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RHB |
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Ascendas REIT (AREIT SP) Recovery Underway
In line, still our top pick AREIT’s DPU was stable (+0.1% YoY) during its Jun 2019 quarter (1Q19), with contributions from its Australian and UK has guided for flat reversions in FY19 on high supply, while we expect a steady recovery in business park and high-specs rents given higher 67-100% pre-commitment levels. Our DPUs are unchanged and DDM-based TP SGD3.30 (COE: 6.9%, LTG: 2.0%). AREIT’s fundamentals are well supported by its scale, concentrated Singapore business parks/high-specs portfolio, and DPU upside from its overseas diversification. We remain positive on S-REITs with downside risk from lower interest rates on slowing economic growth. AREIT is best placed as the sector’s largest, most liquid proxy.
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DBS (DBS SP) NIM Peaking In 2Q19; D/G To NEUTRAL
Downgrade to NEUTRAL from Buy with new SGD28.30 TP from SGD30.30, 5% upside, based on 1.37x 2020F P/BV. Our long-term ROE assumption of 13.2% vs 1H19’s 13.7% is premised on digitisation-driven cost efficiencies with narrowing NIM. DBS’ 1H19 net profit accounted for 52% and 53% of our preresults and consensus FY19F. This report is an update post analyst briefing.
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CGS CIMB |
DBS VICKERS |
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Raffles Medical Group 2Q19: muted topline growth
■ 2Q19 in line; revenue growth was slower than expected (+5.6% yoy, -1.0% qoq) as Chongqing hospital takes time to ramp up. Maintain Hold. ■ Excluding the start-up loss, 2Q19 EBITDA would be +9.3% yoy and net profit +0.4% yoy, thanks to strong cost management and resilient SG operations. ■ YTD EBITDA loss from Chongqing was S$4.1m, well within management’s initial guidance of S$8m-10m for the first year of operations.
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Sheng Siong Group New stores driving growth
Maintain BUY and TP S$1.32, growth led by new stores. We maintain our BUY recommendation for Sheng Siong for its earnings resilience and stability. Growth continues to be led by new stores, with ten new stores opened in 2018 which will contribute for the full 12 months this year, and three new stores (Bukit Batok, Anchorvale and Sumang Lane) contributing from 2H19. A second store in Kunming, China has opened in June 2019. Dividend yield is decent at 3.5-3.6% with potential for a higher payout.
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Check out our compilation of Target Prices
