KEY HIGHLIGHTS Results CDL Hospitality Trusts (CDREIT SP/BUY/S$0.975/Target: S$1.48): 1Q24: Positive growth with upward momentum. Mapletree Logistics Trust (MLT SP/BUY/S$1.35/Target: S$1.89): 4QFY24: Downside limited by higher yield. TRADERS’ CORNER Singapore Post (SPOST SP): Trading BUY Frasers Centrepoint Trust (FCT SP): Trading BUY
MLT eked out positive rental reversions of 2.9% in 4QFY24 driven by Singapore (+11.1%), despite the drag from China (-10.0%). Portfolio occupancy was stable at 96.0% as of Mar 24. MLT’s properties in Tier 1 cities, such as Shanghai and Guangzhou, are well located and resilient. Properties in Tier 2 cities suffered negative rental reversion at low teens and the weakness is expected to persist. MLT provides FY25 distribution yield of 6.2% (FLT: 6.7%). Maintain BUY. Target price: S$1.89.
GREATER CHINA Sector Macau Gaming Apr 24 GGR down 5% mom; downgrade to MARKET WEIGHT. Results China Construction Bank (939 HK/BUY/HK$5.10/Target: HK$6.00) 1Q24: Results in line with better NIM performance. LONGi Green Energy Technology (601012 CH/SELL/Rmb18.20/Target: Rmb14.38) 2023/1Q24: Below expectations; inventory write-down wipes out earnings. Downgrade to SELL. PICC Property and Casualty (2328 HK/BUY/HK$9.71/Target: HK$11.70) 1Q24: Earnings miss on higher COR and lower investment income...
KEY HIGHLIGHTS Strategy The Impact Of Escalating Middle East Tensions A fluid situation with oil prices the key worry. Small/Mid Cap Highlights BRC Asia (BRC SP/BUY/S$1.94/Target: S$2.42) 1QFY24: Strong results as construction demand recovers. TRADERS’ CORNER Aztech Global (AZTECH SP): Trading BUY Isdn Holdings (ISDN SP): Trading BUY
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).
GREATER CHINA Sector Automobile: Weekly: PEV market share hits record of 48% on price slashes. Maintain UNDERWEIGHT. Top SELL: XPeng. Top BUYs: CATL, Tuopu and Desay SV. Results AIA Group (1299 HK/BUY/ HK$62.25/Target: HK$101.00): 2023: Delivering strong VONB growth. KE Holdings Inc (2423 HK/HOLD/HK$37.95/Target: HK$39.00): 4Q23: Strong top-line beat; expecting lukewarm recovery in 1Q24. Downgrade to HOLD. INDONESIA ASEAN Gems Conference Highlights Ace Hardware Indonesia (ACES IJ/BUY/Rp840/Targ...
In China, growth from e-commerce has slowed. The huge logistics supply of 12m sqm in 2023 has pushed the nationwide vacancy rate to a high of 23%. We are concerned that the weakness from China could persist and last longer than the 6-12 months guided by management. We have toned down our optimism. MLT provides FY25 distribution yield of 5.6% (FLT: 7.0%). Maintain BUY. Target price: S$1.87.
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).
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).
GREATER CHINA Sector Automobile: Weekly: EV sales rebounded in the third week of 2024 on price cuts, implying lower margins. Top SELLs: BYD, XPeng and Li Auto. Update JD.com (9618 HK/BUY/HK$90.40/Target: HK$135.00): Resilient user growth and normalised revenue growth fostering solid recovery in 2024. INDONESIA Sector Mining Expecting nickel prices to bottom out in 2024 with potential recovery in 2025. MALAYSIA Results Pavilion REIT (PREIT MK/BUY/RM1.24/Target: RM1.47): 4Q23: Results in line...
3QFY24 results was a mixed bag. MLT generated healthy rental reversions of 3.8% driven by Singapore, Australia and South Korea, despite the drag from China. Portfolio occupancy slipped 1.0ppt qoq to 95.9% due to non-¬renewals at older specifications properties in Singapore and Hong Kong. Management cautioned that weakness for China could persist for the next 6-12 months. MLT provides FY25 distribution yield of 5.3% (FLT: 6.5%). Maintain BUY. Target price: S$1.98.
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...
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