| PHILLIP SECURITIES |
CGS CIMB |
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Singapore REITs Monthly: Dec23 Rate cut expectations fuelled rally
The S-REITs Index continued to rally 8.9% in December after gaining 6.7% in November, on expectations of interest rate cuts in 2024. The top performer for the month was Prime US REIT (PRIME SP, BUY, TP US$0.37) - it gained 95.1%, while the worst performer was Lippo Malls Indonesia Retail Trust (LMRT SP, non-rated) - it fell 10.5%. The overseas commercial sub-sector was the outperformer in December, gaining 39.7%, lifted by Manulife US REIT’s recapitalisation plan. The worst performing sub-sector was overseas retail – it gained 2.1%, dragged by LMRT after Fitch downgraded its long-term issuer default rating to a ‘C’.
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Riverstone Holdings Returning to profit growth in FY24F
■ We think 4Q23F marks a fundamental inflection point for RSTON, with its net profit returning to yoy growth (+5% qoq, +48% yoy) on demand recovery. ■ We expect cleanroom demand to further improve in FY24F, while RSTON’s focus on customised gloves helps expand its healthcare segment margins. ■ Reiterate Add with a higher TP of S$0.88. We see likelihood of a special dividend being declared alongside its FY23F results announcement in Feb.
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LIM & TAN |
LIM & TAN |
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iFAST Corporation ($7.85, down 5 cents) announced that its Malaysian subsidiary Bondsupermart Sdn Bhd (“Bondsupermart Malaysia”), has obtained approval-in-principle from the Securities Commission Malaysia under the Regulated Market Operator Framework to carry out the regulated activity of operating a bond marketplace. The bond marketplace will be named Bondsupermart, and it aims to be a centralised and easily accessible marketplace to buy and sell bonds. Bondsupermart is committed to leverage on this accessibility to transcend geographical boundaries and connect individual investors, creating a global marketplace for all to participate in both the Malaysian Ringgit and the global bond market. iFAST Corporation’s market cap stands at S$2.3bln and currently trades at an expensive forward PE ratio of near 90x and 10x P/B ratio, with a low dividend yield of only 1%. Consensus 1 year target price stands at S$6.62, representing 16-17% downside from the current share price. Despite the positive news and a potentially better year ahead in FY24, we note that iFAST’s valuations are rich and the positive prospects have likely been priced into the share price and we note that based on consensus target price of $6.62, the downside risk is significant. Hence, we would “AVOID” the stock for now despite its better outlook in FY24.
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ESRLOGOS REIT / E-LOG (32 cents, unchanged) is pleased to announce the attainment of Temporary Occupation Permit (TOP) status for the Built-to-Suit redevelopment project at 21B Senoko Loop (the “Property”) for NTS Singapore Pte Ltd (“NTS”). E-LOG 4R strategy is gaining traction will become more evident as more of their older assets are rejuvenated and as management’s future proofing of these assets reach fruition. At 32 cents, E-LOG is capitalized at $2.5 billion and trades at 8-9% forward yield and near 1x book. Based on consensus 1 year target price of 36 cents, upside potential is about 13%. We maintain an ACCUMULATE rating on E-LOG. |
| MAYBANK KIM ENG | |
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Malaysia Airports (MAHB MK) All systems go for 2024
Maintain BUY with higher DCF-TP of MYR8.53 (+7%) We remain bullish on MAHB. 4Q23 results may come in strong and foreign airlines are showing more interest in flying to Malaysia than before preCOVID times. Moreover, PSCs in Malaysia will still be hiked by the historical 5-year cumulative CPI minus 0.1% on 11 Feb 2024 as stipulated under its current Operating Agreement (OA) with or without the new OA. We retain our earnings estimates and roll forward our valuation base year to endFY24E from end-FY23E and raise our DCF-TP to MYR8.53 from MYR7.96.
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