CGS CIMB

Keppel Corporation
Great change ahead

■ We are pleasantly surprised by the S$0.15 DPS in 1H22 (vs. our expectation of S$0.12-0.13), despite a slower pace of monetisation (S$710m YTD).
■ This is on the back of a strong set of 1H22 results, 13% higher than our expectations, positively surprised by O&M, asset management and FV gains.
■ TP is raised to S$9.37 to reflect asset-light urban development strategy and ex-O&M. Catalysts: stronger-than-expected asset monetisation and dividend.

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CapitaLand Integrated Commercial
Improving outlook

■ 1H22 DPU of 5.22 Scts was deemed in line, at 46.3% of our FY22F forecast.
■ Office and retail segments performed better, driven by acquisitions and organic improvement.
■ Reiterate Add rating with an unchanged TP of S$2.57.

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CGS CIMB

UOB KAYHIAN

Digital Core REIT (DCREIT SP)
1H22: Sunshine Comes After The Rain

DCREIT’s 1H22 results are in line with expectations with all 10 data centres remaining fully occupied. DCREIT has disclosed acquisition targets in three core markets, namely Frankfurt, Chicago and Dallas. The sizes of the acquisition range from US$150m to US$650m depending on conditions in financial markets. Management will also be activating its unit buyback programme. DCREIT provides a distribution yield of 4.9% for 2023 (KDCREIT: 5.1%, MINT: 5.1%). Maintain BUY. Target price: US$0.98. 

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CapitaLand Integrated Commercial Trust (CICT SP)
1H22: Growing In Scale And Resiliency

Rental reversion for retail turned positive at +0.5% and tenant sales at downtown malls increased 50% yoy in 2Q22, driven by the easing of COVID-19-related restrictions in April. Committed occupancy for offices gradually inched higher by 0.5ppt qoq to 91.9%. The potential acquisition of the Mercatus portfolio would strengthen CICT’s defensive posture but requires an equity fund-raising exercise. CICT provides 2022F distribution
yield of 5.3%. Maintain HOLD. Target price: S$2.34.

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Keppel Corp (KEP SP)
1H22: Solid Contribution From All Businesses Despite Some Headwinds

KEP reported net profit from continuing operations of S$434m, up 26% yoy and better than expectations due to strong contributions from the infrastructure and asset management businesses. We remain cautiously optimistic that its China property business would turn around in the medium term. KEP declared an interim dividend of S$0.15 which was higher than expected. Maintain BUY. Target price: S$10.11. 

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