| PHILLIP SECURITIES |
UOB KAYHIAN |
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Singapore Air Transport – Jan24 Peaking travel demand
SIA share price gained 1.8% in Jan, ahead of the 3Q24 earnings report to be announced on 20 Feb. Passenger volume in the seasonally strong quarter rose 19% YoY, slower than 2Q24’s +29% growth. SIA passenger load factor in Dec fell 0.3% YoY, the first decline since Sep 2021. This could lead to lower fares to fill seats. Cargo volume returned to negative growth in Dec (-0.9%) after 4 months of YoY gains. We expect travel demand to ease after the Dec peak quarter. Cargo recovery is clouded by weaker economic conditions and lower manufacturing outputfrom Asia. We are UNDERWEIGHT on air transportation.
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CDL Hospitality Trusts (CDREIT SP) 2H23: Trajectory For Gradual Recovery Remains Intact
While CDREIT’s room rates remain elevated in Singapore, demand moderated and occupancy eased 6.2ppt yoy to 79.3% in 4Q23. Recovery in 2024 remains intact with a pickup in MICE events, a strong line-up of concerts, and Singapore’s 30-day visa-exemption arrangement with China. GCWH had completed full renovation of its 549 rooms in Jun 23. Residential build-to-rent project The Castings in the UK will start contributing in 2H24. Maintain BUY for a 2024 distribution yield of 6.3%. Target price: S$1.48.
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CGS CIMB |
MAYBANK KIM ENG |
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CDL Hospitality Trust Occupancy to drive the next leg of growth
■ 2H23 RevPAR growth slowed to 3.7% (1H23: 23.3%), but FY23 RevPAR reached 104-144% of 2019 levels in five out of seven of CDREIT’s markets. ■ FY23 DPU missed at 91% of our FY23F on higher net interest & tax expense. ■ Reiterate Add with a lower DDM-based TP of S$1.25.
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Keppel REIT (KREIT SP) Steady as she goes
Resilient operations; top-ups stabilise distributions KREIT reported 2H DPU of SGD5.8cts, flat HoH/-1.7% YoY. FY DPU of 5.8cts, -2% YoY was 2% below cons/our est. Organic growth was offset by higher borrowing costs. Portfolio occupancy rose sequentially. High single-digit positive reversion was achieved for the full year. Portfolio value was stable. While transitional vacancy may creep up, lowering distribution from operations, top-ups will mitigate the impact. We lower ests. by 2-4% but factoring in a lower discount rate, we keep our DDM-based target price of SGD1.0 and BUY rating intact.
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| MAYBANK KIM ENG | LIM & TAN |
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AIMS APAC REIT (AAREIT SP) Earnings in line
Maintain BUY; raise TP AAREIT posted 3QFY24 DPU of SGD2.34cts, 0% QoQ/-9.7% YoY mainly on an enlarged unitholder base from its equity raising. 9MFY24 DPU of SGD6.99cts forms 76% of our FY est. While the mark-to-market narrative has not changed, we have progressed through much of it (see overleaf). While we still see positive rental growth extending into 2024, especially from its logistics ramp-up, contribution from asset enhancements (AEI) and redevelopment will likely drive growth. We raise our FY24E DPU by c.1% on improved NPI margin, and lift our TP by 2% to SGD1.39 on a lower discount rate. Maintain BUY on attractive FY25E DPU yield of 7.5%.
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Keppel Corporation ($7.16, up 2 cents) reported its highest net profit in history of S$4.1 billion for the full year ended 31 December 2023. Bolstered by a S$3.3 billion disposal gain from the divestment of the offshore and marine (O&M) business, FY23’s net profit more than quadrupled the net profit of S$927 million in FY22. Return on Equity (ROE) was 37.9% in FY23, compared to 8.1% in FY22. Keppel’s market cap stands at S$12.6bln and currently trades at 13.2x forward PE and 1.2x PB, with a dividend yield of 4.7% (exclusive of SMM distributions in specie). Gearing stands at 0.9x and consensus target price stands at S$7.89, representing 10.2% upside from current share price. We continue to like Keppel Corp for its asset monetisation plans, fund management growth and green initiatives alongside its record profit in FY23, which saw a 19% increase in continuing operations even after its profitable disposal from SMM. We thus continue to maintain an Accumulate on Keppel Corp |
