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MAYBANK KIM ENG |
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Ascott Residence Trust (ART SP) A Slower Recovery
Adding AHT’s assets; FY20 DPU up 2.0% We revised ART’s DPUs with the completion of its merger with AHT, which sees the latter’s units delisted on 3 Jan 2020. We estimate a 2.0% FY20 DPU rise against a 34% and 35% increase in revenue and NPI from the scheme arrangement (5% cash, 95% in ART units at SGD1.30). ART’s AUM grows 33% but its SG footprint has fallen on recent divestments, while Australian revenue and NPI jump to 13-21%. Recent macros reinforce our view of a stronger SG RevRAR recovery in 2020 and we prefer CDLHT (CDREIT, BUY, TP SGD1.80) and FEHT (FEHT SP, BUY, TP SGD0.80). Our DDM-based TP rises 4% to SGD1.40 (COE 7.2%, LTG 2.0%). Reiterate HOLD.
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Uni-Asia Group (UAG SP) Finding strength in diversity
Japan property investments yield good returns In Japan, UAG focuses on the development of small residential property projects under the “ALERO” brand. While management believes there is upside potential in this niche segment, it is also exploring various property asset management opportunities in Japan to expand its revenue base. For its hotel operation, it will be opening one hotel in Dec ‘19 in Fukuoka and four more hotels in 2020 to take advantage of the upcoming Tokyo 2020 Olympics.
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Check out our compilation of Target Prices
