CapitaLand Int. Comm. Trust (CICT SP)
Recovering, recycling
Preferred recovery trade, BUY
CICT’s revenue/ NPI/ DPU were up 2.1% HoH/ 1.4% HoH/ 0.8% HoH in 2H21, as contributions rose across its retail, office and integrated development assets. FY21 DPU at SGD10.40cts was slightly behind our estimate but in line with the street. Easing negative retail reversions, tailwinds from office sector recovery, and traction from improving NPI, suggest stronger
fundamentals in FY22E. Its balance sheet remains strong, and we see upside from acquisitions, as management escalates its capital recycling
efforts, backed by its sponsor’s Singapore AUM. Valuations are compelling at 6.0% FY22E div. yield and 1.0x P/B vs history and peers. Maintain BUY and DDM-based TP of SGD2.55 (COE: 5.9%, LTG: 1.5%). |
Mapletree Logistics Trust (MLT SP)
Reversions on the rise
Another steady quarter MLT’s 3QFY3/22 DPU rose 5.8% YoY/ 0.6% QoQ, helped by higher rental income and contributions from acquisitions in South Korea, Australia and Japan. We fine-tune our estimates to factor in its recent deals, as SGD1.1b of assets in China, Vietnam, and Malaysia are set to expand AUM by c.10%
to SGD12.7b by end-Mar 2022E. DPU visibility remains strong, underpinned by resilient occupancies from steady demand growth, and upside to rents
in FY23E, for its well-placed logistics AUM. Management is eyeing further deal momentum to drive AUM growth, and upping its pace of divestments against tightening cap rates. Our DDM-based TP (COE: 5.7%, LTG: 2.0%)
stays at SGD2.35. BUY.
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CDL Hospitality Trusts (CDREIT SP)
Slow RevPAR normalisation
FY21A a miss
CDLHT reported 2H21 DPU of SGD3.06cts at -11% YoY, with c.40% from dividend top-ups, and c.SGD30m in divestment gains still to be deployed. FY21 DPU of SGD4.27cts at -14% YoY would have met c.90% of our and
street estimates. Rising vaccination rates and gradual border reopening suggest better fundamentals in FY22E, but demand visibility remains low. We fine-tune our estimates, and keep our DDM-based TP (COE: 7.1%, LTG: 2.0%) at SGD1.20. We prefer ART (ART SP, CP SGD1.03 BUY, TP SGD1.30) for its long-stay assets and upside from capital distributions amid slower DPU growth, and FEHT (FEHT SP, CP SGD0.57 BUY, TP SGD0.70), for its Singapore-focused AUM and higher master lease contributions.
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DBS Group Holdings (DBS SP)
Bolt-on Acquisition To Enhance Scale In Greater China
DBS has agreed to acquire Citi Consumer Taiwan via a transfer of assets and liabilities.
It will pay Citigroup a premium of S$956m and also inject S$1.2b into DBS Taiwan to
support incremental risk-weighted assets. Based on the total cost of S$2.2b, DBS paid
PE of 9x for Citi Consumer Taiwan based on pre-pandemic earnings. Citi Consumer
Taiwan generated ROE of above 20% pre-pandemic in 2018 and 2019 and has a high
CASA ratio of 70%. Maintain BUY. Target Price: S$40.28.
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