SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
Initiating Coverage
<h2>Dasin Retail Trust</h2>
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COMPANY DESCRIPTION Dasin Retail Trust (DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong. These properties host a tenant base of over 500 local and international retailers.
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SUMMARY Owing to the COVID-19 pandemic, Revenue for FY2020 was impacted by lower rental income and rental rebates provided to tenants. However, the Group, comprising DRT and its subsidiaries, recorded a 15.1% year-on-year (y-o-y) growth in revenue for the financial year ended 31 December 2020 mainly due to contributions from acquisitions completed in 2019 and 2020. During the period, the Group reported a Distribution Per Unit (DPU) of 3.94 cents compared to 6.82 cents in FY2019. During the period, the Group’s earnings was negatively impacted by a net fair value loss on investment properties of S$104.7 million compared to a loss of S$20.8 million a year ago. Consequently, the Group reported a loss per share of 10.18 cents in FY2020.
RECOMMENDATION Based on DRT reported NAV per share of S$1.41 as at 31 December 2020, the share is currently trading at a P/B of 0.37x, presenting a discount of approximately 63% to NAV. Our peer comparison results show that the Company could be undervalued, given a lower PB of 0.37x compared to peer average P/B of 0.87x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at the P/B multiple of 0.51x. Adopting a relative valuation approach, we estimate a target price of S$0.719 which represent a 39.61% upside from the current price. We believe this upside could be justified by potential growth in the Group’s earnings as supported by the positive outlook on China’s economy and its strategic partnership with Sino-Ocean Capital. Given the above, we believe a buy recommendation is warranted on DRT.
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
Initiating Coverage
Dasin Retail Trust



COMPANY DESCRIPTION Dasin Retail Trust (DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong. These properties host a tenant base of over 500 local and international retailers.

SUMMARY Owing to the COVID-19 pandemic, Revenue for FY2020 was impacted by lower rental income and rental rebates provided to tenants. However, the Group, comprising DRT and its subsidiaries, recorded a 15.1% year-on-year (y-o-y) growth in revenue for the financial year ended 31 December 2020 mainly due to contributions from acquisitions completed in 2019 and 2020. During the period, the Group reported a Distribution Per Unit (DPU) of 3.94 cents compared to 6.82 cents in FY2019. During the period, the Group’s earnings was negatively impacted by a net fair value loss on investment properties of S$104.7 million compared to a loss of S$20.8 million a year ago. Consequently, the Group reported a loss per share of 10.18 cents in FY2020.
RECOMMENDATION Based on DRT reported NAV per share of S$1.41 as at 31 December 2020, the share is currently trading at a P/B of 0.37x, presenting a discount of approximately 63% to NAV. Our peer comparison results show that the Company could be undervalued, given a lower PB of 0.37x compared to peer average P/B of 0.87x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at the P/B multiple of 0.51x. Adopting a relative valuation approach, we estimate a target price of S$0.719 which represent a 39.61% upside from the current price. We believe this upside could be justified by potential growth in the Group’s earnings as supported by the positive outlook on China’s economy and its strategic partnership with Sino-Ocean Capital. Given the above, we believe a buy recommendation is warranted on DRT.




(Non-SGX Report) Initiating Coverage: Dasin Retail Trust

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: 363.047px;"> </td><td style="width: 362.953px;">MLT</td></tr><tr><td style="width: 363.047px;">Period</td><td style="width: 362.953px;">1Q22</td></tr><tr><td style="width: 363.047px;">Gross Revenue (S$ m)</td><td style="width: 362.953px;">163.7 (+23.7% YoY)</td></tr><tr><td style="width: 363.047px;">NPI (S$ m)</td><td style="width: 362.953px;">144.2 (+21.3% YoY)</td></tr><tr><td style="width: 363.047px;">DPU (S$ c)</td><td style="width: 362.953px;">2.161 (+5.7% YoY)</td></tr><tr><td style="width: 363.047px;">NAV per Unit (S$)</td><td style="width: 362.953px;">1.32</td></tr><tr><td style="width: 363.047px;">P/B (x)</td><td style="width: 362.953px;">1.59</td></tr><tr><td style="width: 363.047px;">Occupancy (%)</td><td style="width: 362.953px;">97.8</td></tr><tr><td style="width: 363.047px;">Reversion (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">Gearing (%)</td><td style="width: 362.953px;">38.2</td></tr><tr><td style="width: 363.047px;">Cost of Debt (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">1 Yr Fwd Yield (%)</td><td style="width: 362.953px;">4.14</td></tr><tr><td style="width: 363.047px;">Debt Hedged (%)</td><td style="width: 362.953px;">75%</td></tr><tr><td style="width: 363.047px;">Target Price</td><td style="width: 362.953px;">NA</td></tr><tr><td style="width: 363.047px;">Rating</td><td style="width: 362.953px;">NA</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) MLTPeriod1Q22Gross Revenue (S$ m)163.7 (+23.7% YoY)NPI (S$ m)144.2 (+21.3% YoY)DPU (S$ c)2.161 (+5.7% YoY)NAV per Unit (S$)1.32P/B (x)1.59Occupancy (%)97.8Reversion (%)2.2Gearing (%)38.2Cost of Debt (%)2.21 Yr Fwd Yield (%)4.14Debt Hedged (%)75%Target PriceNARatingNA

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/dasin-retail-trust" target="_blank" data-smartkarma-citation="entities:23743" rel="noopener">Dasin Retail Trust (DASIN SP)</a> terminates partnership with ARA Group; Enters into MoU with Sino-Ocean Capital Holding</h3><ul><li>The board of directors of Dasin Retail Trust Management has been informed by Mr. Zhang Zhencheng, Chairman and controlling shareholder of Dasin Retail Trust Management, as well as Aqua Wealth, a controlling unitholder of DASIN, that all relevant parties have agreed to terminate the SPA and will not be proceeding with the proposed transaction under the sales and purchase agreement</li><li>On the other hand, Mr Zhang Zhencheng had entered into a non-binding MOU with Sino-Ocean Capital Holding Limited on 5Jul21 in pursuance of a strategic partnership. Sino-Ocean Capital is a domestic real estate fund management company, and an alternative asset management company in China. Sino-Ocean Capital currently holds ~6.36% of the total issued units in DASIN via its affiliate Glory Class Ventures Limited</li><li>The Sino-Ocean Capital Partnership will involve an acquisition by Sino-Ocean Capital, Glory Class or any affiliate designated by Sino-Ocean Capital of 70.0% of the total issued share capital in Dasin Retail Trust Management from Mr. Zhang Zhencheng. In conjunction with this acquisition, Sino-Ocean Capital may also acquire such number of units in DASIN from Aqua Wealth which, when added to the units in DASIN currently held by Glory Class, will be no less than 25% of the total issued units in DASIN. The terms of the Sino-Ocean Capital Partnership will be subject to the execution of legally binding definitive documents between the parties which is expected to take place in Jul21</li><li>DASIN is also currently seeking to secure the refinancing of the offshore facilities and to that end is working to obtain the approvals for the refinancing from all the banks within the syndicate of lenders, while contemplating other possible solutions, including applying for a further extension.</li></ul>

SingaporeDasin Retail Trust (DASIN SP) terminates partnership with ARA Group; Enters into MoU with Sino-Ocean Capital HoldingThe board of directors of Dasin Retail Trust Management has been informed by Mr. Zhang Zhencheng, Chairman and controlling shareholder of Dasin Retail Trust Management, as well as Aqua Wealth, a controlling unitholder of DASIN, that all relevant parties have agreed to terminate the SPA and will not be proceeding with the proposed transaction under the sales and purchase agreementOn the other hand, Mr Zhang Zhencheng had entered into a non-binding MOU with Sino-Ocean Capital Holding Limited on 5Jul21 in pursuance of a strategic partnership. Sino-Ocean Capital is a domestic real estate fund management company, and an alternative asset management company in China. Sino-Ocean Capital currently holds ~6.36% of the total issued units in DASIN via its affiliate Glory Class Ventures LimitedThe Sino-Ocean Capital Partnership will involve an acquisition by Sino-Ocean Capital, Glory Class or any affiliate designated by Sino-Ocean Capital of 70.0% of the total issued share capital in Dasin Retail Trust Management from Mr. Zhang Zhencheng. In conjunction with this acquisition, Sino-Ocean Capital may also acquire such number of units in DASIN from Aqua Wealth which, when added to the units in DASIN currently held by Glory Class, will be no less than 25% of the total issued units in DASIN. The terms of the Sino-Ocean Capital Partnership will be subject to the execution of legally binding definitive documents between the parties which is expected to take place in Jul21DASIN is also currently seeking to secure the refinancing of the offshore facilities and to that end is working to obtain the approvals for the refinancing from all the banks within the syndicate of lenders, while contemplating other possible solutions, including applying for a further extension.

ASEAN Builder's Scoop (6Jul21) - DASIN Terminates ARA Partnership

<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: 136.6pt;">
 
</td>
<td style="width: 136.55pt;">
DASIN
</td>
<td style="width: 136.55pt;">
SASSR
</td>
<td style="width: 136.55pt;">
BHGREIT
</td>
<td style="width: 136.55pt;">
CLCT
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Period
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Gross Revenue (S$ m)
</td>
<td style="width: 136.55pt;">
Not Disclosed in SGD terms; RMB127.3m (+87.4% YoY); or RMB101.6m if w/o Shunde Metro Mall and Tanbei Metro Mall (+51.0% YoY)
</td>
<td style="width: 136.55pt;">
EMA Rental Income: 34.1 (+23.4% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
NPI (S$ m)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
264.2 (RMB)
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
DPU (S$ c)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
1.759 (+31.9% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
NAV per Unit (S$)
</td>
<td style="width: 136.55pt;">
1.41 (Based on 4Q20)
</td>
<td style="width: 136.55pt;">
0.922
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
P/B (x)
</td>
<td style="width: 136.55pt;">
0.510
</td>
<td style="width: 136.55pt;">
1.00
</td>
<td style="width: 136.55pt;">
0.64 (Based on 4Q20 NAV)
</td>
<td style="width: 136.55pt;">
0.94 (Based on 4Q20 NAV)
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Occupancy (%)
</td>
<td style="width: 136.55pt;">
96.1
</td>
<td style="width: 136.55pt;">
93.5
</td>
<td style="width: 136.55pt;">
92.1
</td>
<td style="width: 136.55pt;">
Retail: 94.4 Business Parks: 92.1
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Reversion (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Gearing (%)
</td>
<td style="width: 136.55pt;">
37.2
</td>
<td style="width: 136.55pt;">
27.6
</td>
<td style="width: 136.55pt;">
35.6
</td>
<td style="width: 136.55pt;">
35.1
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Cost of Debt (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
3.3
</td>
<td style="width: 136.55pt;">
3.8
</td>
<td style="width: 136.55pt;">
2.51
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 136.55pt;">
6.99
</td>
<td style="width: 136.55pt;">
7.46
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
6.21
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Debt Hedged (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
60% of offshore loans
</td>
<td style="width: 136.55pt;">
~70
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Target Price
</td>
<td style="width: 136.55pt;">
S$0.81
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Rating
</td>
<td style="width: 136.55pt;">
BUY
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
</tr>
</tbody>
</table>
<h3>
<a href="https://www.smartkarma.com/entities/dasin-retail-trust" target="_blank" data-smartkarma-citation="entities:23743" rel="noopener">Dasin Retail Trust (DASIN SP)</a> 1Q21 Business Updates – Revenue recovered to 94% of pre-Covid level; ARA’s strategic stake underscores GBA’s potential</h3>
<ul>
<li>1Q21 revenue (in RMB terms; on same-mall basis) increased 51.0% YoY to ~RMB101.6m. Total revenues of the four malls (IPO portfolio), namely Shiqi Metro Mall, Xiaolan Metro Mall, Ocean Metro Mall and Dasin E-Colour, has recovered to 94% of 1Q19 (pre-pandemic)’s level. Including Shunde Metro Mall and Tanbei Metro Mall (8Jul20), 1Q21 revenue (in RMB terms) increased 87.4% YoY to ~RMB127.3m</li>
<li>Overall portfolio committed occupancy stabilized at 96.1% (vs. 96.5% in 4Q20 and 96.1% in 3Q20). ~9,085sqm (12.7% of total Ocean Metro Mall NLA) of “furniture and finishing” space at the mall has been reconfigured in 4Q20 into a children’s education area, which brought a positive rental reversion of ~46%. Portfolio WALE stood at 5.9 years by NLA and 3.6 years by GRI. ~31.1% of GRI will be due for renewal in FY21E</li>
<li>Portfolio gearing stands at 37.2% (vs. 37.8% in 4Q20 and 38.5% in 3Q20). DASIN is currently negotiating with banks for extension of loans amounting to S$235.2m, which are due on 18Jul21</li>
<li>Mr. Zhang Zhencheng, Chairman and controlling shareholder of the Trustee-Manager, as well as Aqua Wealth Holdings Limited (a controlling unitholder of the Trust), had entered into a sale and purchase agreement with ARA DSRT (Holdings) and ARA Real Estate Investors 22 in pursuance of a strategic partnership with ARA Asset Management. ARA will acquire 50% of interest in the Trustee-Manager from Mr. Zhang Zhencheng, as well as ~5.0% of interest in DASIN from Aqua Wealth Holdings Limited in two separate tranches. The sale of 50% stake in Trustee-Manager and first tranche of DASIN’s units (2.5% stake) is expected to complete by May21</li>
<li>DASIN currently trades at 7.0% FY21E yield and 0.51x P/B.</li>
</ul>
Comments: 1Q21 Revenue forms 23.6% of our full-year FY21E revenue (based on avg. 1Q21 RMB/SGD of 4.8727). We are encouraged by Dasin E-Colour’s strong revenue recovery (to near pre-Covid level) despite a challenging occupancy profile of 86.5% (vs. portfolio average of 96.1% and 1Q20’s 91.9%), thus translating to a robust passing rent at ~RMB125.6psm pm with +107% YoY reversions. Meanwhile, its 2 mature assets, namely Shiqi Metro Mall and Xiaolan Metro Mall (contributed to ~45.6% of 1Q21 revenue), appear to be on track for a sustained recovery – upticks in both occupancy rates and passing rents. The two newly acquired Shunde Metro Mall and Tanbei Metro Mall should provide inorganic boost to with its full-year contributions (vs. 6 mths contributions in FY20). Notwithstanding a challenging leasing market (portfolio occupancy remains below pre-Covid level of 97-98%), DASIN’s lease structure with high fixed components (fixed rent and fixed rent with built-in escalation) at 82.8%% of Mar21 GRI, offer income stability somewhat. We have a BUY rating with TP of S$0.81/Unit for DASIN.
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/207/030/original/image021.png?1621332221" class="editor-image img-responsive" data-smartkarma-image-id="207030"></figure>
</section>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


DASIN


SASSR


BHGREIT


CLCT




Period


1Q21


1Q21


1Q21


1Q21




Gross Revenue (S$ m)


Not Disclosed in SGD terms; RMB127.3m (+87.4% YoY); or RMB101.6m if w/o Shunde Metro Mall and Tanbei Metro Mall (+51.0% YoY)


EMA Rental Income: 34.1 (+23.4% YoY)


Not Disclosed


Not Disclosed




NPI (S$ m)


Not Disclosed


EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)


Not Disclosed


264.2 (RMB)




DPU (S$ c)


Not Disclosed


1.759 (+31.9% YoY)


Not Disclosed


Not Disclosed




NAV per Unit (S$)


1.41 (Based on 4Q20)


0.922


Not Disclosed


Not Disclosed




P/B (x)


0.510


1.00


0.64 (Based on 4Q20 NAV)


0.94 (Based on 4Q20 NAV)




Occupancy (%)


96.1


93.5


92.1


Retail: 94.4 Business Parks: 92.1




Reversion (%)


NA


Not Disclosed


Not Disclosed


Not Disclosed




Gearing (%)


37.2


27.6


35.6


35.1




Cost of Debt (%)


NA


3.3


3.8


2.51




1 Yr Fwd Yield (%)


6.99


7.46


NA


6.21




Debt Hedged (%)


NA


Not Disclosed


60% of offshore loans


~70




Target Price


S$0.81


NA


NA


NA




Rating


BUY


NA


NA


NA





Dasin Retail Trust (DASIN SP) 1Q21 Business Updates – Revenue recovered to 94% of pre-Covid level; ARA’s strategic stake underscores GBA’s potential

1Q21 revenue (in RMB terms; on same-mall basis) increased 51.0% YoY to ~RMB101.6m. Total revenues of the four malls (IPO portfolio), namely Shiqi Metro Mall, Xiaolan Metro Mall, Ocean Metro Mall and Dasin E-Colour, has recovered to 94% of 1Q19 (pre-pandemic)’s level. Including Shunde Metro Mall and Tanbei Metro Mall (8Jul20), 1Q21 revenue (in RMB terms) increased 87.4% YoY to ~RMB127.3m
Overall portfolio committed occupancy stabilized at 96.1% (vs. 96.5% in 4Q20 and 96.1% in 3Q20). ~9,085sqm (12.7% of total Ocean Metro Mall NLA) of “furniture and finishing” space at the mall has been reconfigured in 4Q20 into a children’s education area, which brought a positive rental reversion of ~46%. Portfolio WALE stood at 5.9 years by NLA and 3.6 years by GRI. ~31.1% of GRI will be due for renewal in FY21E
Portfolio gearing stands at 37.2% (vs. 37.8% in 4Q20 and 38.5% in 3Q20). DASIN is currently negotiating with banks for extension of loans amounting to S$235.2m, which are due on 18Jul21
Mr. Zhang Zhencheng, Chairman and controlling shareholder of the Trustee-Manager, as well as Aqua Wealth Holdings Limited (a controlling unitholder of the Trust), had entered into a sale and purchase agreement with ARA DSRT (Holdings) and ARA Real Estate Investors 22 in pursuance of a strategic partnership with ARA Asset Management. ARA will acquire 50% of interest in the Trustee-Manager from Mr. Zhang Zhencheng, as well as ~5.0% of interest in DASIN from Aqua Wealth Holdings Limited in two separate tranches. The sale of 50% stake in Trustee-Manager and first tranche of DASIN’s units (2.5% stake) is expected to complete by May21
DASIN currently trades at 7.0% FY21E yield and 0.51x P/B.

Comments: 1Q21 Revenue forms 23.6% of our full-year FY21E revenue (based on avg. 1Q21 RMB/SGD of 4.8727). We are encouraged by Dasin E-Colour’s strong revenue recovery (to near pre-Covid level) despite a challenging occupancy profile of 86.5% (vs. portfolio average of 96.1% and 1Q20’s 91.9%), thus translating to a robust passing rent at ~RMB125.6psm pm with +107% YoY reversions. Meanwhile, its 2 mature assets, namely Shiqi Metro Mall and Xiaolan Metro Mall (contributed to ~45.6% of 1Q21 revenue), appear to be on track for a sustained recovery – upticks in both occupancy rates and passing rents. The two newly acquired Shunde Metro Mall and Tanbei Metro Mall should provide inorganic boost to with its full-year contributions (vs. 6 mths contributions in FY20). Notwithstanding a challenging leasing market (portfolio occupancy remains below pre-Covid level of 97-98%), DASIN’s lease structure with high fixed components (fixed rent and fixed rent with built-in escalation) at 82.8%% of Mar21 GRI, offer income stability somewhat. We have a BUY rating with TP of S$0.81/Unit for DASIN.




ASEAN Builder's Scoop (18May21) - DASIN strategic investment from ARA

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 <div class='content-caption'>S-REITs & Property Trusts with assets in China</div>
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IT has been over a year since China lifted Wuhan's lockdown. The world's second largest economy announced an 18.3 per cent expansion in gross domestic product (GDP) for the first quarter of 2021 from a year ago. Growth was driven by strong domestic retail sales and exports.

China's retail sales rose 34.2 per cent year on year (yoy) in March, higher than the 33.8 per cent increase in the first two months of 2021. Exports data announced last Friday showed 32.3 per cent yoy growth in April, exceeding analysts' forecasts. With effective Covid-19 containment measures, the International Monetary Fund (IMF) forecasts China's 2021 GDP to expand 8.4 per cent.

The FTSE ST China Index is up 15.2 per cent in the year to May 6.

Among Singapore's listed Reits and property trusts are 10 with exposure to properties in China across various sub-sectors. Of the 10, five have 100 per cent of their assets located in China: CapitaLand China Trust (CLCT), Sasseur Reith, EC World Reit, BHG Retail Reit, and Dasin Retail Trust. The five have an average gearing ratio of 35 per cent, lower than the average of S-Reits (38 per cent); trade at a price-to-book ratio of 0.8 time; and have an average distribution yield of 5.6 per cent. 
CLCT, the largest China-focused S-Reit, has expanded its investment mandate to include office and industrial assets including business parks, logistics facilities, data centres and integrated developments. With the recent acquisition of business parks and balance 49 per cent interest in Rock Square, CLCT's portfolio consists of 11 retail malls and five business park properties across 10 cities. 
CLCT noted in its Q1 business updates that its retail portfolio has seen encouraging recovery in shopper traffic and tenant sales, with yoy increases at 52.1 per cent and 47.2 per cent, respectively. It has an above-market occupancy rate of 94.4 per cent. At its business parks, the percentage of workforce reporting to work returned to pre-Covid-19 levels by mid Q2 2020 and this segment achieved strong rental reversion. Most new tenants in CLCT's business parks portfolio are from high-growth sectors such as electronics (52 per cent of new tenants), information and communications (28 per cent) and e-commerce (17 per cent).

Sasseur Reit, Asia's first outlet mall Reit, has four outlet malls located in Chongqing, Bishan, Hefei and Kunming. In FY2020, it recorded a one per cent increase in distributable income and maintained its distribution per unit despite having to close its outlets for 45 days last year. Sasseur Reit has a gearing ratio of 27.9 per cent, one of the lowest among S-Reits. Its sponsor has three new projects, bringing the number of pipeline projects to 12. There were three pipeline properties at its listing in 2018. Sasseur Reit will announce its Q1 numbers on May 12.

EC World Reit is the first specialised e-commerce, supply-chain management and logistics focused S-Reit. It has eight properties in the e-commerce clusters of Hangzhou and Wuhan. It recorded resilient 10.7 per cent and 11.8 per cent yoy increases in gross revenue and net property income, respectively, in FY2020, attributed to its Fuzhou E-Commerce acquisition in August 2019. The Reit has a gearing ratio of 38.1 per cent and a 99.3 per cent occupancy rate. EC World Reit will announce Q1 numbers on May 11.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/china-poised-to-drive-economic-growth"> read</a><a href="https://www.businesstimes.com.sg/companies-markets/bulk-of-s-reits-in-key-global-real-estate-indices"> </a>the original version.
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    S-REITs & Property Trusts with assets in China


IT has been over a year since China lifted Wuhan's lockdown. The world's second largest economy announced an 18.3 per cent expansion in gross domestic product (GDP) for the first quarter of 2021 from a year ago. Growth was driven by strong domestic retail sales and exports.

China's retail sales rose 34.2 per cent year on year (yoy) in March, higher than the 33.8 per cent increase in the first two months of 2021. Exports data announced last Friday showed 32.3 per cent yoy growth in April, exceeding analysts' forecasts. With effective Covid-19 containment measures, the International Monetary Fund (IMF) forecasts China's 2021 GDP to expand 8.4 per cent.

The FTSE ST China Index is up 15.2 per cent in the year to May 6.

Among Singapore's listed Reits and property trusts are 10 with exposure to properties in China across various sub-sectors. Of the 10, five have 100 per cent of their assets located in China: CapitaLand China Trust (CLCT), Sasseur Reith, EC World Reit, BHG Retail Reit, and Dasin Retail Trust. The five have an average gearing ratio of 35 per cent, lower than the average of S-Reits (38 per cent); trade at a price-to-book ratio of 0.8 time; and have an average distribution yield of 5.6 per cent.  
CLCT, the largest China-focused S-Reit, has expanded its investment mandate to include office and industrial assets including business parks, logistics facilities, data centres and integrated developments. With the recent acquisition of business parks and balance 49 per cent interest in Rock Square, CLCT's portfolio consists of 11 retail malls and five business park properties across 10 cities.  
CLCT noted in its Q1 business updates that its retail portfolio has seen encouraging recovery in shopper traffic and tenant sales, with yoy increases at 52.1 per cent and 47.2 per cent, respectively. It has an above-market occupancy rate of 94.4 per cent. At its business parks, the percentage of workforce reporting to work returned to pre-Covid-19 levels by mid Q2 2020 and this segment achieved strong rental reversion. Most new tenants in CLCT's business parks portfolio are from high-growth sectors such as electronics (52 per cent of new tenants), information and communications (28 per cent) and e-commerce (17 per cent).

Sasseur Reit, Asia's first outlet mall Reit, has four outlet malls located in Chongqing, Bishan, Hefei and Kunming. In FY2020, it recorded a one per cent increase in distributable income and maintained its distribution per unit despite having to close its outlets for 45 days last year. Sasseur Reit has a gearing ratio of 27.9 per cent, one of the lowest among S-Reits. Its sponsor has three new projects, bringing the number of pipeline projects to 12. There were three pipeline properties at its listing in 2018. Sasseur Reit will announce its Q1 numbers on May 12.

EC World Reit is the first specialised e-commerce, supply-chain management and logistics focused S-Reit. It has eight properties in the e-commerce clusters of Hangzhou and Wuhan. It recorded resilient 10.7 per cent and 11.8 per cent yoy increases in gross revenue and net property income, respectively, in FY2020, attributed to its Fuzhou E-Commerce acquisition in August 2019. The Reit has a gearing ratio of 38.1 per cent and a 99.3 per cent occupancy rate. EC World Reit will announce Q1 numbers on May 11.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - China poised to drive economic growth

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Dasin Retail Trust invests in, owns, and develops land and income-producing real estates. The Company operates in Singapore.

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