| MAYBANK KIM ENG |
MAYBANK KIM ENG |
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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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MAYBANK KIM ENG |
UOB KAYHIAN |
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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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Nanofilm Technologies International (NANO SP) 9M23: Revenue In Line But Expect Weakness To Continue In 4Q23; Downgrade To SELL
Nanofilm reported 3Q23 revenue of S$55m (-19% yoy, vs S$73m in 1H23). 9M23 revenue is in line with our expectation, forming 80% of our full-year estimate. The operating environment for 3Q23 remains challenging due to weaker consumer sentiment, with expected market volatility in 4Q23. 2024’s outlook is also uncertain. We trim our 2023 and 2024 earnings by 98% and 34% respectively. Reduce target price by 34% to S$0.66. Downgrade to SELL on a more challenging mid-term outlook.
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| UOB KAYHIAN | UOB KAYHIAN |
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Singapore Airlines (SIA SP) 2QFY24: Results Beat Expectations; Full-year Profit Likely To Hit A New Record
2QFY24 net profit of S$707m beat our guidance of S$420m-550m on lower-thanexpected operating costs. We expect an even stronger performance for the upcoming 3Q and a record level of profit for the full year. Capacity supply-demand dynamics may stay tight for longer, leading to slower moderation of pax yields, as delays in new aircraft deliveries by aircraft OEMs and the recent GTF engine issues may limit the sector’s capacity growth. Upgrade SIA to HOLD. Target price: S$6.80.
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StarHub (STH SP) 3Q23: Strong Results, Driven By Broad-based Growth
For 9M23, StarHub reported higher service revenue (+8.2% yoy) and core PATMI (+29.1% yoy) from broad-based growth across all business segments. This was also supported by a robust 3Q23 with service revenue and PATMI growing 8.9% yoy and 36.1% yoy respectively. However, margins are expected to soften going into 4Q23 from increased DARE+ investments. Maintain BUY with an unchanged target price of S$1.37.
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