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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li><a href="https://www.smartkarma.com/entities/parkway-life-reit" target="_blank" data-smartkarma-citation="entities:13422" rel="noopener">Parkway Life REIT (PREIT SP)</a> 1H22 DPU +1.5% YoY; New rental term underpins organic growth</li><li><a href="https://www.smartkarma.com/entities/lippo-malls-indonesia-retail-trust" target="_blank" data-smartkarma-citation="entities:10946" rel="noopener">Lippo Malls Indonesia Retail Trust (LMRT SP)</a> 2Q22 DPU flat YoY; Occupancy gradually rebounded QoQ with improvement in shopper traffic</li><li><a href="https://www.smartkarma.com/entities/frasers-property-ltd" target="_blank" data-smartkarma-citation="entities:1670" rel="noopener">Frasers Property Ltd (FPL SP)</a>   3Q22 Business Updates – Robust I&amp;L leasing activity, retail and hospitality picking up in pace</li></ul>

Parkway Life REIT (PREIT SP) 1H22 DPU +1.5% YoY; New rental term underpins organic growthLippo Malls Indonesia Retail Trust (LMRT SP) 2Q22 DPU flat YoY; Occupancy gradually rebounded QoQ with improvement in shopper trafficFrasers Property Ltd (FPL SP)   3Q22 Business Updates – Robust I&amp;L leasing activity, retail and hospitality picking up in pace

ASEAN Builder's Scoop (10Aug22) - PREIT New Rental Term Underpins Growth

<ul><li><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> 1Q22 Business Updates – Improving retail metrics + robust office reversions = top pick</li><li><a href="https://www.smartkarma.com/entities/ara-us-hospitality-trust" target="_blank" data-smartkarma-citation="entities:28048" rel="noopener">ARA US Hospitality Trust (ARAUS SP)</a> 1Q22 Business Updates – Recovery story intact though gearing reaches ~45%</li><li><a href="https://www.smartkarma.com/entities/lippo-malls-indonesia-retail-trust" target="_blank" data-smartkarma-citation="entities:10946" rel="noopener">Lippo Malls Indonesia Retail Trust (LMRT SP)</a> 1Q22 DPU +12.5% YoY; Looking brighter with reversions turning positive</li></ul>

Capitaland Integrated Commercial Trust (CICT SP) 1Q22 Business Updates – Improving retail metrics + robust office reversions = top pickARA US Hospitality Trust (ARAUS SP) 1Q22 Business Updates – Recovery story intact though gearing reaches ~45%Lippo Malls Indonesia Retail Trust (LMRT SP) 1Q22 DPU +12.5% YoY; Looking brighter with reversions turning positive

ASEAN Builder's Scoop (4May22) - CICT Improving Retail + Robust Office Metrics;

<ul><li><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> 2H21 DPU -2.8% YoY; Strong industrial/logistics performance dragged by Office segment</li><li><a href="https://www.smartkarma.com/entities/lippo-malls-indonesia-retail-trust" target="_blank" data-smartkarma-citation="entities:10946" rel="noopener">Lippo Malls Indonesia Retail Trust (LMRT SP)</a> 4Q21 DPU +125% YoY; Patchy road to recovery  </li><li><a href="https://www.smartkarma.com/entities/apac-realty-ltd" target="_blank" data-smartkarma-citation="entities:25900" rel="noopener">APAC Realty Ltd (APAC SP)</a> FY21 net profit +116% YoY; Final dividend of S$4.00c/share implies ~12% yield</li></ul>

Cromwell European REIT (CERT SP) 2H21 DPU -2.8% YoY; Strong industrial/logistics performance dragged by Office segmentLippo Malls Indonesia Retail Trust (LMRT SP) 4Q21 DPU +125% YoY; Patchy road to recovery  APAC Realty Ltd (APAC SP) FY21 net profit +116% YoY; Final dividend of S$4.00c/share implies ~12% yield

ASEAN Builder's Scoop (23Feb22) - CERT Robust Logistics Dragged by Office

<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/000/237/882/original/image_38758426221635344719889.png?1635344723" class="editor-image img-responsive" data-smartkarma-image-id="237882"></figure><h3><a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> 2H21 DPU +39.3% YoY; Resilient occupancy and tenants’ sales amidst Phase-2 temporary setbacks</h3><p>2H21 revenue and NPI surged by 159.9% and 213.2% YoY, respectively, to S$167.5m and S$120.9m, mainly boosted by ARF acquisition. This brought FY21 revenue and NPI to S$341.2m (+107.5% YoY) and S$246.6m (+122.4%) or 96%/98% of BBG estimates, respectively. On a HoH basis, 2H21 revenue and NPI fell 3.5% and 3.8%, respectively, due to rental rebates provided to tenants in Sep21</p>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Frasers Centrepoint Trust (FCT SP) 2H21 DPU +39.3% YoY; Resilient occupancy and tenants’ sales amidst Phase-2 temporary setbacks2H21 revenue and NPI surged by 159.9% and 213.2% YoY, respectively, to S$167.5m and S$120.9m, mainly boosted by ARF acquisition. This brought FY21 revenue and NPI to S$341.2m (+107.5% YoY) and S$246.6m (+122.4%) or 96%/98% of BBG estimates, respectively. On a HoH basis, 2H21 revenue and NPI fell 3.5% and 3.8%, respectively, due to rental rebates provided to tenants in Sep21

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> – Strong Start to FY21; Riding on Co-living trend (BUY; TP S$0.42/Unit)</h3><ul><li>1H21 PATMI jumped 3.66x YoY to S$14.8m, boosted by dormitories mgmt. contracts, which added S$22.4m to top line. While the dormitories mgmt. contracts should taper off in 2H22E, LHN’s recent acquisitions spree of S$61.9m investments in 4 co-living assets (additional 166 keys by end-FY22E) should support earnings with 10-20% ROI upon stabilization. We maintain BUY with a higher TP of S$0.42/share.</li><li>Dormitories mgmt. contracts continue to propel FY21E results. 1H21 revenue +24.9% YoY to S$64.5m, primarily due to higher contributions from Facilities Management Business (+225.5% YoY to S$31.6m) and Logistics Services Business (+6.0% YoY to S$13.5m), partially offset by lower revenue from Space Optimisation Business (-33.6% YoY to S$19.4m). 1H21 PATMI +366.3% YoY to S$14.8m on better margins, higher other income and share of results from associates and JVs, as well as lower fair value loss on investment properties. 1H21 Revenue/PATMI form 52%/59% of our full-year FY21E forecasts as we expect higher 1H21 results vs. 2H21E’s due to the frontloading of dormitories mgmt. contracts, which started in 2H20 and added S$22.4m to 1H21 topline. With the resurgence of Covid-19 cases in Singapore, LHN has recently secured renewal of these contracts for another 6-9months into 1H22E, adding S$12.3m and S$3.4m to 2H21E and 1H22E revenues, respectively</li><li>Mixed performance within Space Optimisation Segment. Industrial Properties and Commercial Properties recorded lower revenues (-46.7% YoY to S$12.8m) due to expiry of 6 master leases (avg. NLA -36.4% YoY to 2.2m sqft), negative rent reversion, downtime at 1557 Keppel Road due to AEI works and IFRS 16 impacts. Meanwhile, Residential Properties revenue (+28.9% YoY to S$6.5m) was boosted by contribution from new serviced residence in Cambodia and higher revenue at 1A Lutheran Road. For the remaining of FY21E, we expect non-renewal of 2 expiring Commercial sites (aggregate NLA of c.63k sqft)</li><li>String of acquisitions for Co-living business should propel growth moving forward. The newly acquired 320 Balestier Road (16Dec20) and 40 &amp; 42 Amber Road (9Jun21), as well as proposed acquisitions of 75 Beach Road and 115 Geylang Road (both are expected to be completed by Jul21) are expected to add 166 keys to LHN’s co-living portfolio in FY22E. The 4 projects with S$61.9m total investments should generate 10-20% return to bottom-line upon stabilization from FY23-24E onwards</li><li>Maintain BUY with a higher TP of S$0.42/shr. Taking into account (i) non-renewal of leases; (ii) renewed dormitories mgmt. contract; (iii) better Logistics Services Business; (iv) the new Co-living keys in FY22E; and (v) higher finance costs, our FY21/22E EPS are adjusted by +10%/-13% to S$6.87c/S$4.55c, respectively. EPS should resume growth at 9% CAGR from FY22-25E as new Residential projects ramp up while Industrial and Commercial Properties improve alongside economy recovery. LHN is currently trading at FY21E P/E of 4.9x and 4.1% yield.</li></ul>

SingaporeLHN Ltd (LHN SP) – Strong Start to FY21; Riding on Co-living trend (BUY; TP S$0.42/Unit)1H21 PATMI jumped 3.66x YoY to S$14.8m, boosted by dormitories mgmt. contracts, which added S$22.4m to top line. While the dormitories mgmt. contracts should taper off in 2H22E, LHN’s recent acquisitions spree of S$61.9m investments in 4 co-living assets (additional 166 keys by end-FY22E) should support earnings with 10-20% ROI upon stabilization. We maintain BUY with a higher TP of S$0.42/share.Dormitories mgmt. contracts continue to propel FY21E results. 1H21 revenue +24.9% YoY to S$64.5m, primarily due to higher contributions from Facilities Management Business (+225.5% YoY to S$31.6m) and Logistics Services Business (+6.0% YoY to S$13.5m), partially offset by lower revenue from Space Optimisation Business (-33.6% YoY to S$19.4m). 1H21 PATMI +366.3% YoY to S$14.8m on better margins, higher other income and share of results from associates and JVs, as well as lower fair value loss on investment properties. 1H21 Revenue/PATMI form 52%/59% of our full-year FY21E forecasts as we expect higher 1H21 results vs. 2H21E’s due to the frontloading of dormitories mgmt. contracts, which started in 2H20 and added S$22.4m to 1H21 topline. With the resurgence of Covid-19 cases in Singapore, LHN has recently secured renewal of these contracts for another 6-9months into 1H22E, adding S$12.3m and S$3.4m to 2H21E and 1H22E revenues, respectivelyMixed performance within Space Optimisation Segment. Industrial Properties and Commercial Properties recorded lower revenues (-46.7% YoY to S$12.8m) due to expiry of 6 master leases (avg. NLA -36.4% YoY to 2.2m sqft), negative rent reversion, downtime at 1557 Keppel Road due to AEI works and IFRS 16 impacts. Meanwhile, Residential Properties revenue (+28.9% YoY to S$6.5m) was boosted by contribution from new serviced residence in Cambodia and higher revenue at 1A Lutheran Road. For the remaining of FY21E, we expect non-renewal of 2 expiring Commercial sites (aggregate NLA of c.63k sqft)String of acquisitions for Co-living business should propel growth moving forward. The newly acquired 320 Balestier Road (16Dec20) and 40 &amp; 42 Amber Road (9Jun21), as well as proposed acquisitions of 75 Beach Road and 115 Geylang Road (both are expected to be completed by Jul21) are expected to add 166 keys to LHN’s co-living portfolio in FY22E. The 4 projects with S$61.9m total investments should generate 10-20% return to bottom-line upon stabilization from FY23-24E onwardsMaintain BUY with a higher TP of S$0.42/shr. Taking into account (i) non-renewal of leases; (ii) renewed dormitories mgmt. contract; (iii) better Logistics Services Business; (iv) the new Co-living keys in FY22E; and (v) higher finance costs, our FY21/22E EPS are adjusted by +10%/-13% to S$6.87c/S$4.55c, respectively. EPS should resume growth at 9% CAGR from FY22-25E as new Residential projects ramp up while Industrial and Commercial Properties improve alongside economy recovery. LHN is currently trading at FY21E P/E of 4.9x and 4.1% yield.

Singapore

Lippo Malls Indonesia Retail Trust is a real estate investment trust that invests in malls and other retail locations.

Lippo Malls Indonesia Retail Trust (LMRT SP)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Lippo Malls Indonesia Retail Trust (LMRT SP)

ASEAN Builder's Scoop (10Aug22) - PREIT New Rental Term Underpins Growth

LMRT gradual rebound in occupancy; FPL robust I&L, retail & hospitality picking up pace; MEG strong 1H22 earnings; DILD-Mitbana JV to develop resi...

SCCM Asia Research

ASEAN Builder's Scoop (4May22) - CICT Improving Retail + Robust Office Metrics;

ARAUS high gearing despite recovery story intact; LMRT reversions turning positive; ALLHC focuses on cold storage and others; BKK condo mrkt...

SCCM Asia Research

ASEAN Builder's Scoop (23Feb22) - CERT Robust Logistics Dragged by Office

LMRT patchy road to recovery; APAC ~12% dividend yield; SSIA partners Hilton to develop LXR Bali resort; Robust demand for PEZA-registered buildings

SCCM Asia Research

ASEAN Builder's Scoop (27Oct21)

FCT temporary hiccups; EREIT persistent negative reversions; MINT boosted by US acquisitions; LMRT early signs of recovery; FIRT performance...

SCCM Asia Research

ASEAN Builder's Scoop (19Aug21)

LHN riding on Co-living uptrend; TSH bags Dunearn Rd freehold site; LMRT obtains S$30m credit facility; SPSB backed by 47 projects worth RM125bn

SCCM Asia Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)