| MAYBANK KIM ENG | UOB KAYHIAN |
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Mapletree Industrial Trust (MINT SP) Upsizing Its Hi-Tech Reach
Initialising on overseas growth strategy MINT’s expansion of its investment mandate with a push into overseas data centres is a sound growth strategy, in our view, given favourable sector dynamics and a limited domestic sponsor pipeline. Looking ahead, we expect its hi-tech segment contribution could rise from 29% currently to 45% of its AUM. Given its low 29.8% gearing, we estimate that SGD200- 800m in debt-funded acquisitions could boost FY19E DPU by 4-18%, assuming NPI yields at 7-8%. MINT remains a leveraged play into improving industrial fundamentals, at 3.6% FY17-20E DPU CAGR. BUY.
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SATS (SATS SP) Price Weakness Not Congruent With Positive Data Out Of Changi
The recent decline in stock price is not congruent with positive data out of Changi, which shows 4.3% and 11% yoy increases in flight movements and cargo throughput respectively for Jul-Aug 17. If September’s data is equally strong, SATS 2QFY18’s revenue growth is likely to exceed 1Q’s. We are also not unduly worried about inflight catering revenue as SATS is likely to prevail if a pricing war continues. We also believe that pressure from airlines is likely to abate as yields stabilise. Maintain BUY. Target price: S$5.40.
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| RHB | |
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Bumitama Agri Trading Below Replacement Value
Investors were interested to find out more about Bumitama’s FFB growth outlook as well as improving age profile during our 2-day NDR in Singapore recently. With P/E valuations trading below its historical mean and EV/ha valuations trading below replacement value, investors found the company to be an interesting proxy to the recovery in CPO prices when the cycle turns. We maintain our BUY recommendation, with an unchanged TP of SGD0.85 (15% upside), which implies an EV/ha of USD9,000, which is at the lower end of its peers’ USD9,000-13,000/ha.
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