Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 146.859px; height: 12px;"> </td><td style="width: 143.312px; height: 12px;">AREIT</td><td style="width: 147.344px; height: 12px;">MINT</td><td style="width: 145.031px; height: 12px;">AAREIT</td><td style="width: 143.453px; height: 12px;">EREIT</td></tr><tr><td style="width: 146.859px; height: 13px;">Period</td><td style="width: 143.312px; height: 13px;">1H21</td><td style="width: 147.344px; height: 13px;">1Q22</td><td style="width: 145.031px; height: 13px;">1Q22</td><td style="width: 143.453px; height: 13px;">2Q21</td></tr><tr><td style="width: 146.859px; height: 13px;">Gross Revenue (S$ m)</td><td style="width: 143.312px; height: 13px;">586.0 (+12.4% YoY)</td><td style="width: 147.344px; height: 13px;">128.1 (+29.2% YoY)</td><td style="width: 145.031px; height: 13px;">31.8 (+16.8% YoY)</td><td style="width: 143.453px; height: 13px;">59.5 (+6.25% YoY)</td></tr><tr><td style="width: 146.859px; height: 12px;">NPI (S$ m)</td><td style="width: 143.312px; height: 12px;">445.6 (+14.8% YoY)</td><td style="width: 147.344px; height: 12px;">104.7 (+33.1% YoY)</td><td style="width: 145.031px; height: 12px;">23.1 (+23.9% YoY)</td><td style="width: 143.453px; height: 12px;">42.9 (+9.4% YoY)</td></tr><tr><td style="width: 146.859px; height: 12px;">DPU (S$ c)</td><td style="width: 143.312px; height: 12px;">7.66 (+5.4% YoY)</td><td style="width: 147.344px; height: 12px;">3.35 (+16.7% YoY)</td><td style="width: 145.031px; height: 12px;">2.25 (+12.5% YoY)</td><td style="width: 143.453px; height: 12px;">0.754 (13.9% YoY)</td></tr><tr><td style="width: 146.859px; height: 12px;">NAV per Unit (S$)</td><td style="width: 143.312px; height: 12px;">2.27</td><td style="width: 147.344px; height: 12px;">1.75</td><td style="width: 145.031px; height: 12px;">1.35</td><td style="width: 143.453px; height: 12px;">0.398</td></tr><tr><td style="width: 146.859px; height: 12px;">P/B (x)</td><td style="width: 143.312px; height: 12px;">1.37</td><td style="width: 147.344px; height: 12px;">1.65</td><td style="width: 145.031px; height: 12px;">1.15</td><td style="width: 143.453px; height: 12px;">1.1</td></tr><tr><td style="width: 146.859px; height: 12px;">Occupancy (%)</td><td style="width: 143.312px; height: 12px;">91.3</td><td style="width: 147.344px; height: 12px;">94.3 (Overall); 97.8 (North American); 93.4 (Singapore)</td><td style="width: 145.031px; height: 12px;">95.7</td><td style="width: 143.453px; height: 12px;">91.7</td></tr><tr><td style="width: 146.859px; height: 6px;">Reversion (%)</td><td style="width: 143.312px; height: 6px;">6.4</td><td style="width: 147.344px; height: 6px;">Not Disclosed</td><td style="width: 145.031px; height: 6px;">Not disclosed</td><td style="width: 143.453px; height: 6px;">-0.2</td></tr><tr><td style="width: 146.859px; height: 12px;">Gearing (%)</td><td style="width: 143.312px; height: 12px;">37.6</td><td style="width: 147.344px; height: 12px;">31</td><td style="width: 145.031px; height: 12px;">34.3</td><td style="width: 143.453px; height: 12px;">42.9</td></tr><tr><td style="width: 146.859px; height: 12px;">Cost of Debt (%)</td><td style="width: 143.312px; height: 12px;">2.4</td><td style="width: 147.344px; height: 12px;">2.7</td><td style="width: 145.031px; height: 12px;">2.8</td><td style="width: 143.453px; height: 12px;">3.24</td></tr><tr><td style="width: 146.859px; height: 12px;">1 Yr Fwd Yield (%)</td><td style="width: 143.312px; height: 12px;">5.06</td><td style="width: 147.344px; height: 12px;">4.69</td><td style="width: 145.031px; height: 12px;">6.1</td><td style="width: 143.453px; height: 12px;">7.05</td></tr><tr><td style="width: 146.859px; height: 12px;">Debt Hedged (%)</td><td style="width: 143.312px; height: 12px;">75.2</td><td style="width: 147.344px; height: 12px;">95.8</td><td style="width: 145.031px; height: 12px;">77.2</td><td style="width: 143.453px; height: 12px;">75</td></tr><tr><td style="width: 146.859px; height: 12px;">Target Price</td><td style="width: 143.312px; height: 12px;">Under Review</td><td style="width: 147.344px; height: 12px;">N/A</td><td style="width: 145.031px; height: 12px;">Under Review</td><td style="width: 143.453px; height: 12px;">N/A</td></tr><tr><td style="width: 146.859px; height: 13px;">Rating</td><td style="width: 143.312px; height: 13px;">Under Review</td><td style="width: 147.344px; height: 13px;">N/A</td><td style="width: 145.031px; height: 13px;">Under Review</td><td style="width: 143.453px; height: 13px;">Under Review</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) AREITMINTAAREITEREITPeriod1H211Q221Q222Q21Gross Revenue (S$ m)586.0 (+12.4% YoY)128.1 (+29.2% YoY)31.8 (+16.8% YoY)59.5 (+6.25% YoY)NPI (S$ m)445.6 (+14.8% YoY)104.7 (+33.1% YoY)23.1 (+23.9% YoY)42.9 (+9.4% YoY)DPU (S$ c)7.66 (+5.4% YoY)3.35 (+16.7% YoY)2.25 (+12.5% YoY)0.754 (13.9% YoY)NAV per Unit (S$)2.271.751.350.398P/B (x)1.371.651.151.1Occupancy (%)91.394.3 (Overall); 97.8 (North American); 93.4 (Singapore)95.791.7Reversion (%)6.4Not DisclosedNot disclosed-0.2Gearing (%)37.63134.342.9Cost of Debt (%)2.42.72.83.241 Yr Fwd Yield (%)5.064.696.17.05Debt Hedged (%)75.295.877.275Target PriceUnder ReviewN/AUnder ReviewN/ARatingUnder ReviewN/AUnder ReviewUnder Review

ASEAN Builder's Scoop (03Aug21) - AREIT Boosted by DPU-Accretive Acq

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ireit-global" target="_blank" data-smartkarma-citation="entities:10596" rel="noopener">IREIT Global (IREIT SP)</a> to raise S$126.7m from proposed equity fund raising      </h3><ul><li>IREIT is proposing an equity fund raising comprising an offering of new units to raise gross proceeds of ~S$126.7m. The proposed EFR will be comprised of a non-underwritten placement of 11,372,868 new units to Bond Capital Partners at an issue price of S$0.6155/new unit, which is expected to raise gross proceeds of ~S$7m. In addition, an underwritten pro rata and non-renounceable preferential offering of 201,137,870 new Units on the basis of 214 new units for every 1,000 existing units to be held on 29Jun21 to eligible unitholders at an issue price of S$0.595/new unit to raise gross proceeds of ~S$119.7m. IREIT intends to use part of the net proceeds to partially finance the total acquisition cost of ~S$195.7m (~EUR122.3m) in connection with the proposed acquisition of a portfolio of 27 retail properties located in France</li><li>The aggregate percentage unitholding of City Strategic Equity (CSEPL) and its concert parties is expected to decrease from 50.8% to 50.2% after the Placement. Assuming that CSEPL is allocated in full its application for the Excess Preferential Offering Units, CSEPL would hold 25.8% (comprising 297,207,061 Units) and, assuming that each of CSEPL’s concert parties only takes up their respective provisional allotments, CSEPL and its concert parties would hold 55.3%</li><li>As the unitholding of CSEPL and its concert parties does not fall below 50% after the Placement and CSEPL would not individually hold 30% or more of the Units even if CSEPL is allocated in full its application for the Excess Preferential Offering Units, accordingly, the requirement to make a mandatory general offer pursuant to Rule 14 of the Singapore Code of Take-overs and Mergers will not be triggered. For the avoidance of doubt, Tikehau Capital, CSEPL, AT Investments and IGGPL, among others, will rank last in the allocation of Excess Preferential Offering Units applications.</li></ul>

SingaporeIREIT Global (IREIT SP) to raise S$126.7m from proposed equity fund raising      IREIT is proposing an equity fund raising comprising an offering of new units to raise gross proceeds of ~S$126.7m. The proposed EFR will be comprised of a non-underwritten placement of 11,372,868 new units to Bond Capital Partners at an issue price of S$0.6155/new unit, which is expected to raise gross proceeds of ~S$7m. In addition, an underwritten pro rata and non-renounceable preferential offering of 201,137,870 new Units on the basis of 214 new units for every 1,000 existing units to be held on 29Jun21 to eligible unitholders at an issue price of S$0.595/new unit to raise gross proceeds of ~S$119.7m. IREIT intends to use part of the net proceeds to partially finance the total acquisition cost of ~S$195.7m (~EUR122.3m) in connection with the proposed acquisition of a portfolio of 27 retail properties located in FranceThe aggregate percentage unitholding of City Strategic Equity (CSEPL) and its concert parties is expected to decrease from 50.8% to 50.2% after the Placement. Assuming that CSEPL is allocated in full its application for the Excess Preferential Offering Units, CSEPL would hold 25.8% (comprising 297,207,061 Units) and, assuming that each of CSEPL’s concert parties only takes up their respective provisional allotments, CSEPL and its concert parties would hold 55.3%As the unitholding of CSEPL and its concert parties does not fall below 50% after the Placement and CSEPL would not individually hold 30% or more of the Units even if CSEPL is allocated in full its application for the Excess Preferential Offering Units, accordingly, the requirement to make a mandatory general offer pursuant to Rule 14 of the Singapore Code of Take-overs and Mergers will not be triggered. For the avoidance of doubt, Tikehau Capital, CSEPL, AT Investments and IGGPL, among others, will rank last in the allocation of Excess Preferential Offering Units applications.

ASEAN Builder's Scoop (23Jun21) - IREIT Proposes ~S$127m EFR

Singapore

Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. The Company's businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces.

Jardine Matheson Holdings Limited is a multinational enterprise with a portfolio of businesses focused on the Asia-Pacific region. The Group's activities include financial services, supermarkets, consumer marketing, engineering and construction, automobile trading, insurance broking, property investment, and hotels.

Gallant Venture Ltd is an investment holding company. The Company owns and operates industrial parks, supplies telecommunications services, electricity and water and wastewater management services, operates resorts and hotels, and develops real estate.

Bonvests Holdings Limited is an investment holding company whose subsidiaries develop real estate and operate waste collection and disposal, and contract cleaning.  The Company also develops and operates hotels locally and overseas, as well as operates food and beverage restaurants.  Bonvests Holdings trades securities and rents properties.

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

ST Engineering is a global technology, defence and engineering group with offices across Asia, Europe, the Middle East and the U.S., serving customers in more than 100 countries. The Group uses technology and innovation to solve real-world problems and improve lives through its diverse portfolio of businesses across the aerospace, smart city, defence and public security segments. Headquartered in Singapore, ST Engineering reported revenue of $7.9b in FY2019 and it ranks among the largest companies listed on the Singapore Exchange. It is a component stock of the FTSE Straits Times Index, MSCI Singapore, iEdge SG ESG Transparency Index and iEdge SG ESG Leaders Index.

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

Frencken Group Limited designs, develops, and produces complex and advanced modules and systems, based on precision mechanics, hardware and software.

Chip Eng Seng Corporation Limited specializes in building construction activities in the private and public sector.  The Company also owns, develops, and invests in properties.

BRC Asia Limited designs, manufactures, and markets steel mesh under the BRC brand name.  The Company's products include non-standard and customized mesh, a wide range of prefabricated products including beam and column cages, complete prefabricated beam and column reinforcement, staggered mesh, twin wire mesh, and pile cap cages.

LG Corp. is a holding company, which operates subsidiaries including LG Electronics, LG Household & Health Care, LG Chem Ltd., and Dacom Corp. The Company's main business areas are electronics, chemicals, and household products manufacturing and telecommunications services.

DCC PLC is a sales, marketing, distribution and business support services Group. The Group operates in the following sectors; energy, IT & entertainment products, healthcare, environmental services and food & beverage. DCC's strategy is to grow a sustainable, diversified business.

Smiths Group plc is a global technology company.  The company delivers products and services for the threat & contraband detection, medical devices, energy and communications market worldwide.

Enka Insaat ve Sanayi AS provides construction and construction related services worldwide. The Company builds infrastructure, commercial projects and factories. The manufacturing subsidiaries produce construction materials, steel pipes, windows and hand tools. The Group also imports and distributes industrial machinery in Turkey.

Jardine Matheson Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on motor vehicles, property investment and development, food retailing, health and beauty, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining, energy, and agribusiness.

Icahn Enterprises L.P., a master limited partnership, is a diversified holding company engaged in nine primary business segments: Automotive, Investment, Energy, Gaming, Railcar, Food Packaging, Metals, Real Estate and Home Fashion.

Seibu Holdings Inc. offers diversified operation. The Company through its subsidiary companies operates transportation, construction, hotel, leisure facilities, and real estate business. Seibu Holdings provides group enterprises strategy planning, operation management, asset management and supply, and business promotions.

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Beijing Enterprises Holdings Ltd. is a diversified company.  The Company brews beer; distributes natural gas through pipelines; invests in, designs, constructs and operates water supply and wastewater treatment plants; operates toll roads; disposes of hazardous waste; and offers electronic payment systems.

NWS Holdings Limited operates businesses under three main divisions: Service, Infrastructure, and Ports. Its Service division comprises facilities, contracting, transport, financial, and environmental. The Infrastructure portfolio includes roads and bridges, energy, and water treatment and waste management. Its port division includes container handling, logistics, and warehousing.

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

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Keppel Corp (KEP SP)

ASEAN Builder's Scoop (03Aug21) - AREIT Boosted by DPU-Accretive Acq

AREIT boosted by DPU-accretive acq; KEP-SPH better yield for SPH holders; SMPH 1H21 supported by resi biz; DD launches buyback program; LPKR strong...

SCCM Asia Research

ASEAN Builder's Scoop (23Jun21) - IREIT Proposes ~S$127m EFR

IREIT proposes ~S$127m EFR; IWG adds 20 Cecil to its portfolio; Alibaba Cloud builds 1st DC in Manila; Thai REIT laggards vs peers; Indo extends...

SCCM Asia Research

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