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MAYBANK KIM ENG |
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Wilmar International (WIL SP) One Step Closer To IPO; Maintain BUY
Maintain BUY with new TP SGD4.87 from SGD4.83, 17% upside and 3% yield. Wilmar is one step closer to its China listing. Its subsidiary, Yihai Kerry, was amongst the first batch of 32 companies selected for Shenzhen Stock Exchange’s (SZSE) growth enterprise market (GEM) board pilot registration system for listing. As previously guided by management, the IPO process would likely be hastened under this programme. The removal of the IPO valuation cap under the new rule also creates potential upside for its value.
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DBS Group (DBS SP) Green Evolution
Balancing ESG risks and opportunities As ASEAN’s largest bank, DBS is exposed to multiple ESG risks. These include contagion risks from clients due to the nature of its business of lending & investments as well as internal governance risks. In our view, DBS’ ESG risks are not un-typical for a regional bank of its size. We also note DBS has been leading regionally in establishing frameworks and policies to mitigate these risks. It is also been materially expanding its asset allocation towards sustainability-linked transactions. At the same time the group’s strong capital levels, deep balance sheet liquidity, should present market share opportunities in the medium term. Maintain BUY.
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MAYBANK KIM ENG |
DBS VICKERS |
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Mapletree Industrial Trust (MINT SP) Another Data Boost
Adding onto hi-tech, BUY MINT has reinforced its hi-tech growth trajectory with its acquisition of the remaining 60% interest in its first US data centre asset portfolio. The investment at 6.8% NPI yield, lifts its overseas contribution from 24.4% to 32.5% and boosts its high-tech buildings exposure from 55.0% to 59.9%. We have kept forecasts and SGD2.95 DDM-based (COE: 6.5%, LTG: 2.0%) unchanged for now pending deal-closure. Valuations will continue to be supported by its positive growth fundamentals and more resilient portfolio, as DPU visibility has been further strengthened by its rising hitech asset investments and overseas diversification. These and SGD1.6- 2.3b in debt headroom, could support other DPU-accretive deals. BUY.
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US Office SREITs Avengers! Assemble!
• Rental collections strong at >90% despite lockdown; operational metrics remain healthy • US corporates preparing to return; safe distancing and safe working environment could lead to positive spillover to short-term leases • Certainty of at least 90% payout and yield spread to remain favourable with low Fed rates • Acquisition opportunities is a catalyst
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