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First REIT 1Q18: New purchases boosted earnings performance
■ 1Q18 DPU of 2.15 Scts in line with estimates, accounting for c.24% of our FY18 projections ■ Earnings growth in 1Q18 driven largely by new acquisitions ■ Healthy gearing of 34.1% at end-1Q18 ■ Maintain Hold with an unchanged TP of S$1.44
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Keppel Infrastructure Trust
Look beyond Basslink irritant High dividend visibility remains; maintain BUY. Keppel Infrastructure Trust (KIT) maintained its record of steady DPU of 0.93 Scts in 1Q18, as expected. KIT generated distributable cash flow of S$36.2m in 1Q18, in line with expectations. Most of KIT’s assets derive revenue from availability-based payments, independent of actual offtake. Hence, cash flows are highly predictable and not exposed to economic cycles. Concession agreements are long term in nature, of up to 20 years, and mostly with government entities, thereby minimising risk.
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| UOB | UOB |
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Keppel Telecommunications & Transportation (KPTT SP) 1Q18: Still Turning The Corner
KPTT’s 1Q18 net profit of S$9.4m was 18%/18% of UOBKH and consensus forecasts, below expectations. Both the logistics and data centre segments remained weak, with the former swinging into a loss owing to initial set-up costs for UrbanFox. Higher staff costs to support new business developments continued to mar results. Upside is still likely to come from the data centre segment. We cut our net profit forecasts by 6-10%. Maintain BUY with a lower target price of S$1.75.
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M1 (M1 SP) 1Q18: Higher Revenue Expended By Rising Costs
Post-paid revenue expanded 4.3% yoy as post-paid subscriber base grew 2.7% yoy in 1Q18. Fibre broadband revenue increased 13.9% yoy, aided by a 5.3% yoy increase in ARPU. Unfortunately, growth in service revenue was negated by a 5.6% yoy increase in expenses for staff costs and 11.8% increase in facilities expenses. The impending entry of TPG Telecom as the fourth mobile operator remains a major threat. Maintain SELL. Target price: S$1.60.
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Check out our compilation of Target Prices
