buysellhold july.23

UOB KAYHIAN

UOB KAYHIAN

iFAST Corporation (IFAST SP)

2Q24: Steady AUA Growth; ePension On Track

 

iFAST’s 2Q24 earnings of S$16m (+346% yoy, +10% qoq) were above expectations, with 1H24 forming 53% of our full-year estimate. The HK ePension division and record AUA (+19% yoy, +6% qoq) continued to drive strong 2Q24 performance. According to the latest schedule published, two MPF trustees have been onboarded, while the remaining are expected to onboard from Sep 24 to end-25. Maintain HOLD with a 5% higher target price of S$8.03 (S$7.64 previously).

 

 

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Keppel DC REIT (KDCREIT SP)

1H24: Singapore Provided Strong Positive Rental Reversion

 

1H24 results were above our expectations. KDCREIT clocked strong positive rental reversion of more than 40% for a major renewal contract in Singapore in 2Q24, a reflection of strong demand and tight vacancy locally. Revenue contribution from Singapore grew 6.6% yoy in 1H24. KDCREIT benefits from the extremely tight vacancy rate of 1.0% in Singapore and is expected to maintain healthy and positive rental reversion in 2H24. Upgrade to BUY. Target price: S$2.09. 

 

 

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UOB KAYHIAN

UOB KAYHIAN 

Mapletree Industrial Trust (MINT SP)

1QFY25: Steady Execution In Singapore; Focused On Expansion In Data Centres

 

MINT achieved broad-based positive rental revision of 9.2% in 1QFY25 for renewed leases across all property segments in Singapore. It has secured an established healthcare operator as a replacement tenant for data centre at Brentwood, Tennessee. It plans to recycle its assets and diversify into established data centre markets in Asia Pacific and Europe. MINT provides FY25 distribution yield of 5.9% (DCREIT: 6.3% and KDCREIT: 4.9%). Maintain BUY. Target price: S$2.78.

 

 

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SIA Engineering (SIE SP)

1QFY25: Earnings A Slight Miss, But May Catch Up In The Rest Of FY25

 

SIAEC’s 1QFY25 net profit of S$33.2m (+23.0% yoy, -4.8% qoq) was slightly behind our projection, at 21.4% of our full-year forecast. 1QFY25 operating profit was weaker than expected, due to SIAEC’s lumpiness in project revenue recognition and supply chain constraints. We remain hopeful that SIAEC’s earnings performance may catch up in the rest of FY25. We see little share price downside given its benign valuation and proactive share buybacks. Maintain BUY. Target price: S$2.70. 

 

 

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OCBC OCBC

Mapletree Industrial Trust

Broad-based solid performance


• 1QFY25 (financial year ending Mar 2025) distribution
per unit (DPU) rose 1.2% year-on-year (YoY) to 3.43
Singapore cents
• Healthy portfolio weighted average rental reversions
of 9.2% for renewal leases in Singapore; higher
occupancy of 91.9%
• Aggregate leverage ratio increased to 39.1%, with
82.1% of debt hedged


Investment thesis
Mapletree Industrial Trust (MINT) has a sizeable portfolio
of industrial assets in Singapore which includes Data Centres, Hi-Tech Buildings, Flatted Factories and Business Parks. It has also successfully grown its data centres portfolio in the US and Canada, and more recently made its maiden entry into the Japan market in Sep 2023 with the acquisition of a data centre in Osaka. As such, we believe MINT offers investors a proxy to the fast-growing digitalisation and data outsourcing trends, and expect management to continue to shift its portfolio mix
towards more data centres as compared to old economy industrial assets. Although the macroeconomic outlook remains uncertain, MINT’s solid financial position, high quality management team and strategy of scaling up its data centre and Hi-Tech exposure would allow it to better withstand the uncertainties ahead, in our view.

 

First REIT
Steady as she goes

• IDR and JPY depreciation continues to weigh on financial performance and gearing
• Cost of debt remains stable with 86.6% of debt on fixed rates or hedged, and no refinancing requirements until May 2026
• 2Q24 distribution per unit (DPU) of 0.60 Singapore cents declared, constituting 25% of our full year forecast and meeting our expectations

Investment thesis
First REIT is a Singapore-listed healthcare
real estate investment trust (REIT) with a portfolio of 32 nursing homes and hospitals located in Singapore, Japan, and
Indonesia. Its relatively long weighted average lease expiry (WALE) of 11 years as at 30 Jun 2024 provides strong cash flow visibility, while built-in rental escalation clauses in its well-structured master leases provide potential for rental growth and upside sharing with tenants. With the introduction of its 2.0 Growth Strategy, First REIT’s risk profile has been improving, as it seeks to diversify across tenants and geographies, while structural megatrends such as an ageing population and increasing demand for quality healthcare support demand for its assets. Although higher for longer interest rates may slow First REIT’s pace of diversification into
Developed Markets (DM), we think its current steady state and attractive distribution yield make it a potential defensive addition to portfolios.

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