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Elite Commercial REIT (ELITE SP) Sovereign Tenant Provides Recession-Resistant And Counter-Cyclical Cash Flows
On 9 Mar 21, ELITE completed the acquisition of 58 properties from its sponsor, which expanded its AUM by 67%. Leases contributing about 80% of rental income from the newly-acquired properties have rent review linked to UK CPI, which will increase rents by 8% starting from Apr 23. PartnerRE has increased its stake in ELITE from 1% to 23%. More intensified usage for Jobcentre Plus ensures that ELITE remains a recession-resistant counter-cyclical yield play. Maintain BUY. Target price: £0.95.
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Banking – Malaysia Solid 4Q20 Underlying Performance – Recovery Underway
The sector delivered a solid pre-provision operating profit growth of 10.8% yoy in 4Q20. Although near-term credit cost is likely to remain elevated, the recovery is well underway. The economic reopening should pave the way for a stronger 2H21 earnings recovery on the back of a lower credit cost as banks have taken the opportunity to front-load hefty pre-emptive provisions. Valuations remain attractive at -1SD to historical mean P/B. Maintain OVERWEIGHT. CIMB is our top sector pick.
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CGS CIMB |
CGS CIMB |
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Aztech Global Ltd One-stop electronics manufacturing solution
■ AZTECH’s net profit posted a 107% CAGR (FY17-19) to S$47.2m as management shifted its strategic focus to IoT and smart lighting products. ■ Profit margin/EBITDA margin expanded from 2.9%/5.2% in FY17 to 11%/15% in FY19, driven by higher-margin smart lighting and IoT products. ■ The global IoT device market is expected to deliver 20.8% CAGR (FY19- 23F), offering a US$425bn opportunity, according to Frost & Sullivan.
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Singapore Exchange Trading volumes keeping pace
■ Feb 21 SDAV held steady at S$1.4bn (CY20: S$1.3bn) but derivative volumes weaker at 17.7m contracts (-11% mom) due to Lunar New Year. ■ Pick-up of SGX’s FTSE Taiwan Index Futures is encouraging. Market share sustained at >90% of offshore volumes. Open interest amply above HKEX’s. ■ Reiterate Add. Buoyant market conditions should sustain trading volumes.
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Check out our compilation of Target Prices
