GREATER CHINA Sector Online Travel Agencies: Robust Qingming festival travel momentum continues into Labour Day. Results Dian Diagnostics (300244 CH/BUY/Rmb14.36/Target: Rmb18.50): 2023: Results in line; smooth progress in developing esoteric testing business. EVE Energy (300014 CH/SELL/Rmb35.00/Target: Rmb20.00): 4Q23: Earnings miss on margins. Maintain SELL. Cut target price from Rmb24.00 to Rmb20.00. Huizhou Desay SV Automotive Co (002920 CH/BUY/Rmb118.01/Target: Rmb145.00): 1Q24: Earnings mi...
Singapore provides resilient growth with CICT’s retail and office leases registering positive rental reversion of 7.2% and 14.1% respectively in 1Q24. Retention rate was high at 88.1% for retail and 84.2% for office. CICT has embarked on AEI works for IMM Building in Singapore. It has secured ECB as the new anchor tenant at Gallileo in Frankfurt, Germany for a period of 10 years. CICT provides a resilient 2024 distribution yield of 5.7%. Maintain BUY. Target price: S$2.34.
KEY HIGHLIGHTS Results CapitaLand Integrated Commercial Trust (CICT SP/BUY/S$1.88/Target: S$2.34) 1Q24: Secures ECB as new anchor tenant at Gallileo. Keppel DC REIT (KDCREIT SP/BUY/S$1.76/Target: S$2.13) 1Q24: Opportunistic divestment that strengthens balance sheet. Update Wilmar International (WIL SP/HOLD/S$3.37/Target: S$3.35) 1Q24 results preview: Expect core net profit of US$390m-420m (1Q23: US$382m). Better performance from consumer packs and plantation to be offset by weakness in m...
Interest rates have peaked but the pace of monetary easing is uneven. The ECB is likely to cut interest rates ahead of the FED. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from a continued recovery in visitor arrivals and resilient consumer spending: BUY CLAS (Target: S$1.45), FEHT (Target: S$0.82), FCT (Target: S$2.73) and LREIT (Target: S$0.93). BUY FLT (Target: S$1.52) and KDCREIT (Target: S$2.10) due to a high proportion of Euro-denominated borrowings.
nterest rates in OECD countries have already peaked. Based on the latest summary of economic projections, FOMC participants expect three rate cuts of 25bp in 2024 and the Fed Funds Rate to ease to 4.5% by end-24. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from continued recovery in visitor arrivals and resilient consumer spending. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82) and LREIT (Target: S$0.93).
For the 21 S-REITs under our coverage, five were above expectations with eight below expectations. The hospitality sub-sector registered the strongest NPI growth, averaging 13% yoy. We saw positive rental reversions across retail, office and logistics properties. Maintain OVERWEIGHT. Focus on blue chip S-REITs with resilient balance sheets. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82), FLT (Target: S$1.65) and LREIT (Target: S$0.93).
Inflationary pressure continues to ease, albeit at a more gradual pace. Rate cuts are on the horizon, although not as early as March. S¬-REITs have strong defensive qualities and benefit from lower interest rates. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from continued recovery in visitor arrivals and resilient domestic consumer spending. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82) and LREIT (Target: S$0.93).
GREATER CHINA Sector Hong Kong Property: CCL Index stabilises in Jan 24; channel checks on implementation of easing measures on non-PR buyers. INDONESIA Update Bumi Serpong Damai (BSDE IJ/BUY/Rp1,035/Target: Rp1,420): Growing elegantly with solid marketing sales. United Tractors (UNTR IJ/SELL/Rp22,800/Target: Rp20,000): Small downward adjustment to Pama’s fees could impact 2024 NPAT. MALAYSIA Results British American Tobacco (ROTH MK/BUY/RM9.08/Target: RM10.40): 4Q23: Results met expectation...
KEY HIGHLIGHTS Results CapitaLand Integrated Commercial Trust (CICT SP/BUY/S$1.98/Target: S$2.34): 2H23: Embarks on three AEIs; potential asset recycling in Singapore. Parkway Life REIT (PREIT SP/BUY/S$3.59/Target: S$5.07): 2H23: Steady growth with impending yield uplift in 2026. TRADERS’ CORNER Venture Corp (VMS SP): Trading BUY Singapore Exchange (SGX SP): Trading SELL
Singapore provided resilient growth with office and retail leases registering positive rental reversion of 8.5% and 9.0% respectively in 2023. Retention rate was high at 82.8% for retail and 86.5% for office. CICT will embark on AEIs for IMM Building in Singapore, Gallileo in Frankfurt and 101 Miller Street in Sydney. CICT provides 2024 distribution yield of 5.4%. Maintain BUY. Target price: S$2.34.
There are healthy signs that inflationary pressure has abated. Rate cuts are on the horizon but will not come as early as March. Maintain OVERWEIGHT. Our top picks are CDREIT (Target: S$1.48), CLAS (Target: S$1.45), KORE (Target: US$0.59), KREIT (Target: S$1.24), LREIT (Target: S$0.87) and MINT (Target: S$2.98).
Results from the 20 S-REITs under our coverage were mostly in line with forecasts. The hospitality sub-sector registered the strongest NPI growth averaging 26% yoy. We saw resiliency from Singapore with positive rental reversions across retail, office and industrial properties despite external uncertainties. We focus on S-REITs with resilient balance sheets that could weather a protracted period of elevated interest rates. Maintain OVERWEIGHT. BUY FCT, FEHT, KREIT, LREIT and MINT.
GREATER CHINA Sector Aviation: Airlines: 3Q23 results broadly in line; bottom line turned around in the seasonal peak quarter. Maintain UNDERWEIGHT. Results China Longyuan Power (916 HK/BUY/HK$6.79/Target: HK$7.90): 3Q23: In line; 3Q23 wind power utilisation hours down 34 hours yoy. Goldwind Science & Technology (2208 HK/HOLD/HK$3.76/Target: HK$4.00): 3Q23: Below expectations; 3Q23 WTG sales growth slows to +6.0% yoy. Great Wall Motor (2333 HK/BUY/HK$10.82/Target: HK$13.50): 3Q23: Earnings tripl...
Singapore provided resilient growth with office and retail leases registering positive rent reversions of 7.8% and 8.8% respectively in 3Q23. Retention rate was high at 82.9% for retail and 90.4% for office. CICT will stay defensive by optimising yield from its properties, including through asset enhancement initiatives. CICT provides 2024 distribution yield of 6.1%. Maintain BUY. Target price: S$2.02.
KEY HIGHLIGHTS Results CapitaLand Integrated Commercial Trust (CICT SP/BUY/S$1.74/Target: S$2.02): 3Q23: Resilient growth from both retail and office in Singapore. Mapletree Industrial Trust (MINT SP/BUY/S$2.13/Target: S$2.69): 2QFY24: Osaka data centre to start contributing in 3QFY24. Mapletree Logistics Trust (MLT SP/BUY/S$1.47/Target: S$1.72): 2QFY24: Weathering near-term headwinds from China. TRADERS’ CORNER Oversea-Chinese Banking Corp (OCBC SP): Trading SELL SATS (SATS SP): Trading SELL
S-REITs have to weather headwinds as interest rates are expected to stay higher for longer. We focus on blue-chip S-REITs with resilient balance sheets as they are better able to cope with higher interest rates. Maintain OVERWEIGHT. BUY a diversified portfolio of blue-chip S-REITs: CICT (Target: S$2.20), CLAR (Target: S$3.30), CLAS (Target: S$1.35), FLT (Target: S$1.56) and MINT (Target: S$2.89).
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