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UOB KAYHIAN |
UOB KAYHIAN |
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REITs – Singapore Interest Rates To Eventually Ease
Tame inflation despite the reciprocal tariffs and nascent signs of weakness in the job market has led to expectations of two rate cuts in 4Q25. Maintain OVERWEIGHT. Our preferred BUYs are CICT (Target: S$2.72), FCT (Target: S$3.07) and LREIT (Target: S$0.80) for suburban retail, and DCREIT (Target: US$0.88) and KDCREIT (Target: S$2.87) for data centre, which are less affected by the reciprocal tariffs. We also like CLAR (Target: S$4.02) as it is a beneficiary of preferential tariff.
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Xiaomi Corp (1810 HK) Takeaways From Xiaomi YU7 & AI Glasses Launch Event; Strong Initial Demand
Xiaomi officially launched the YU7 SUV model, along with the AI Glasses and a range of other smartphones and IoT products. Specifications and pricing for the YU7 are in line, but its initial orders in the first hour surpassed 289,000 units, which is well above our/market expectations, and this is usually a solid indicator of positive share price performance in the coming days. Maintain BUY and keep target price at HK$69.90.
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LIM & TAN |
LIM & TAN |
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We highlight the key points from AIMS APAC REIT’s ($1.31, down 0.01) just released annual report: Amidst turbulent waters, AA REIT has built a strong foundation anchored by our four-pillared strategy: 1) Selective Investments & Developments, 2) Active Asset Management, 3) Prudent Capital & Risk Management and 4) Strategic Partnerships. Our strategy has proven effective and underlines our ability to shine a light on new opportunities which offer sustainable long-term returns for our Unitholders. At $1.31, AIMS APAC REIT is capitalized at $1.07bln and trades at 1.1x book, 7.3% yield and consensus 1 year target price of $1.41 implying about 8% upside we believe a “HOLD” rating is appropriate for now. We see the REIT being in a trading range of between “$1.20 - 1.40” and the price to book range to be between “1.0x - 1.2x”.
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We highlight the key points from SIA’s ($6.90, up 3 cents) annual report. Revenues reached a new record as SIA and Scoot carried 39.4 million passengers, their highest ever, while the net profit of $2.8 billion included a one-off non-cash accounting gain of $1.1 billion from the completion of the Air India-Vistara merger in November 2024 SIA’s market cap stands at $20.8bln and currently trades at 14.7x forward PE and 1.3x PB, with a dividend yield of 5.8%. Consensus target price stands at S$6.73, representing 2.5% downside from current share price. SIA faces a mixed outlook, with the recent withdrawal of Jetstar Asia from the low-cost carrier market presenting an opportunity for SIA’s subsidiary Scoot to gain market share and improve yields. However, this positive is overshadowed by the tragic Air India plane crash (where SIA holds a 25.1% stake) which, while not expected to have a material financial impact due to insurance and Air India’s standalone status, could affect consumer perception. More broadly, market consensus suggests SIA’s fundamentals are challenged by the likely end of the postCOVID travel boom and rising operating costs, limiting its ability to achieve significant year-on-year growth and leading analysts to largely recommend a “HOLD” rating on the stock. Like wise, we continue to recommend a HOLD on SIA. |
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