Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Thematic (Sector/Industry)

<p>Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential property developers, quoting a 40% discount to book and rapidly improving fundamentals. Here is a short report on the sector to figure out whether his bullishness is warranted or not.</p>
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<p>Supply &amp; demand for residential property is not necessarily out of sync. The 2009-2013 period was a bubble and should not be seen as a baseline.</p>
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<p>The retail, office and hospitality segments have suffered over the past two years due to cross-border travel restrictions, working from home during the pandemic and the threat from e-commerce. But several of these factors are one-off in nature.</p>
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<p>I see value in City Developments, given high-quality assets, excellent execution and an upside of almost +60% using reasonable assumptions.</p>
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<p>I’m also bullish on small-cap Bukit Sembawang, which sit on a valuable land bank and has won awards as one of the best property developers in Singapore.</p>
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Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential property developers, quoting a 40% discount to book and rapidly improving fundamentals. Here is a short report on the sector to figure out whether his bullishness is warranted or not.


Supply &amp; demand for residential property is not necessarily out of sync. The 2009-2013 period was a bubble and should not be seen as a baseline.


The retail, office and hospitality segments have suffered over the past two years due to cross-border travel restrictions, working from home during the pandemic and the threat from e-commerce. But several of these factors are one-off in nature.


I see value in City Developments, given high-quality assets, excellent execution and an upside of almost +60% using reasonable assumptions.


I’m also bullish on small-cap Bukit Sembawang, which sit on a valuable land bank and has won awards as one of the best property developers in Singapore.



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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

<h2>Singapore</h2><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/199/original/image_71648546021635124700450.png?1635124703" class="editor-image img-responsive" data-smartkarma-image-id="237199"></figure><h3><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> 3Q21 Business Updates – Hopeful for a stronger 4Q21</h3><ul><li>3Q21 revenue and NPI increased by 118.9% and 132.2% YoY to S$329m and S$242.6m, respectively, bringing 9M21 gross revenue and NPI to S$974.7m (+108% YoY) and S$714.8m (+122.8% YoY), respectively. CICT’s enlarged portfolio as well as 100% contribution from Raffles City Singapore (RCS) helped to boost 9M21 performance. In 3Q21, CICT granted less than S$2m of rental waivers. 3Q21 DPU was undisclosed</li><li>Overall portfolio occupancy dipped slightly to 94.4% in 3Q21 (vs. 94.9% in 2Q21 and 95.9% in 1Q21). Portfolio WALE (by GRI) stood at 3 years</li><li>Retail: 9M21 shopper traffic inched up 0.9% YoY, while tenants’ sales improved by 1% YoY (retention rate of 82.4%), shaving off from 1H21’s 4.2%/5.3% YoY improvement. Retail occupancy dipped to 96.4% (vs. 97% in 2Q21 and 97.1% in 1Q21). Clarke Quay and Bugis+ were the largest dampeners on the portfolio with occupancies falling 3.5ppts/2.8ppts from 2Q21, respectively, while rental reversions (incoming avg. rents vs outgoing avg. rents) continued to decline, albeit at a slower pace of -3.8% (vs. 1H21: -4.5%). Retail WALE (by GRI) held at 1.9 years</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Capitaland Integrated Commercial Trust (CICT SP) 3Q21 Business Updates – Hopeful for a stronger 4Q213Q21 revenue and NPI increased by 118.9% and 132.2% YoY to S$329m and S$242.6m, respectively, bringing 9M21 gross revenue and NPI to S$974.7m (+108% YoY) and S$714.8m (+122.8% YoY), respectively. CICT’s enlarged portfolio as well as 100% contribution from Raffles City Singapore (RCS) helped to boost 9M21 performance. In 3Q21, CICT granted less than S$2m of rental waivers. 3Q21 DPU was undisclosedOverall portfolio occupancy dipped slightly to 94.4% in 3Q21 (vs. 94.9% in 2Q21 and 95.9% in 1Q21). Portfolio WALE (by GRI) stood at 3 yearsRetail: 9M21 shopper traffic inched up 0.9% YoY, while tenants’ sales improved by 1% YoY (retention rate of 82.4%), shaving off from 1H21’s 4.2%/5.3% YoY improvement. Retail occupancy dipped to 96.4% (vs. 97% in 2Q21 and 97.1% in 1Q21). Clarke Quay and Bugis+ were the largest dampeners on the portfolio with occupancies falling 3.5ppts/2.8ppts from 2Q21, respectively, while rental reversions (incoming avg. rents vs outgoing avg. rents) continued to decline, albeit at a slower pace of -3.8% (vs. 1H21: -4.5%). Retail WALE (by GRI) held at 1.9 years

Singapore

CapitaLand Investment Limited (CLI) is a global real estate investment manager with the aim to scale its FUM and fee-related earnings through its full stack of investment management and operating capabilities. The Company's portfolio of integrated developments, retail, office, lodging and new economy assets are either owned/managed directly or through its fund management platform.

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CapitaLand Investment /Sing (CLI SP)

Singapore Residential Property

Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential...

Asian Century Stocks

ASEAN Builder's Scoop (25Oct21)

CICT hopeful for a stronger 4Q21; METRO acquires SG, AUS props; 3Q21 home prices rose 1.1% QoQ; Office rents reversed, retail rents fell further in...

SCCM Asia Research

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