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UOB KAYHIAN |
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Manulife US REIT Premium US office landlord
■ MUST offers exposure to a portfolio of premium US office properties. ■ Property market studies indicate that supportive macroeconomic and robust sector fundamentals underpin continued rental growth. ■ The stock is trading at 7% annualised 1Q19 dividend yield.
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Singapore Airlines (SIA SP) Strong Pax Traffic But Cargo Traffic Declines For Nine Straight Months
SIA’S May traffic data showed nine consecutive months of decline in cargo, though the pace of decline narrowed in May. Given the steep 31% yoy fall in electronics NODX exports, we believe that air cargo yields would also have been soft. Pax traffic though was better than expected, although this could have been partially due to a longer Vesak Day holiday and transfer of routes from Silk Air. Maintain HOLD with a target price of S$9.50. Suggested entry level: S$8.60.
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| PHILLIP SECURITIES | MAYBANK KIM ENG |
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Singapore REITs Monthly Monthly Tracker: June 2019 SINGAPORE | REAL ESTATE (REIT) | UPDATE
FTSE S-REIT index return gained 4.4% MTD and 14.8% YTD. Strongest gains were from the Healthcare sector (+3.9% YTD) and weakest showing at the Hospitality sector (-2.3% YTD). Sector yield spread still below the -1 standard deviation (s.d.) level as at end-May, at 272bps, over the benchmark 10-year SGS (10YSGS) yield. 3-month SOR rose to 2.05% as at end-May. Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality.
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AEM Holdings (AEM SP)
System level test – At an inflection point At the right place, at the right time 5G is expected to usher greater levels of device interconnectivity. Chips are also increasingly complex and mission-critical. To test chips efficiently and effectively, chipmakers are increasingly looking to system level test (SLT) to complement conventional methods. AEM appears well positioned given its early mover advantage and strong know-how. AEM may even be an attractive M&A target, given attractive valuation of 6x FY19E EV/EBITDA. ROE-g/COE-g TP of SGD1.40, based on 3.1x FY19E P/B is unchanged. BUY.
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