 98.4% (+0.5 ppt QoQ), while footfall and tenant sales psf grew 7.3% and 4.3% YoY, respectively. Meanwhile, its Singapore office portfolio’s average rent was largely unchanged from the previous quarter. This suggests that the office segment is showing signs of stabilising. With investor’s hunt for yield strengthening in recent weeks, coupled with signs that the office market may be bottoming out and improving operational metrics for Suntec REIT, we lower our cost of equity assumption from 8.1% to 7.5%. We maintain our HOLD rating but raise our fair value estimate from S$1.54 to S$1.68.
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| OCBC | RHB |
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Mapletree Industrial Trust: Still resilient; BUY with higher FV Mapletree Industrial Trust (MIT) reported its 4QFY17 results which met our expectations. Gross revenue increased by 4.5% YoY to S$87.8m, while DPU came in at 2.88 S cents, representing YoY growth of 2.5%. Despite headwinds facing the industrial sector, MIT’s operational performance remained largely resilient. Its average portfolio gross rental rate inched up 0.5% QoQ to S$1.94 psf/month in 4QFY17, while overall occupancy rate improved by 1 ppt QoQ to 93.1%. There were mixed signals from renewal leases signed during the quarter, as three out of five of its segments recorded positive rental reversions. In terms of financial position, MIT’s balance sheet remains strong, with a low aggregate leverage ratio of 29.2%, as at 31 Mar 2017. We incorporate this latest set of full-year results in our model, and fine-tune our assumptions. Our FY18 and FY19 DPU forecasts are reduced marginally by 0.5% and 0.2%, respectively. However, we maintain BUY on MIT with a higher fair value estimate of S$1.93 (previously S$1.88) as we roll forward our valuations. |
CDL Hospitality Trusts Nearing Inflection Point We expect a turnaround in Singapore hotel RevPAR in 2018 with supply headwinds fading away. Demand is expected to stay resilient with the opening of the new Changi Airport terminal in 2H17 combined with STB’s marketing efforts. In the near-term, NZ remains the key growth driver aided by strong market fundamentals and favourable lease structures. With the worst likely behind it and a turnaround in sight, we expect a potential re-rating of the hospitality sector. Upgrade to BUY (from Neutral) with a higher TP of SGD1.62 (from SGD1.47, 7% upside).
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