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PHILLIP SECURITIES |
MAYBANK KIM ENG |
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Advanced Systems Automation Ltd Entry into aquaculture
▪ Advanced Systems Automation Ltd (ASA)’s current business is in semiconductor manufacturing. It is diversifying into the aquaculture industry. ASA acquired 100% of LSO Organization Holdings Pte. Ltd. (LSO) for S$20mn. ▪ ASA believes the aquaculture industry is poised for sustainable growth of 4.6% CAGR from 2023 to 2032, reaching US$462.2bn by 2032. ▪ ASA is proposing a renounceable non-underwritten Rights Cum Warrants Issue to raise S$2.3mn to S$5.2mn for expenses and cash considerations for the LSO acquisition.
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Keppel REIT (KREIT SP) Holding ground
Improving operating metrics, elevated gearing KREIT reported 3Q distributable income of SGD53.7m, +3.9% QoQ, -1.6% YoY. Organic and inorganic top-line growth was offset by higher financing expense. Positive reversion continued at a low double-digit pace while occupancy improved sequentially for Australia and was steady elsewhere. Gearing and debt cost inched up. With rates poised to trend down, mgmt. noted potential for a stabilisation of asset values and consequential support for gearing. We tweak down our estimates but maintain our DDMbased TP of SGD1.05 and BUY rating.
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UOB KAYHIAN |
UOB KAYHIAN |
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Keppel REIT (KREIT SP) 3Q24: Benefitting From Higher Occupancies And Capital Values In Australia
KREIT benefitted from a recovery in Australia where NPI increased 17.4% yoy to S$72.8m in 9M24 and occupancy improved 1.4ppt qoq to 95.0%. 255 George Street was acquired at an attractive NPI yield of 6.5% and there is room for the property to be revalued higher. KREIT provides an attractive 2025 distribution yield of 6.6% (CICT: 5.4%, Suntec: 5.0%) and P/NAV is at 0.73x. Maintain BUY. Target price: S$1.25.
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Parkway Life REIT (PREIT SP) Maiden Acquisition In Third Core Market France
The acquisition of 11 nursing homes in France provides NPI yield of 6.5% and is DPU accretive by 1.6% despite being fully funded by an equity fund raising. The nursing home market in France is highly regulated and very fragmented. PREIT gained a foothold and strategic partner for further expansion in Europe. PREIT’s defensive strength is supported by its healthcare orientation, long WALE of 15.3 years and healthy aggregate leverage of 33.3%. Maintain BUY. Target price: S$5.12.
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MAYBANK KIM ENG |
UOB KAYHIAN |
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Gamuda (GAM MK) A sizeable win in Taiwan
Positive surprise; raising TP to MYR9.60 Gamuda’s latest MYR3.2b E&C win for a Taiwan MRT project has lifted its outstanding orderbook to MYR28.7b, further strengthening its earnings visibility. This contract win is a positive surprise and comes with MYR8.1b of additional works in about 3 years’ time, sustaining the project’s work momentum for at least the next 10 years. We maintain our earnings forecasts, having imputed job win assumptions, but raise our RNAV-based TP to MYR9.60 from MYR8.70. We reiterate our BUY call on the stock.
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Property – China Monitoring Sales Recovery In Tier 1 Cities; Expect Narrower Gap Between Mortgage Rates And Rental Yields Of China’s Major Cities
In the first three weeks of Oct 24, property transactions in Tier 1 cities have yet to fully exceed the volume observed in the three weeks following the 17 May policy combo. The National Day holidays might be a key factor affecting sales. The first-home mortgage rate in Guangzhou fell to 2.75%, and is moving closer to the city's average rental yield of 2.34%. However, we have yet to see further updates on destocking. Maintain MARKET WEIGHT.
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