| UOB KAYHIAN |
UOB KAYHIAN |
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Offshore Marine – Singapore Unallayed Optimism For The Sector
Our bullish outlook for the offshore marine sector remains unchanged with both shallow and deepwater assets marching well past 5–8-year highs, supported by a high oil price. After struggling with instability in 2023, the outlook for offshore wind in 2024 appears much better with policy support providing further impetus for growth. We remain optimistic that the industrials and shipyard sectors in Singapore can repeat their share price outperformance in 2024. Sector rating: OVERWEIGHT.
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CapitaLand Ascott Trust (CLAS SP) 2H23: Broad-based Growth With More Room For Recovery In Asia Pacific
Portfolio RevPAU increased 4% yoy to S$161 in 4Q23, 3% above pre-pandemic levels. There is more upside for recovery as average portfolio occupancy was stable at 77% in 4Q23 and remains below pre-pandemic levels of 84%. CLAS benefits from continued asset recycling and asset enhancements. It has completed renovation for The Robertson House, while works on seven other properties are ongoing. CLAS provides attractive 2024 distribution yield of 6.2%. Maintain BUY. Target price: S$1.45.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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CapitaLand Ascott Trust (CLAS SP) Balancing growth and stability
Improved operations; boost from one-off gains CLAS reported 2H DPU of SGD3.8cts, +14% YoY. Full year DPU was 6.57cts, +16% YoY, 11%/14% ahead of our/cons est. Adj. for realized FX gains, 2H DPU of SGD3.0cts. was flat YoY while FY DPU was +14% YoY. Stronger operating performance of existing portfolio and contributions from acquisitions were mitigated by higher financing cost. Top-line growth was led by higher RevPAU. China and Vietnam improved sequentially. Factoring in recent acquisition, share placement and a lower discount rate, our estimates are relatively unchanged while our DDM-based TP goes up by 10% to SGD1.10. Maintain BUY.
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Mapletree Pan Asia Comm.Trust (MPACT SP) Navigating rate and FX headwinds
Steady operations offset by financing challenges MPACT reported 3QFY24 DPU of SGD2.2cts, -1.8% QoQ/-9.1% YoY. 9M DPU of SGD6.62c came in at 76.5% of our FYE. Improving operational performance of local and overseas assets was offset by stronger SGD, higher borrowing costs and absence of one-off gains. Committed occupancies rose across markets. Baring Greater China, reversion was positive. Currency swaps capped funding cost. We raise our estimates factoring in lower funding cost and a lower discount rate. Our TP rises to SGD1.40 from SGD1.25. Maintain HOLD.
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| CGS CIMB | LIM & TAN |
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Mapletree Pan Asia Commercial Trust Better operationally; FX, interest costs bite
■ Rental reversion was higher at 4.1% in 9MFY3/24 (1HFY24: 3.2%), with narrowing negative reversions at Festival Walk, China, and Japan properties. ■ Electricity contracts for Singapore assets have been locked in at c.33% below the current rates effective Nov 24, management said. ■ Reiterate Add on better operational performance and positive reversions
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Keppel REIT ($0.895, down 2 cents) announced $109.7 million in distribution to Unitholders for 2H 2023 compared to the distribution to Unitholders of $110.4 million for 2H 2022. The distribution to Unitholders for FY 2023 was $218.7 million, a slight 1.0% lower year-on-year due mainly to increased borrowing costs. 2H 2023 DPU was 2.90 cents with FY 2023 DPU at 5.80 cents. Based on the market closing price of $0.895 per Unit, distribution yield was 6.5%. 2H 2023 and FY 2023 NPI were higher by 7.0% and 3.7% at $92.5 million and $182.4 million respectively due mainly to higher rentals and occupancy for the Singapore properties. As at 31 December 2023, Keppel REIT’s aggregate leverage was 38.9% with 75% of its borrowings on fixed rates. All-in interest rate was 2.89% per annum, with interest coverage ratio and adjusted interest coverage ratio at 3.4 times and 3.0 times respectively. Weighted average term to maturity of borrowings was 2.4 years. Keppel REIT’s sustainabilityfocused funding formed 64% of total borrowings, a reflection of Keppel REIT’s portfolio of green-certified office properties. Keppel REIT’s market cap stands at S$3.4bln and currently trades at 20x forward PE and 0.67x PB, with a dividend yield of 6.5%. Consensus target price stands at S$0.99, representing 10% upside from current share price. Keppel REIT’s share price has appreciated 6.5% since our last report and distributable income is stable in Keppel REIT’s latest set of results. We maintain an “Accumulate on Weakness” recommendation on Keppel REIT at under the 90 cents level as we believe valuations are decent and the REIT is a beneficiary of the expected interest rate cuts in FY2024. |
