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CGS CIMB |
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Keppel DC REIT Waiting for acquisitions
3Q23 DPU of 2.492 Singapore cents (-3.6% YoY) was in line with our expectations. It formed 25.1% of our FY23e forecast. 3Q23 revenue/NPI growth of 0.5%/0.8% YoY, driven by contributions from acquisitions and positive income reversions and escalations, was more than offset by higher finance costs (+56.9% YoY) and less favourable forex hedges. Upgrade from NEUTRAL to BUY with an unchanged DDM-derived target price of S$2.26 due to the recent share price performance. DPU growth catalysts include more accretive acquisitions and lower-than-expected interest costs. Organic growth will stem from renewals in FY24e (27.7% of leases expire in 2024). We expect revenue growth of c.4% for FY24e, barring contributions from potential acquisitions. The current share price implies FY23e/24e DPU yields of 5.2%/5.4%. No change to our forecasts.
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AEM Holdings Ltd Awaiting return of customer demand over FY24-25F
■ We expect AEM to issue its 3Q23F business update on 10 Nov 2023. We see 3Q23F revenue possibly declining 55.1% yoy to S$92.5m. ■ 3Q23F could possibly see a headline net loss of S$20.4m (in our view) due to S$26.7m expense relating to its arbitration settlement with Advantest. ■ Our FY23-25F forecasts are unchanged for now. On rollover to FY25F, our TP increases to S$4.11, and we upgrade our call to Add (Reduce previously).
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CGS CIMB |
CGS CIMB |
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Grand Venture Technology Ltd Looking forward to FY25F
■ We expect GVT to report a 3Q23F net profit of S$1.61m (-53.3% yoy, -14.8% qoq) on 8 Nov 2023. ■ GVT expects its semicon business to see a recovery in FY24F as customers’ excess inventories could have been depleted by then. ■ We think GVT’s new front-end customers could start business with the group in FY24F, with demand from such customers growing further in FY25F. ■ Our forecasts are unchanged, but our TP increases to S$0.62 as we rollover to FY25F. Upgrade to Add from Reduce on revenue recovery over FY24-25F.
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Bank of China Addressing Malaysian investor feedback
■ We hosted BOC in Malaysia on a roadshow, with investor interest on issues relating to profits, NIM, dividends, property, asset quality and loan growth. ■ We continue to be confident in FY23F – 25F stability of profits and dividend payout ratios, despite continued revenue pressures & economic challenges. ■ NIM pressure remains greatest between 2Q23 and 3Q24F, with impacts from mortgage backbook pricing of about 6bp in FY24F, in our view. ■ BOC remains our top SOE bank pick. Reiterate Add rating, TP unchanged at HK$3.60.
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LIM & TAN |
LIM & TAN |
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Parkway Trust Management Limited (the “Manager”), as manager of Parkway Life Real Estate Investment Trust / PLife REIT ($3.66, up 0.01), one of Asia’s largest listed healthcare real estate investment trusts, is pleased to announce the acquisition of two nursing homes in the Osaka Prefecture — HIBISU Shirokita Koendori and HIBISU Suita from K.K. FDS (“FDS”) for a total consideration price of JPY1,766.4 million (approximately S$16.4 million). PLife REIT, has through its wholly-owned subsidiary, Parkway Life Japan Pte. Ltd., entered into a Tokumei Kumiai agreement (or silent partnership, similar to the holding structure for PLife REIT’s previous acquisitions in Japan) for the acquisition of the Properties. The acquisition will be made at approximately 11.9% below valuation and is expected to complete by Q4 2023, bringing PLife REIT’s Japan portfolio to 59 properties, totalling approximately S$710.7 million in value. We like that the acquisition of the 2 new properties in Japan will help to extend the WALE of PLife REIT from 16.7 to 16.8 years and at the same time help to expand their assets in Japan which is currently one of the most attractive markets in the world, thanks to investing guru Warren Buffet’s big investment moves into the market earlier this year, helping to catalyze a strong re-rating of the market. However, we note that PLife REIT is not cheap, trading at 22x PE, 4% yield and 1.6x price to book. Maintain our “HOLD” recommendation on Plife REIT
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The Ascott Limited (Ascott), a lodging business unit wholly owned by CapitaLand Investment / CLI ($3.04, down 0.06), is on a strong growth trajectory with The Crest Collection brand. With a 40% increase in total number of units year-on-year since 2022, the brand has over 1,500 units across 12 properties that are both operating and in the pipeline. First unveiled in 2016 in France, The Crest Collection is a portfolio of charming bespoke hotels and serviced residences that has since taken flight globally. With seven properties operational in Singapore, Jakarta, Paris, Penang and Tours, Ascott is slated to open The Crest Collection properties further in London, Bucharest, Hanoi, Tokyo and a fourth property in Paris.
We like CLI’s strategic moves to enhance and re-brand their asset portfolio and in the process raise their recurring income streams to future proof business visibility going forward. At $3.04, CLI is down a significant 24% from Jan’23’s high of $3.98 and we see value emerging with the stock trading near its book value, and PE coming down to 18x and yielding near 4% dividend yield. 1-year Bloomberg consensus target price of $4.00 implies a potential upside of 32%. Asset recycling initiatives and monetization plans could catalyse the stock price higher. Maintain “Accumulate”. |
