buy sell hold 2021



Yangzijiang Shipbuilding (Holdings) (YZJSGD SP)

Strong Deliveries And Order Wins, With Revenue Visibility Well Into 2026

The lack of financials in its 1Q23 business update did not detract from what was a strong quarter for YZJ with 16 vessels delivered ytd and well on track to its target of 57 for the year. With US$1.2b in new order wins, the company continues to fill its shipbuilding slots into 2026, underpinning its revenue visibility. A move towards a payout ratio instead of an absolute dividend should bolster market confidence. Maintain BUY. Target price: S$1.58.

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Preparing For A Warmer 2H23

While wary of the “Sell in May” phenomenon, we continue to expect Malaysian equities to stage significant gains in 2H23, as investors price in an eventual global economic pickup, and domestically, a stable political environment and improving trading liquidity. 2H23’s focus investment themes include US-China trade diversion, semiconductor sector recovery, ESG agenda, China’s reopening and blockchain, which favour technology, commodities (particularly O&G stocks) and tourism-related stocks. 

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First REIT

Mixed results but fundamentals still
in play

• 1Q23 rental income up 4.9% year-on-year (YoY) driven by first full quarter of rental contribution from Japan acquisitions
• Distribution per unit (DPU) down 6.1% due to higher financing costs, and IDR and JPY depreciation
• Higher gearing ratio of 39.0% with all-in cost of borrowing at 4.7%

Investment thesis
First REIT is a Singapore-listed healthcare real estate investment trust (REIT) with a portfolio of 32 nursing homes and hospitals located in Singapore, Japan, and Indonesia. Its relatively long weighted average lease expiry (WALE) of 12.2 years provides strong cash flow 
visibility, while built-in rental escalation clauses in its well-structured master leases provide potential for rental growth and upside sharing with tenants. With the introduction of its 2.0 Growth Strategy, First REIT’s risk profile has been improving, as it seeks to diversify across tenants and geographies, while structural megatrends
such as an ageing population and increasing demand for quality healthcare support demand for its assets. Given an attractive forecasted distribution yield of 9.7% in FY23, we think First REIT is a potential defensive addition to portfolios.


Frasers Centrepoint Trust (S$2.32, up 1 cent): Frasers Centrepoint Asset Management Ltd. (“FCAM” or the “Manager”), the manager of Frasers Centrepoint Trust (“FCT” or the “Trust”), reported a DPU of 6.130 Singapore cents for the six-month period from 1 October 2022 to 31 March 2023 (“1H2023”). This was flat as compared to 1H2022 DPU of 6.136 Singapore cents.

At $2.32, market cap of Frasers Centrepoint Trust is S$3,943mln, FY22 P/E is 19.0x, current P/B is 1x, dividend yield is 5.3% and its aggregate leverage as at 31 March 2023 stood at 39.6%. We recommend HOLD for its stable dividend yield and its moderate P/B ratio.


First REIT ($0.255, up 0.5 cent) announced its 1QFY23 results yesterday and reported a distribution per unit (“DPU”) of 0.62 Singapore cents for 1Q 2023, 6.1% lower than 0.66 Singapore cent for the same period a year ago (“1Q 2022”). The payment date for 1Q 2023 will be on 26 June 2023.

First REIT’s market cap stands at S$526mln and currently trades at 0.9x PB, with a forward annualized dividend yield of 9.5%. Consensus target price stands at S$0.305, representing 17.3% upside from current share price.



Parkway Life REIT

Progressing as planned


■ 1Q23 DPU of 3.65 Scts was in line at 24.8% of our FY23F forecast.

■ Singapore revenue grew on higher rents from new master lease agreement.

■ Upgrade to Add with a lower TP of S$4.50. 


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