|UOB KAYHIAN||UOB KAYHIAN|
Keppel REIT (KREIT SP)
Enlarging Footprint Down Under
KREIT continues to expand its footprint in Australia through the acquisition of Pinnacle Office Park, which will increase its exposure to Australia from 16.3% to 19.4% of AUM. Pinnacle Office Park is located at close proximity to Macquarie Park Metro Station and will benefit from the completion of the City and Southwest metro rail in 2024. The acquisition is fully funded by A$-denominated debt and is accretive to pro-forma 2019 DPU by 4.5%. Maintain BUY. Target price: S$1.40.
Wilmar International (WIL SP)
Be Patient; Re-iterate BUY
Re-iterate BUY on Wilmar despite the recent setback from the unexpected placement by ADM and the final approval for YKA listing taking longer than expected. Investors should focus on the potential value creation from YKA listing as well as a potential special dividend. Beyond YKA’s listing, the strong 1H20 earnings have led to a 10% consensus earnings upgrade, and Wilmar could potentially outperform consensus again on better-than-expected margins. Maintain BUY with a higher target price of S$5.35.
Bidding up its multi-asset platform
■ BidFX combines SGX’s capabilities for both OTC FX and FX futures, thereby expanding its addressable market and suite of risk management tools.
■ SGX’s Jul-Aug trading data track slightly above our FY21F expectations; its new FTSE Taiwan contract is gaining traction vs. HKEx’s MSCI Taiwan Index.
■ Reiterate Add on valuation (0.5 s.d. below historical mean) and 3.8% yield. Its S$603m net cash (as of end-FY20) paves the way for potential M&As.
S-REIT perpetuals market reopens
• Year-to-date issuance of c.S$575m of perpetual securities a sign that demand is returning to perpetuals
• Proceeds have been utilised to fund acquisitions and refinancing driving 1-1.9% to distributions
• Ascott REIT may consider calling back its recently reset perpetual securities at the next available call date in December 2020
Check out our compilation of Target Prices