buysellhold july.23



NikkoAM-StraitsTrading Asia ex Japan REIT ETF

Resilient dividends despite rate hikes


 We valueNikkoAM-StraitsTrading Asia ex Japan REIT ETF (AXJREITS) using a combination of historical dividend yield spread and price-to-book ratios. Using these two valuation methods, the target price are S$0.80 and S$0.84, respectively. Applying equal weightage to both valuations, we initiate coverage with an ACCUMULATE recommendation and target price of S$0.82.



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CapitaLand Ascott Trust (CLAS SP)

Benefitting From Proliferation Of Large-scale Events


Portfolio RevPAU increased 6% yoy to S$135 in 1Q24, in line with pre-pandemic levels. There is more upside as portfolio occupancy was 73% and remains below pre-pandemic levels of 88%. Taylor Swift’s The Eras Tour boosted contributions from Singapore and Australia in 1Q24. The Eras Tour will be held in the UK (June and August) and France (May and June). Olympic Games is a catalyst for France in 3Q24. CLAS provides 2024 distribution yield of 6.2%. Maintain BUY. Target price: S$1.40.



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Higher Marketplace Commission And Reduction In Subsidies Indicate Better Competition Landscape


We expect SEA’s adjusted EBITDA to continue showing sequential improvement in its upcoming 1Q24 results despite it being a seasonally weaker quarter. This is due to an improved landscape for e-commerce, as evidenced by the rise in take rates and subsidy cuts by SEA and its key competitor. The gaming segment is also expected to do well from a higher average monthly player count. We raise our target price by 24% to US$78.39 to reflect the better e-commerce industry landscape. Maintain BUY


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Suntec REIT ($1.10, up 0.01) reported distributable income from operations of S$44.0 million for the period from 1 January to 31 March 2024 (“1Q 24”), 1.1% lower than the quarter ended 31 March 2023 (“1Q 23”). Distribution per unit (“DPU”) from operations of 1.511 cents to unitholders was 1.8% lower year-on-year. 

With the absence of capital distribution in 1Q 24, DPU declined 13.0% year-on-year. Operational performance from the Singapore Office, Retail and Convention portfolio continued to strengthen, with higher financing costs and vacancies from 55 Currie Street in Adelaide, Southgate Complex in Melbourne and The Minster Building in London continuing to weigh on the distributable income. On the capital management front, Suntec REIT refinanced $950 million loans due in FY 2024 and FY 2026 with an estimated savings of approximately $3.1 million per annum.

At its last traded price of $1.10, Suntec is capitalized at $3.2billion and trades at 20x PE, 0.5x price to book and 5.45% annualized div yield. Bloomberg consensus 1 year target price of $1.23 implies a potential upside of 12%. We maintain an “Accumulate” rating on Suntec given its undemanding valuations and potential to benefit from interest rate 2200 cuts starting in 2H’24.


Frasers Centrepoint Trust / FCT ($2.18, up 0.02) is pleased to report a DPU of 6.022 Singapore cents for the six-month period from 1 October 2023 to 31 March 2024 (“1H24”), coming in line with expectations.

FCT’s portfolio of high-quality suburban retail properties has strong competitive advantages due to the malls’ proximity to populous residential estates, healthy shopper traffic and excellent connections to public transportation network. FCT is well-positioned to ride on rising trends such as hybrid work arrangement and the shift to omnichannel retailing. These attributes and the focus on essential trades and services underpin the resilience of FCT’s performance.

FCT’s market cap stands at S$3.94bln and currently trades at 20x forward PE and 0.94x PB, with a dividend yield of 5.5%. We like FCT for its niche position in the Singapore suburban retail market, and its defensive assets. We like that operating metrics continues to improve in it’s latest set of results and that it’s latest AEI is also progressing as planned. Bloomberg consensus 1 year target price is $2.48, implying a potential upside of 14%. As such, we maintain an Accumulate rating on FCT


ASMPT (522 HK) 1Q24: Solid Results, More Positive Updates To Advanced Packaging Business

ASMPT’s 1Q24 results are better than expected thanks to strong margins, but 2Q24’s revenue guidance was below our and consensus estimates due to sluggish sales of mainstream tools.

Nevertheless, the advanced packaging business remains robust, and we see more positive developments with TCB and HB tools, including progress in leading foundry clients, new order wins, and demo shipments to new HBM clients. Maintain BUY and trim target price to HK$120.00.

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