buysellhold july.23



Lendlease Global Comm REIT (LREIT SP)

Driving resilience


Positive reversions and stable occupancy LREIT’s 1QFY24 business update confirms steady operations. Highlights were positive mid-teen rental reversion led by 313@somerset, an Orchard Road mall, while portfolio occupancy was stable. Gearing is relatively unchanged with guidance for interest costs to inch up with no refinancing in the current fiscal year ending Jun-24. Narrative on capital recycling remains unchanged but focus is on asset enhancement opportunities. All in, a stable set of business updates. We lower our DPU and cut our DDMbased TP by c.13% to SGD0.70, also factoring in higher cost of capital. BUY rating maintained. 



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Frasers Hospitality Trust (FHT SP)

A generally upbeat 2H23


FY23 DPU in line; maintain BUY FHT posted 2HFY23 revenue of SGD61.0m (c.-2%HoH/+18%YoY). FY23 DPU of SGD2.4426cts forms 101% of our FY23 forecast. FY23 revenue/NPI rose by c.44%/50% on a same-store basis, excluding Sofitel Sydney Wentworth that was divested in Apr’22. Travel demand proved robust in 2H23, shown by continued RevPAR growth in most markets. Looking ahead, while a strong event pipeline and recovery tailwinds are likely to support RevPAR, we expect growth from room rates and occupancy to gradually normalize.



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StarHub (STH SP)

Ramping up investments


9MFY23 earnings exceed expectation

9MFY23 EBITDA at SGD343.7m (+1.3% YoY) exceeded/in-line with MIBG/consensus expectations at 78%/75% of FY23E forecasts. Improvement in PATMI to SGD113.9m (+29% YoY) was mainly lifted by higher profit from operations, offset by higher taxation. We have adjusted our FY23-25E PATMI forecast for StarHub by 10.7-18.2% on lower-thanexpected depreciation and finance cost due to a shift of capex to opex expenses for part of the core business (mainly 5G network and IT). We estimated SGD90m of investment expected in 4Q23 possibly into 2024 as the group continues to harness positive outcome from the DARE+ programme. Our DCF-based TP has increased to SGD1.10 from SGD1.08. Maintain HOLD. 



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Singapore Airlines

Bated breath


• Record half-year operating and net profits on the back of record load factors and robust travel demand

• Interim dividend of 10 Singapore cents per share announced

• Expect FY24 (financial year ending 31 Mar 2024) to be a bumper year, but normalisation lurks on the horizon


Investment thesis

Singapore Airlines (SIA) reported a record performance for1HFY24, with net profit coming in at SGD1.44b, up 55.4% year-on-year (YoY) on the back of robust travel demand and SIA’s sustained lead in capacity postreopening. Management has guided positively on air travel demand for the rest of FY24, which is expected to offset softer performance from the cargo business. While we expect SIA to continue to deliver excellent results for the rest of the year, we note that its operating environment is set to become more competitive, as regional airlines continue to return more international capacity to the market. A recessionary outlook also remains a key overhang on discretionary travel expenditure, while geopolitical tensions could pose further upside risks to oil prices and inflationary pressures. We make some adjustments to our forecasts and revise our fair value estimate to SGD7.29. SIA continues to have long-term value in investors’ portfolios, and current valuations are reasonable, in our view.








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