CapitaLand Integrated Commercial Trust (CICT) aims to raise around US$150m to partly fund the recently announced acquisition of two Australian assets. Although, at the time of the acquisition the company had stated that it aims to finance the acquisition using debt and divestment proceeds. In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
GREATER CHINA Update Minth Group (425 HK/BUY/HK$33.95/Target: HK$45.00): Management optimistic on 2021 revenue outlook, especially for China market. INDONESIA Update Kalbe Farma (KLBF IJ/BUY/Rp1,565/Target: Rp1,830): KLBF introduces a test and potential drugs to tackle COVID-19 cases. MALAYSIA Results Axis REIT (AXRB MK/HOLD/RM2.11/Target: RM2.05): 3Q20: Earnings growth attributed to newly-acquired assets. SINGAPORE Results CapitaLand Commercial Trust (CCT SP/HOLD/S$1.65/Target: S$1.63): 3Q2...
CCT benefitted from the full-quarter contribution at the newly-acquired MAC and the sequential rebound of 12.2% qoq at RCS. However, the asset enhancements at Six Battery Road and 21 Collyer Quay remain a drag. WeWork, the sole tenant at 21 Collyer Quay, is now financially more stable, but the pre-commitment at CapitaSpring remains low at 34.9%. Unitholders will be paid a cash consideration and allocated new CMT shares on 28 Oct 20. CCT is scheduled to be delisted from the SGX Main Board on 30 ...
KEY HIGHLIGHTS Sector Gaming: MBS reports its 3Q20 results; Some glimmer at the end of the tunnel. Results CapitaLand Commercial Trust (CCT SP/HOLD/S$1.65/Target: S$1.63): 3Q20: Goodbye CCT; welcome CICT. Update Singapore Airlines (SIA SP/BUY/S$3.51/Target: S$3.94): At an important inflection point; upgrade to BUY. TRADERS’ CORNER Hutchison Port Holdings Trust (HPHT SP): Trading Buy Wilmar International (WIL SP): Trading Sell
S-REITs corrected 3% across 16-30 Sep 20. S-REITs continued to announce yield-accretive acquisitions with MINT following in the footsteps of FCT and KREIT. The BOE confirmed that negative interest rates are under “active review” and could be deployed to support the British economy should the unwelcome scenario of a no-deal Brexit materialise. Key beneficiary: ELITE. Maintain OVERWEIGHT. BUY CT (Target: S$2.55), FCT (Target: S$3.10), FEHT (Target: S$0.72) and KREIT (Target: S$1.40).
S-REITs gained 0.8% during 1-15 Sep 20. S-REITs embarking on yield-accretive acquisitions, such as CERT, FCT, KREIT and MINT, led the gainers. The COVID-19 pandemic has helped these S-REITs acquire properties at lower prices and higher NPI yields. Lower interest rates have also reduced their cost of debt. Maintain OVERWEIGHT on S-REITs. BUY retail REITs CT (Target: S$2.55) and FCT (Target: S$3.10), hospitality REIT FEHT (Target: S$0.58) and office REIT KREIT (Target: S$1.40).
KEY HIGHLIGHTS Sector REITs: S-REITs Bi-weekly (1-15 Sep 20). AT A GLANCE Corporate Wilmar International (WIL SP/BUY/Target: S$5.35): YKA receives final registration approval for listing on the SZSE ChiNext board. TRADERS’ CORNER Far East Hospitality Trust (FEHT SP): Trading Buy ComfortDelGro Corp (CD SP): Trading Buy
CMT’s and CCT’s independent directors have recommended unitholders to vote in favour of the proposed merger to create CICT via a trust scheme of arrangement. Unitholder meetings are to be held on 29 Sep 20. Maintain BUY on CMT (Target: S$2.55) and HOLD on CCT (Target: S$1.66). The two S-REITs will morph into the second largest REIT in the Asia Pacific region.
KEY HIGHLIGHTS Sector REITs: Resuming the quest for scale and resiliency. Update Frasers Centrepoint Trust (FCT SP/BUY/S$2.64/Target: S$3.10): Transformative acquisition to expand from seven to 11 suburban retail malls. TRADERS’ CORNER Far East Hospitality Trust (FEHT SP): Trading Buy ComfortDelGro Corp (CD SP): Trading Buy
S-REITs gained marginally by 0.3% during 16-31 Aug 20. We saw many recovery plays, such as retail REITs (FCT, LREIT, MAGIC and CT) and hospitality REITs (FEHT and ARAUS), among the top gainers. Conversely, industrial REITs (FLT, MINT and AREIT) have lost some momentum. Maintain OVERWEIGHT on S-REITs. BUY retail REITs CT (Target: S$2.55) and FCT (Target: S$2.90), hospitality REIT FEHT (Target: S$0.58) and office REIT KREIT (Target: S$1.30).
GREATER CHINA Sector Automobile: Weekly: PV retail sales growth turned positive while wholesale shipment slowed. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance and Yongda. Healthcare: Smart generic drug R&D strategies benefit leading players in GPO tender. Results Sands China (1928 HK/BUY/HK$30.45/Target: HK$43.00): 2Q20: Limited help from latest border relaxation. INDONESIA Update XL Axiata (EXCL IJ/BUY/Rp2,820/Target: Rp3,270): Has experienced V-shaped recovery; expecting 16% and 10% ...
2Q20 DPU of 1.69 S cents was down 23.2% yoy but up 2.4% qoq. Distribution from 60% stake in RCS dropped 55% yoy due to rental waivers of S$4.4m, lower turnover rent from hotels, lower office occupancy and retention of taxable distributable income of S$2.1m. WeWork, sole tenant at 21 Collyer Quay, remains in dire need of a white knight. Committed occupancy at CapitaSpring remains low at 34.9%. Downgrade to HOLD. Target price: S$1.66. Entry price: S$1.50.
KEY HIGHLIGHTS Results Ascendas REIT (AREIT SP/BUY/S$3.43/Target: S$3.65): 1H20: Heaven from COVID-19 storm. CapitaLand Commercial Trust (CCT SP/HOLD/S$1.76/Target: S$1.66): 2Q20: More subdued outlook due to 21 Collyer Quay and CapitaSpring; downgrade to HOLD. TRADERS’ CORNER Mapletree Industrial Trust (MINT SP): Trading BUY Frasers Centrepoint Trust (FCT SP): Trading BUY
CAPITALAND COML.TST. (SG), a company active in Real Estate Investment Trusts, improves its general evaluation despite the loss of a fundamental star(s). The independent financial analyst theScreener has removed a fundamental star(s) from the title, which now shows 3 out of 4 stars; conversely, its market behaviour remains table and can be still described as moderately risky. The loss of a star(s) core is inconsequential since theScreener revises upgrades the general evaluation of the value to Sl...
INDONESIA Update Bumi Serpong Damai (BSDE IJ/BUY/Rp690/Target: Rp1,400): Undemanding valuation; trading at -3SD to 10-year mean discount to RNAV. MALAYSIA Sector Automobile: Mar 20: TIV dropped steeply by 59% yoy and 44% mom on MCO disruption. Downgrade to UNDERWEIGHT. Results Malaysia Marine and Heavy Engineering Holdings (MMHE MK/HOLD/RM0.405/Target: RM0.40): 1Q20: Deemed below expectations, as operational performance did not improve. Further challenges from yard suspension (due to lockdown) ...
1Q20 DPU declined 25% yoy to 1.65 S cents as CCT retained cash of S$18.5m (estimated). While office tenants are resilient, CCT is focused on conserving cash and prefers to fund AEI for Six Battery Road and 21 Collyer Quay internally without relying on additional bank borrowings. Portfolio occupancy deteriorated 2.8ppt qoq to 95.2% due to the expiry of Standard Chartered’s lease in Jan 20 and start of AEIs at Six Battery Road. Maintain BUY with a lower target price of S$1.68.
While demand for office space is affected by a slowdown in the broader economy, we expect office REITs to be more resilient relative to retail REITs and hospitality REITs. Upgrade to OVERWEIGHT. Maintain BUY for premier Grade-A office landlord CCT (Target: S$1.70). Upgrade KREIT to BUY (Target: S$1.30). KREIT’s share price has corrected 24.2% ytd and 2020F distribution yield has improved to 6.0%. Contribution from 311 Spencer Street at Melbourne will kick in starting 2Q20.
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