buy sell hold 2021


BRC Asia Ltd

Brighter outlook for FY22F


■ Riding on construction recovery, BRC Asia reported a strong set of 4QFY21 results. FY9/21 net profit of S$47.0m was 131% higher yoy.

■ With easing border restrictions, we expect more inflow of foreign workers in the coming months, which could aid further recovery in construction output.

■ Reiterate Add, with a higher P/BV-based TP of S$2.10.


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Digital Core REIT (DCREIT SP)

Quality Growth From Hyperscale Demand And Sizeable Sponsor Pipeline


With 68.5% of its base rental income derived from hyperscalers, DCREIT benefits from strong demand for hyperscale data centres expanding at a CAGR of 23% in 2020-24. Sponsor Digital Realty has granted DCREIT a global ROFR on its pipeline worth over US$15b. Its ability to scale up is supported by its low aggregate leverage of 27% and competitive cost of debt at 1.0%. DCREIT provides a distribution yield of 4.4% for 2022 and trades at P/NAV of 1.20x. Initiate coverage with BUY. Target price: US$1.18.


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Year Ahead 2022: Singapore

Reopening & Transforming


Services Laggards & Construction to Catch Up in 2022

We forecast GDP growth moderating from the strong +7.1% in 2021 to +3.8% in 2022 and +2.5% in 2023. A broader services and construction recovery will drive GDP growth in 2022, as the manufacturing momentum eases. Semiconductor production, which accounts for 36% of total manufacturing, is operating near full capacity. With the economic reopening and expansion of Vaccinated Travel Lanes (VTLs), consumer-facing and travel-related sectors – F&B, retail, recreation, hospitality - will catch up and recover more strongly in 2022. Relaxation of border controls will help ease foreign worker shortages, although construction output will likely remain below pre-pandemic levels in 2022. About 86% of the population has received at least one vaccine dose as at 27 November. Booster shots started on 15 Sep, while vaccination of children below 12 years will start early next year.


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City Developments Limited / CDL ($6.83, unchanged) will redevelop its Central Mall properties and the surrounding area into a large-scale mixeduse development following the proposed acquisition of Central Square for a purchase consideration of S$315 million. Located at 20 Havelock Road, Central Square is currently a 99-year leasehold commercial and residential development, with a remaining lease tenure of approximately 72 years, which comprises a serviced residence and commercial spaces including offi ces and retail units.

Through its wholly-owned subsidiary, CDL ConstellaƟ on Pte. Ltd., CDL has entered into a put and call option agreement to acquire the asset from DBS Trustee Limited (a trustee of Far East Hospitality Real Estate Investment Trust) for S$313.2 million and the reversionary leasehold interest from OPH Riverside Pte Ltd for S$1.8 million. The transaction includes an incentive payment of up to S$18 million above the purchase consideration, subject to certain conditions being met by 31 December 2023, including getting planning approval for residential use.

Given the continued strength of Singapore’s property market post the Covid-19 pandemic induced downturn, we like CDL’s moves to future- proof, enhance and rejuvenate their property portfolios and maintain our “Accumulate” raƟ ng with 12 month target price of $9.

LionelLim8.16Check out our compilation of Target Prices

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