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CGS CIMB |
UOB KAYHIAN |
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CapitaLand Ascendas REIT Acquisition contributions to boost 2H25F
■ 1H25 DPU of 7.477 Scts was broadly in line at 48.5% of our FY25F forecast. ■ End-1H25 portfolio occupancy was 91.8%. 2Q25 rental reversion was +8%. ■ Maintain Add rating with a higher DDM-based TP of S$3.15.
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Tech Manufacturers – Singapore Picking Three Tech Winners Of MAS’ EQDP; Top BUYs: FRKN, UMS, VALUE
Tech manufacturing stocks with good earnings growth visibility and positive catalysts should continue to see valuation re-rating as the valuation gap of 35-40% vs Malaysian peers remains wide. Our top picks are Frencken (target price: S$2.08) and UMS (target price: S$1.73) given their positive outlook of sequential earnings growth from their semiconductor customers. We also like VALUE for its attractive valuation and renewed growth profile from new customers. Maintain OVERWEIGHT on the sector.
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UOB KAYHIAN |
UOB KAYHIAN |
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Frasers Logistics & Commercial Trust (FLT SP) Double-Digit Reversion From Australia In 3QFY25; Rapid Backfilling In Singapore
FLT sustained positive double-digit rental reversion of 55.8% for new/renewal logistics leases based on an average vs average basis in 3QFY25. Vacant space at 2 Tuas South Link 1 was backfilled rapidly, reflecting strong demand for logistics space in Singapore. Its low aggregate leverage of 36.8% provides a debt headroom of S$521m after the divestment of 357 Collins Street. After stripping out capital distribution, FLT provides a decent FY27 yield of 5.8%. Maintain BUY. Target price: S$1.15.
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Frencken Group (FRKN SP) Positive Indicators For The Semiconductor Segment; Raise Target Price By 49%
Positive indicators in the semiconductor industry in Jul 25 include: a) the US allowing Nvidia to sell its H20 AI chips to China, b) TSMC reporting a 61% yoy increase in 2Q25 earnings and guiding for a 30% yoy revenue increase for 2025, and c) Samsung signing a US$16.5b deal to supply chips to Tesla. Frencken should also benefit from the positive outlook of its key customers. We estimate 2Q25 earnings of S$10m (+10% yoy) for Frencken. Maintain BUY with a higher target price of S$2.08.
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| LIM & TAN | LIM & TAN |
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CapitaLand Ascendas REIT / CLAR ($2.88, up 0.06), is pleased to report that distributable income for the six months ended 30 June 2025 (1H 2025) was stable at S$331.1 million, an increase of 0.1% year-on-year (YoY). Taking into account an enlarged unit base of approximately 4.4 billion (+0.7% YoY) following the issuance of new units pursuant to CLAR’s private placement in May 2025 to fund acquisitions, Distribution per Unit (DPU) for 1H 2025 declined slightly to 7.477 Singapore cents (-0.6% YoY). Gross revenue for 1H 2025 decreased by 2.0% YoY to S$754.8 million mainly due to the divestments of five properties in Australia (February 2024), Singapore (November 2024) and the US (June 2025), as well as the decommissioning of a property in the UK for redevelopment in June 2024. The decrease was partially offset by the acquisition of a property in the US in January 2025. Consequently, net property income decreased by 0.9% YoY to S$523.4 million. At $2.88, Capland Ascendas REIT is capitalized at $$12.9bln, trades at price to book of 1.3x, 18-19x forward PE, dividend yield 5.2% annualized DPU, 1 year target price $3.15, representing 12.5% upside potential from current price level. We have an “Accumulate on Weakness” rating given its strong balance sheet, healthy liquidity position and decent dividend yield and upside potential.
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Lendlease REIT ($0.565, up 1.5 cents) announced that for it’s 1H25 results, gross revenue and net property income (“NPI”) for FY2025 were 6.5% and 10.0% lower YoY, amounting to S$206.5 million and S$148.8 million respectively. This was mainly attributed to the upfront recognition of supplementary rent in relation to the lease restructuring of Sky Complex that was received in FY2024. On a proforma basis, after adjusting for the supplementary rent, gross revenue and NPI for FY2025 were 1.1% and 0.1% higher YoY respectively. Lendlease REIT’s market cap stands at S$1.4bln and currently trades at 0.6x PB, with an annualized dividend yield of 6.4%. Consensus target price stands at S$0.63, representing 11.5% upside from current share price. In view of lower interest rates and decent yield backed by fairly stable fundamentals, we recommend an Accumulate on Lendlease REIT. |
