ANALYSTS SAY: Buy, Sell, Hold (7 June 2017)

Frasers Logistics & Industrial Trust

Strengthening its core

■ We view FLT’s maiden acquisition positively. The acquisition price is decent and the properties’ characteristics would strengthen FLT’s core.

■ Based on c.45:55 equity:debt funding mix, the manager estimates 0.9% accretion to pro-forma DPU.

■ We continue to like FLT for its pure exposure to the favourable Australian industrial market as well as its strong sponsor support.

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SIA Engineering Company: Expanding line
maintenance network to Japan

SIA Engineering Company Ltd (SIAEC) recently
announced that it has established a whollyowned
subsidiary in Japan to provide line
maintenance (LM) services at airports in Japan
on receipt of relevant approvals from authorities.
SIAEC shall commence operations at Kansai
International Airport and intends to expand its
presence with other service offerings as well as
to other airports at a later stage. In our view,
this is a positive long-term growth plan as the
traditional heavier checks on new-generation
aircraft are now broken down into multiple
phases to be performed on the apron (i.e. linemaintenance)
to reduce aircraft ground time in
hangars. Looking ahead, we also expect SIAEC
to continue to expand its LM network in order to
better serve its customers. The latest addition
also expands SIAEC LM network to 37 airports in
eight countries, and over 900 flights daily for
more than 70 airlines. All said, we expect this
strategy to progressively bear fruit and is
unlikely to have any immediate near-term
impact. Maintain HOLD with an unchanged FV of
S$3.75.

RHB

CapitaLand News Flash Update (CAPL SP, NEUTRAL, TP: SGD3.84, Market Cap: USD11,044m)

CapitaLand sees potential to double Japan AUM to SGD5bn CapitaLand sees potential to double its Japan assets under management (AUM) to SGD5bn from current AUM of over SGD2.5bn as at 1Q17. The Group also announced that its on track to achieve at least SGD3bn worth of AUM in Japan by the end of 2017. Japan is expected to feature prominently in the Group’s recurring income strategy, with a robust portfolio of incomeproducing shopping malls, serviced residences and offices. Currently, CapitaLand's Japan recurring income portfolio currently comprise of five shopping malls, four office buildings as well as 23 serviced residences and rental apartment properties.

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