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UOB KAYHIAN |
UOB KAYHIAN |
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Digital Core REIT (DCREIT SP) 1H24: Making Progress To Backfill Frankfurt And Los Angeles Data Centres
1H24 DPU of 1.80 US cents (-6.3% yoy) was in line with expectations. DCREIT has repositioned by acquiring an additional 24.9% stake in its Frankfurt data centre and 10% stake in its Osaka data centre. It has backfilled vacant space at its Frankfurt data centre and occupancy has improved 6.3ppt qoq to 98.5% after it signed several new leases. DCREIT provides 2025 distribution yield of 5.7% (KDCREIT: 4.8% and MINT: 5.9%). Maintain BUY. Target price: US$0.81.
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Riverstone Holdings (RSTON SP) Strong Earnings Expected; Target Price Raised To S$1.16
Despite a higher ROE and dividend yield, Riverstone is trading at an undemanding 17x 2025F PE vs peers’ average of 47x. The rise in US FDA import alerts flagging quality issues with China medical gloves, compounded with the US tariff hike, is likely to benefit Malaysian glove makers like Riverstone. Though the group faced shipment delays, management sees it easing. Expansion plans remain on track and we anticipate better margins. Maintain BUY with a higher target price of S$1.16.
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CGS CIMB |
LIM & TAN |
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Kerry Properties Property sales to drive profit recovery
■ Kerry’s upbeat sales of Mont Verra will boost its overall property sales bookings in FY24-25F, in our view. ■ We do not expect impairment provisions for Kerry’s farm land resumed by the government to impact its cashflow in FY24F. ■ Reiterate Add with a higher TP of HK$15.9 (still 70% discount to NAV). We believe Kerry will keep 1H24F DPS unchanged at HK$0.4.
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Digital Core REIT (US$0.62, down 0.5 cent) a leading pure-play data centre REIT listed in Singapore and sponsored by Digital Realty, reported 1H24 results and declared a distribution per unit of 1.80 U.S. cents for the six months ended 30 June 2024 of which an Advanced Distribution per unit of 0.48 U.S. cents for the period from 1 January 2024 to 19 February 2024 was paid on 4 April 2024. The distribution for the period from 20 February 2024 to 30 June 2024 will be paid on Friday, 20 September 2024 to Unitholders of record as at Thursday, 1 August 2024 Digital Core REIT’s market cap stands at US$810mln and currently trades at 0.9x P/B, with an annualized dividend yield of 5.8%. While assets are not as premium as Keppel DC REIT (1.4x PB, 4.5% yield) , its valuations are cheaper and it is the only alternative pure-play data centre SREIT. With heavy investments in data centres and a likely rate cut, we recommend an accumulate on weakness for Digital Core REIT. |
| LIM & TAN | MAYBANK KIM ENG |
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OUE REIT (S$0.29, down 0.5 cents) has announced higher revenue and net property income (“NPI”) for the financial period 1 January 2024 to 30 June 2024 (“1H 2024”). Revenue and NPI for 1H 2024 grew by 5.7% and 1.6% year-on-year (“YoY”), reaching S$146.7 million and S$117.1 million respectively. The better performance was attributable to the resilience of Singapore commercial properties and higher hospitality sector contributions. Taking into account increased finance costs, higher retention for working capital, and payment of 100% base management fees in cash, amount available for distribution for 1H 2024 was S$48.8 million. OUE REIT’s market cap stands at S$1.6bln, and currently trades at 0.48x P/B with an annualized dividend yield of 6.4%. Consensus target price stands at S$0.32, representing 10.3% upside from current share price. While there is limited upside to consensus TP with the recent run-up in share price, OUE REIT’s portfolio remains well-supported by the growing hospitality segment and stable performance of Singapore commercial properties. We recommend an “Accumulate on Weakness”.
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ISOTeam (ISO SP) Post pandemic recovery
Returned to profitability in 1H24 Isoteam bounced back to profitability in 1H24 with revenue rising 16.5% YoY to SGD62.7m and PATMI rising 34% YoY to SGD1.4m. Most importantly, management says the lower-margin or loss-making projects secured during the pandemic have all been completed. It’s orderbook of SGD182.4m as of 28 Jun 2024 points to an improved outlook, according to management.
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