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><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889" rel="noopener">Cromwell European REIT (CERT SP)</a> divests a non-core asset in France at 21% premium to latest valuation</h3><ul><li>CERT has entered into a promissory deed with an affiliate of one of Europe’s leading boutique real estate investment funds, to divest the Parc de Popey asset located at 5 Chemin de Popey in Bar-le-Duc, France. The French Asset consists of a single large warehouse building with ancillary office accommodation totalling 15,724sqm, built in 1995. Currently occupied by a major postal service and logistics company, which is largely owned by the French government, the asset is used as an industrial sorting parcel platform</li><li>CERT will sell the French Asset for a sale consideration of EUR5.8m (~S$9.3m), which would be satisfied fully in cash. It is 53% higher than the IPO purchase price and 21% higher than its most recent valuation. A divestment fee of EUR29,000 (being 0.5% of the sale consideration) is payable to the Manager. The divestment is expected to be completed in 3Q21 and has no material effect on CERT’s NTA.</li></ul>

SingaporeCromwell European REIT (CERT SP) divests a non-core asset in France at 21% premium to latest valuationCERT has entered into a promissory deed with an affiliate of one of Europe’s leading boutique real estate investment funds, to divest the Parc de Popey asset located at 5 Chemin de Popey in Bar-le-Duc, France. The French Asset consists of a single large warehouse building with ancillary office accommodation totalling 15,724sqm, built in 1995. Currently occupied by a major postal service and logistics company, which is largely owned by the French government, the asset is used as an industrial sorting parcel platformCERT will sell the French Asset for a sale consideration of EUR5.8m (~S$9.3m), which would be satisfied fully in cash. It is 53% higher than the IPO purchase price and 21% higher than its most recent valuation. A divestment fee of EUR29,000 (being 0.5% of the sale consideration) is payable to the Manager. The divestment is expected to be completed in 3Q21 and has no material effect on CERT’s NTA.

ASEAN Builder's Scoop (22Jun21) - CERT Divests a Non-Core France Asset

<h2>Singapore</h2><h3>The Ascott Limited to acquire two properties in France and Vietnam for S$210m through its private fund</h3><ul><li>The Ascott Limited (Ascott) has entered into two agreements to acquire two properties in Paris, France and Hanoi, Vietnam for about S$210m. The acquisition of the two properties through the Ascott Serviced Residence Global Fund (ASRGF), Ascott’s private equity fund with Qatar Investment Authority, will boost Ascott’s total fund assets under management (FUM) to about S$8bn. Both properties will be acquired on a turnkey basis and are expected to open in 2024</li><li>The acquisition in Paris is a freehold asset which will be refurbished to introduce Ascott’s first Co-living property in Europe under the lyf brand. Named livelyfhere Gambetta Paris, the 139-unit Co-living property is located in a vibrant district in the 20th arrondissement, near galleries, cinemas, trendy cafés and restaurants, street art and music venues. With this addition, Ascott has a total of 16 lyf properties with more than 3,100 units across 13 cities and nine countries in Asia Pacific and Europe. The acquisition of livelyfhere Gambetta Paris, Ascott’s first lyf property in Europe, follows the recent opening of Ascott’s first lyf property in Japan, lyf Tenjin Fukuoka. Five more lyf properties in Singapore and China are set to open in 2021. With this addition, Ascott will have over 3,500 units in 34 properties across 13 cities in France</li><li>The acquisition in Hanoi is the 364-unit Somerset Metropolitan West Hanoi. It is located in Hanoi’s new CBD, close to several government agencies as well as local and international corporations. Somerset Metropolitan West Hanoi is a 10-minute drive to the Vietnam National Convention Centre, the largest convention centre in Vietnam and the Noi Bai International Airport is a 30-minute drive away. Somerset Metropolitan West Hanoi will increase Ascott’s portfolio to over 7,600 units across 31 properties in 10 cities for Vietnam</li><li>With the acquisition of livelyfhere Gambetta Paris and Somerset Metropolitan West Hanoi, there will be eight properties with close to 1,700 units held under the ASRGF. The fund has five operational properties, Ascott Sudirman Jakarta, Citadines Islington London, La Clef ChampsÉlysées Paris, lyf Funan Singapore, and Quest NewQuay Docklands Melbourne. Citadines Walker North Sydney is slated to open in 2022. </li></ul>

SingaporeThe Ascott Limited to acquire two properties in France and Vietnam for S$210m through its private fundThe Ascott Limited (Ascott) has entered into two agreements to acquire two properties in Paris, France and Hanoi, Vietnam for about S$210m. The acquisition of the two properties through the Ascott Serviced Residence Global Fund (ASRGF), Ascott’s private equity fund with Qatar Investment Authority, will boost Ascott’s total fund assets under management (FUM) to about S$8bn. Both properties will be acquired on a turnkey basis and are expected to open in 2024The acquisition in Paris is a freehold asset which will be refurbished to introduce Ascott’s first Co-living property in Europe under the lyf brand. Named livelyfhere Gambetta Paris, the 139-unit Co-living property is located in a vibrant district in the 20th arrondissement, near galleries, cinemas, trendy cafés and restaurants, street art and music venues. With this addition, Ascott has a total of 16 lyf properties with more than 3,100 units across 13 cities and nine countries in Asia Pacific and Europe. The acquisition of livelyfhere Gambetta Paris, Ascott’s first lyf property in Europe, follows the recent opening of Ascott’s first lyf property in Japan, lyf Tenjin Fukuoka. Five more lyf properties in Singapore and China are set to open in 2021. With this addition, Ascott will have over 3,500 units in 34 properties across 13 cities in FranceThe acquisition in Hanoi is the 364-unit Somerset Metropolitan West Hanoi. It is located in Hanoi’s new CBD, close to several government agencies as well as local and international corporations. Somerset Metropolitan West Hanoi is a 10-minute drive to the Vietnam National Convention Centre, the largest convention centre in Vietnam and the Noi Bai International Airport is a 30-minute drive away. Somerset Metropolitan West Hanoi will increase Ascott’s portfolio to over 7,600 units across 31 properties in 10 cities for VietnamWith the acquisition of livelyfhere Gambetta Paris and Somerset Metropolitan West Hanoi, there will be eight properties with close to 1,700 units held under the ASRGF. The fund has five operational properties, Ascott Sudirman Jakarta, Citadines Islington London, La Clef ChampsÉlysées Paris, lyf Funan Singapore, and Quest NewQuay Docklands Melbourne. Citadines Walker North Sydney is slated to open in 2022. 

ASEAN Builder's Scoop (21Jun21) - Ascott Acquires Paris and Hanoi Props

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

Asset World Corporation / Equity Bottom-Up

<p><strong>We anticipate EBITDA breakeven period for hospitality business to be postponed until mid 2Q22 while expecting AWC’s earnings recovery at a faster pace than other hospitality related stock in Thailand given its high degree of diversification of asset portfolio and the management’s competency to effectively implement cost saving program.</strong></p><div>• Report 1Q21 net loss at Bt594m (Bt492m loss in 4Q20, Bt265m profit in 1Q20)</div><div>•Expect the company to incur another net loss in 2Q21 with a higher extent than 1Q21 due to impact from lockdown period in April and May, which trim down occupancy for hospitality business down to below 10%.</div><div></div><div>• Trim down net loss forecast in 2021E further to Bt1.6bn</div><div></div><div><strong>We maintain HOLD rating for AWC with a new target price after EPS downward revision at Bt4.30 (Previous TP: Bt4.60), derived from DCF, which implies 72xPE’24E. HOLD rating reflect postponement in hotel revenue recovery. However, faster-than-expected vaccine handout and recovery flow of tourist inbound remain an upside risk for 22-23E earnings upward revision.</strong></div>

We anticipate EBITDA breakeven period for hospitality business to be postponed until mid 2Q22 while expecting AWC’s earnings recovery at a faster pace than other hospitality related stock in Thailand given its high degree of diversification of asset portfolio and the management’s competency to effectively implement cost saving program.• Report 1Q21 net loss at Bt594m (Bt492m loss in 4Q20, Bt265m profit in 1Q20)•Expect the company to incur another net loss in 2Q21 with a higher extent than 1Q21 due to impact from lockdown period in April and May, which trim down occupancy for hospitality business down to below 10%.• Trim down net loss forecast in 2021E further to Bt1.6bnWe maintain HOLD rating for AWC with a new target price after EPS downward revision at Bt4.30 (Previous TP: Bt4.60), derived from DCF, which implies 72xPE’24E. HOLD rating reflect postponement in hotel revenue recovery. However, faster-than-expected vaccine handout and recovery flow of tourist inbound remain an upside risk for 22-23E earnings upward revision.

AWC: Slower-Than-Expected Recovery in Hospitality Revenue

<p><strong>We are positive toward AWC’s speedy earnings recovery after lockdown relative to other hospitality related stock in Thailand given its high degree of resilient of the company’s asset attribute and the management’s ability to effectively deploy cost control program.</strong></p><div>• Sluggish recovery in hospitality business performance</div><div></div><div>• Trim down earnings forecast in 2022-23E by 41-61%</div><div></div><div>• Expect the company to incur another net loss in 1Q21 but at a slight higher extent than 4Q20 due to the lockdown period in January, which trim down occupancy for hospitality business down to below 20%. However, such a shortfall will be partially offset by gradual increase in occupancy rate for most of the retail and commercial.</div><p></p><p><strong>We downgrade AWC with a HOLD rating while roll over target price to Bt4.60 (Previous TP: Bt4.50), derived from DCF methodology or implies 70xPE’23E. Recent rally in stock price has priced in near-mid-terms positive factors. However, faster-than-expected vaccine handout and recovery in foreign tourist inbound remain an upside risk for 21-22E earnings upward revision.</strong></p>

We are positive toward AWC’s speedy earnings recovery after lockdown relative to other hospitality related stock in Thailand given its high degree of resilient of the company’s asset attribute and the management’s ability to effectively deploy cost control program.• Sluggish recovery in hospitality business performance• Trim down earnings forecast in 2022-23E by 41-61%• Expect the company to incur another net loss in 1Q21 but at a slight higher extent than 4Q20 due to the lockdown period in January, which trim down occupancy for hospitality business down to below 20%. However, such a shortfall will be partially offset by gradual increase in occupancy rate for most of the retail and commercial.We downgrade AWC with a HOLD rating while roll over target price to Bt4.60 (Previous TP: Bt4.50), derived from DCF methodology or implies 70xPE’23E. Recent rally in stock price has priced in near-mid-terms positive factors. However, faster-than-expected vaccine handout and recovery in foreign tourist inbound remain an upside risk for 21-22E earnings upward revision.

AWC: Anticipate Slow Recovery in Hospitality Business

<p><strong>We are positive toward AWC’s earnings recovery outlook given the company’s ability to adopted cost control program effectively and benefit from earnings buffer from commercial business during the pandemic. The company’s EBITDA margin recovered to positive territory at 7.4% in 3Q20 from its trough level at -31% in the previous quarter. However, we anticipate it may take 5-6 quarters for the group to reach back its pre-COVID19 EBITDA level after the company reopened all their hospitality and retail assets in 4Q20. Faster-than-expected vaccine delivery will also create upside to AWC’s earnings in 2021-22E.</strong></p>
<div>• Anticipate gradual recovery in hospitality business</div>
<div>• AWC report net loss of Bt620m in 3Q20. A moderate recovery from all time low level in 2Q20 which driven mainly by hospitality revenue (+239%QoQ) to Bt461m and retail revenue (+21%QoQ) to Bt820m. </div>
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<p><strong>We reduce target price to Bt4.50 (Previous TP: Bt4.70) after earnings downward revision in 2020-21E. Our target price derived from DCF methodology while implies 105xPE’22E.</strong></p>

We are positive toward AWC’s earnings recovery outlook given the company’s ability to adopted cost control program effectively and benefit from earnings buffer from commercial business during the pandemic. The company’s EBITDA margin recovered to positive territory at 7.4% in 3Q20 from its trough level at -31% in the previous quarter. However, we anticipate it may take 5-6 quarters for the group to reach back its pre-COVID19 EBITDA level after the company reopened all their hospitality and retail assets in 4Q20. Faster-than-expected vaccine delivery will also create upside to AWC’s earnings in 2021-22E.
• Anticipate gradual recovery in hospitality business
• AWC report net loss of Bt620m in 3Q20. A moderate recovery from all time low level in 2Q20 which driven mainly by hospitality revenue (+239%QoQ) to Bt461m and retail revenue (+21%QoQ) to Bt820m. 

 

We reduce target price to Bt4.50 (Previous TP: Bt4.70) after earnings downward revision in 2020-21E. Our target price derived from DCF methodology while implies 105xPE’22E.

AWC: Group EBITDA Already Turned Positive in 3Q20

Thailand

Asset World Corp Public Company Limited focuses on real estate development and investment services. The Company offers property management. Asset World Corp serves customers in Thailand.

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Asset World Corporation (AWC TB)

ASEAN Builder's Scoop (22Jun21) - CERT Divests a Non-Core France Asset

CERT divests a non-core France asset; CBD Grade-A office rents reversing up in 2Q21; China REITs solid IPO debut; MEG sees resi sales uptick; HVN...

SCCM Asia Research

ASEAN Builder's Scoop (21Jun21) - Ascott Acquires Paris and Hanoi Props

Ascott acquires Paris and Hanoi props; CREITs vs SREITs competition; LOGOS/PURE partners for Jakarta DC; DILD 5M21 mrkt sales tripled YoY; VLL eyes...

SCCM Asia Research

AWC: Slower-Than-Expected Recovery in Hospitality Revenue

We anticipate EBITDA breakeven period for hospitality business to be postponed until mid 2Q22 while expecting AWC’s earnings recovery at a faster...

Pi Securities PCL, Thailand

AWC: Anticipate Slow Recovery in Hospitality Business

We are positive toward AWC’s speedy earnings recovery after lockdown relative to other hospitality related stock in Thailand given its high degree...

Pi Securities PCL, Thailand

AWC: Group EBITDA Already Turned Positive in 3Q20

•AWC report net loss of Bt620m in 3Q20. A moderate recovery from all time low level in 2Q20 which driven mainly by hospitality revenue (+239%QoQ)...

Pi Securities PCL, Thailand

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