ANALYSTS SAY: Buy, Sell, Hold (6 Feb)

CGS INTERNATIONAL

CGS INTERNATIONAL

Singapore Exchange

Interest lies beyond earnings delivery

■ We regard SGX’s 1HFY6/26 adjusted net profit of S$357.1m (+11.5% yoy, +23.4% hoh) as in line given the seasonally lower opex (-8.0% hoh).

■ FICC and cash equities revenue grew double-digit yoy and hoh, negating a muted income equity derivatives revenue due to lower treasury income.

■ Reiterate Add, underpinned by tailwinds of sustained trading volumes across its suite of product offerings; our TP is unchanged TP at S$19.10.

■ Key re-rating catalyst lies in whether new initiatives under Singapore’s equity market review will translate to stronger earnings growth beyond FY26F.

Rtead More ...

CapitaLand Ascendas REIT

Portfolio rejuvenation continues

■ 2H/FY25 DPU of 7.528/15.005 Scts was in line at 49.1%/97.9% of our FY25F forecast.

■ Management guided for FY26F rent reversions to be at mid-single-digit level.

■ Maintain an Add rating with a lower DDM-based TP of S$3.21.

Read More ...

UOB KAYHIAN

OCBC GROUP RESEARCH

Keppel (KEP SP)

A Breakout Year As Asset-Light Strategy Drives ROE And Profits

Highlights

• Strong 21% yoy growth in recurring income for 2025 and higher contributions from all business segments.

• Total DPS rose 38% yoy with more in store as the company pays out from yet-to-be completed deals and continues monetising its S$13.5b in non-core assets.

• Maintain BUY with a higher target price of S$13.23.

Read More ...

CapitaLand China Trust (CLCT)

Near-term outlook remains challenging | Rating: SELL

Key highlights

• FY25 DPU disappointed, with core DPU (excluding one-off) falling 20.5% YoY to 4.49 cents, below expectations.

• Gross revenue and NPI declined ~9% YoY, reflecting weaker operating conditions and asset divestments.

• A one-off distribution of 0.33 cents partially cushioned the decline, but underlying performance remains weak.

Portfolio performance

• Retail assets:

  • Same-store retail revenue fell 4.9% YoY due to AEI downtime, slightly lower occupancy, and negative rental reversions (-2.4%).

  • Positively, shopper traffic and tenant sales improved, suggesting potential recovery post-AEI.

  • Management plans to acquire a retail asset in FY26 to replace lost income from CapitaMall Yuhuating and may divest mature assets over time.

• Business Parks:

  • Revenue declined 9.3% YoY.

  • Occupancy improved slightly, but rental reversions remained weak (-8.1%), with softness expected to continue into FY26.

• Logistics Parks:

  • Revenue grew 5% YoY, supported by high occupancy (98.1%).

  • However, rental reversions were sharply negative (-24.5%), highlighting pricing pressure.

Balance sheet & funding

• Aggregate leverage increased to 40.7%, following redemption of perpetual securities and lower portfolio valuations.

• 60% of debt is now CNY-denominated, above management’s 50% target.

• Cost of debt edged down to 3.32%, with further easing expected in FY26.

Outlook & valuation

• FY26 DPU forecast cut by 14.5%, implying another 11.4% YoY decline before any acquisition benefits.

• DPU growth is expected to turn positive only in FY27.

• Fair value reduced to SGD 0.655; rating downgraded from HOLD to SELL.

• Despite a headline yield of ~6.7%, valuation looks unattractive given the weak DPU outlook.

Investment takeaway

CLCT’s earnings visibility remains poor in the near term due to declining distributions, negative rental reversions, and elevated gearing. While management actions may stabilise performance over time, current valuations do not fully reflect the downside risks, making the risk-reward unfavourable.

AIMS APAC REIT (AAREIT SP)

Resilient rental reversion sustained

9M26 beat forecast

9M26 DPU of SGD7.25c rose 2.5% YoY, underpinned by resilient rental reversion, lower property expenses and a one-off adjustment. Portfolio occupancy inched up on strong leasing demand from high-tech and logistics tenants. Redemption of perpetual bonds led to higher gearing, while cost of debt declined further. We raise our FY26E DPU forecast and lift our DDM-based TP by 15% to SGD1.65. Maintain BUY.

Read More ...

Elite UK REIT

Lease overhang significantly reduced

New lease agreements secured for c.70% of total DWP income ahead of expectations, with remaining leases still in negotiations and management optimistic on renewals Overall impact is broadly favourable, as these leases provide a stable income base, though organic growth is deferred into medium term given flat rents and later rent reviews Improved income visibility enhances flexibility, supporting further value creation initiatives across portfolio Maintain BUY and TP of GBP 0.40

Read More ...