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SPH REIT ($0.965, down 1.5 cents) announced its 1QFY2022 key business and operational updates but did not give any core operating numbers.
In Singapore, tenants’ sales stayed resilient in 1Q FY 22 despite a 6 weeks restriction in dining-in (limited 2 pax vs 5 pax in 1Q FY21) with sales reaching 97% of 1Q FY21 for Paragon and The ClemenƟ Mall. Occupancy
also improved to 99.8% from 98.9% in 4Q FY 21, in line with the strategy of maintaining high occupancy and stabilized cashflow. For Paragon, tenant sales declined 7% yoy, impacted by tightened COVID measures
but occupancy improved to 99.7%, which underpins management’s leasing strategy to sustain occupancy for strong cash flow generation
SPH REIT is capitalized at S$2.7bln and currently trades at 5.8% dividend yield and 1x P/B ratio. Consensus target price stands at S$0.99, representing 2% upside from current share price. Despite SPH REIT’s
improving performance, we are cognizant of the hawkish Fed as rising interest rates (and especially faster rate hikes than expected) would continue to weigh on SPH REIT’s outlook as well as the REIT sector in
general. As such, we have a Neutral recommendation on SPH REIT.
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ComfortDelGro Corporation (CD SP)
New Year, New Beginning
For 2021, we expect a robust 143% yoy growth in net profit, coming off a low base in
2020. Looking forward, an expected recovery in ridership levels and new contract wins would boost 2022 earnings. Maintain BUY with a lower target price of S$1.90 (S$1.99).
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AEM Holdings Ltd
Intel’s expansion plan bodes well for AEM
■ With Intel’s US$7.1bn investment to expand its test and assembly operations
in Malaysia, we believe that FY23F net profit could hit a new record.
■ We also think that AEM will aim to be amongst the top 3 players in the backend test-related field; hence we now benchmark it against industry leaders.
■ Reiterate Add. We raise our TP by 35% to S$7.90 (previously $5.84).
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We highlight the key points raised from BRC Asia’s ($1.54, unchanged) just released FY2021 annual report:
Over the fiscal year, we continued to take measures and actions to strengthen the Group and improve our fi nancial position to prepare and respond to challenges. In January and October 2021, BRC Asia completed in total the placement of 41.015 million shares to raise
gross proceeds of approximately S$60.1 million, which were used to pay down the Group’s outstanding bank borrowings. These placement exercises have allowed the Group to remain in a strong position even as the return to pre-pandemic levels is expected to be slow and uncertain.
In essence, Lim & Tan Research remains constructive on BRC
Asia as we believe the company will be a key beneficiary of the
construcƟ on sector recovery going forward. We are projecting for earnings to grow another 17% to $55 million, putting forward PE ratio at an undemanding 7.7x. Yield is attractive and sustainable at around 8% and our target price of $2 implies a 12 month potenƟ al return of 30%. We maintain “Accumulate” rating on BRC Asia.
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