Stocks to Watch
Mapletree Industrial Trust – Earnings (+), TP (+)
Positive asset management actions boost earnings
- 2QFY24 DPU of 3.37 Scts (+1.5% y/y) ahead of our estimate
- Resilient operational performance while occupancies ticked higher and reversions strengthened to c.10.7%
- Key tenant AT&T’s expiry risk addressed as tenant commits to a 17-mth extension, a positive outcome
- BUY call maintained, TP raised to SGD2.75
Aztech Global – Recommendation (-), Earnings (-), TP (-)
- Cut rating to FULLY VALUED with lower TP of SGD0.63 on weaker outlook
- 3Q24 missed expectations due to weak demand from key customer
- Cut FY24F/FY25F earnings by 41%/61% as order momentum slows
- Strong net cash position; actively expanding new product initiatives and exploring M&A opportunities
HongkongLand
Igniting change with new strategies
- Unlocking value by winding down development properties, recycling selected investment properties
- Doubling EBIT and expand AUM from USD40bn to USB100bn by 2035 through portfolio expansion and introduction of third-party capital
- Enhancing shareholder return through dividend growth and potential share buyback
- Multiple catalysts in place; reiterate BUY with TP under review
Sheng Siong
Continue to outperform the market
- 3Q24 topline revenue at SGD363mn (+5% y/y) and earnings at SGD39mn (+12% y/y), in line with expectations
- 9M24 revenue and earnings at SGD1.1bn and SGD109mn form 75% of our FY24F estimates
- New store sales and comparable store sales drove 3.2% y/y and 1.5% y/y increase in overall sales respectively
- Gross margin reached record high of 31.3%, a 1.0 ppt increase y/y; Maintain BUY and TP of SGD1.80
Starhill Global REIT
<1Q FY24/25> Divesting strata office at peak rents
- 1Q FY24/25 revenue rose 1.9% y/y to SGD48.0m led by stronger rents from SG and Perth, alongside strengthening RM against SGD
- SG reversions stronger than expected at c.+15% for retail and + low-teen percentage for office; Tenant sales dipped c.8% y/y on anchor tenant transition (Coach -> Burberry) and demand softness for luxury goods
- Completes 7,653NLA divestment of strata office space at Wisma Atria at c.22% above valuation; Exit yields estimated at sub-3% with funds to go towards debt repayment
- Maintain BUY with TP of SGD0.68
CapitaLand China Trust
3Q24 business update first take
- 9M24 YTD net property income declined 5.1% y/y to RMB930mn, alongside a 3.4% y/y dip in gross revenue at RMB1.379bn
- Decline in revenue attributable to lower portfolio occupancy and rents from the new economy segment, while retail assets continue to be stable as per past quarters
- YTD reversions were marginally negative for retail (-0.6%) and business parks (-2.5%), while logistics continues to be the key laggard (-21.9%)
- We have a BUY call with TP SGD0.95
CapitaLand Ascott Trust
3Q24 business update first take
- 3Q gross profit saw the strongest increase at 8% y/y, uplifted by portfolio reconstitution and inorganic growth. Same store basis growth would have been lower at 2% y/y
- Portfolio RevPAU rose 3% y/y boosted by overseas markets and a 2 ppt increase in occupancy
- In Singapore, RevPAU rose 3% y/y on a same store basis due to higher contribution from Robertson House which was rebranded and relaunched last year. F1 rates was also reported to be higher y/y
- We have a BUY call with TP SGD1.15
Far East Hospitality Trust
3Q24 business update first look
- 3Q24 RevPAR increased 3% y/y to SGD154 from a high base, on higher room rates amid slight dip in average occupancy (85.5% vs. 2Q24: 86.7%)
- NPI for the quarter declined 7% y/y to due to loss of revenue from government contracts from a year ago, and higher property taxes
- Aggregate leverage remained at 30.8% with an interest coverage ratio of 2.9x, c.40% of debt are pegged to fixed rates
- We have a BUY call with TP SGD0.78
ESR-LOGOS REIT
3Q24 business update first look
- 9M24 YTD gross revenue and net property income declined by 6.3% and 6.5% y/y, respectively, on divestment of non-core assets. Same store basis growth would have been +1.9% and +1.2%
- Operational metrics stable over the quarter, with positive portfolio rental reversion of +11% y/y and stable occupancy at 91.3% (vs. 91.4% in 2Q24)
- Interest cost declined to 3.96% over the quarter (2Q24: 4.03%), with gearing at 36%
- We have a BUY call with TP SGD0.34
Legend
| (+) | (-) |
Earnings | Positive earnings revision | Negative earnings revision |
Recommendation | Upgrade | Downgrade |
TP | Increase | Decrease |
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