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/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> renews second major lease in Hengde Logistics (BUY; TP S$0.80/unit)</h3><p>ECWREIT has renewed a second major lease of some 74,057sqm in relation to Hengde Logistics with China Tobacco Zhejiang Industrial. The second major lease (Phase 2 renewal) came after a successful renewal of 152,752sqm of space in Oct20 (Phase 1 renewal). During the Phase 2 renewal, China Tobacco committed to a lease term of 2.65 years to coincide with the expiry of the Phase 1 renewal. Both leases with China Tobacco will expire on 31Dec23. Although the renewal rental rate contracted for the Phase 2 renewal is 8.8% lower than the existing rental rate, the effective blended rental rate of Phase 1 renewal and Phase 2 renewal is 2.2% lower than the effective blended rental rate of the expiring China Tobacco leases at Hengde Logistics Phase 1 and Phase 2. Similar to the Phase 1 Renewal, China Tobacco informed that they will no longer require the warehouse management services for the Phase 2 Renewal due to their internal restructuring. ECWREIT expects the Phase 2 Renewal to reduce ECWREIT’s revenue by 0.8%.</p><p>Comments: The Phase 2 renewal rate at -8.8% came as a surprise with a high single-digit negative reversion, compared the positive reversion of +1.1% in its Phase 1 renewal. This also deviates from mgmt.’s earlier guidance of “similar renewal terms as Phase 1”, which we expect should be “flattish”. While pending further information on the rationale behind such renewal, on a “all-in” basis, we expect a ~3% decrease from FY20 Gross Revenue following its two renewals. We currently have a BUY rating and TP of S$0.80/unit, and will review our recommendations upon results release tomorrow.</p><h3><a href="https://www.smartkarma.com/entities/eagle-hospitality-trust" target="_blank" data-smartkarma-citation="entities:28059" rel="noopener">Eagle Hospitality Trust (EAGLEHT SP)</a> Dallas hotel sale falls through after missed deposit deadline</h3><p>EAGLEHT will not be going ahead with the planned sale of its property in Texas, as the buyer missed the deadline for a deposit. The sale and purchase agreement for Crowne Plaza Dallas Near Galleria-Addison (CPDG) was thus terminated on 4May. EAGLEHT’s wholly-owned subsidiary will hold on to initial deposits of US$1.45m in the aborted US$18.5m deal with buyer Lockwood Development Partners. Numerous EHT entities had filed for Chapter 11 bankruptcy in a Delaware court in 2021. But CPDG is not directly owned by a Chapter 11 entity, so it does not enjoy bankruptcy protection under Section 363 of the United States Bankruptcy Code. Amid the Chapter 11 entities’ limited ability to support CPDG, the decision was made to sell off CPDG, in the face of potential difficulty fetching a higher price in an auction, and the risk that a lender would foreclose on the property after mortgage loan defaults. But the EAGLEHT unit involved in the sale axed the agreement as the buyer did not meet the 3May deadline for an extra deposit of US$1.05m.</p><h3>One Bernam records 80 units sales (23% take-up rate) on its opening weekend</h3><p>MCC Group and Hao Yuan Investment said that over 80 units or 80% of the first phase of 100 units released at their JV project, One Bernam, were sold. This means ~23% out of a total of the 351units in the 99-year leasehold, mixed-use development, has been sold at ~S$2,650psf ASP. More than 90% of the units that were taken up were one- and two-bedroom units sized from 441-872sqft, priced upwards of S$1.017m. Most of the buyers are said to be Singapore citizens and Permanent Residents. In addition to the 351 residential units, One Bernam contains a two-storey retail podium of 15,726sqft, and one floor of serviced apartments with 13 keys. While one- and two-bedroom units make up 91% of the residences in the project, there are 29 three-bedroom apartments of 1,421sqft. There are also two units of three-bedroom penthouses with sizes of 1,744-1,948sqft, while the largest penthouse is 4,306sqft in size and contains five bedrooms. </p><h3>Biggest penthouse at Park Nova sold at S$5,838psf, a record for Orchard Boulevard area</h3><p>Park Nova, Shun Tak Holdings’ luxury condo in Singapore’s Orchard Boulevard-Tomlinson area, has recorded five units sales for well over $100m. The two biggest five-bedroom penthouses in the 54-unit luxury condo at 18 Tomlinson Road fetched S$34.438m and S$26.026m, respectively. The biggest penthouse of 5,899sqft garnered interest from more than one party and almost had to be sold via balloting. However, one party prevailed and emerged the eventual buyer at S$34.438m or S$5,838psf. The transaction price of S$26.026m for the second biggest penthouse of 4,499sqft, worked out to S$5,785psf. The third and smallest penthouse of 3,229sqft is also believed to have been sold for above S$17m.</p>

SingaporeEC World Reit (ECWREIT SP) renews second major lease in Hengde Logistics (BUY; TP S$0.80/unit)ECWREIT has renewed a second major lease of some 74,057sqm in relation to Hengde Logistics with China Tobacco Zhejiang Industrial. The second major lease (Phase 2 renewal) came after a successful renewal of 152,752sqm of space in Oct20 (Phase 1 renewal). During the Phase 2 renewal, China Tobacco committed to a lease term of 2.65 years to coincide with the expiry of the Phase 1 renewal. Both leases with China Tobacco will expire on 31Dec23. Although the renewal rental rate contracted for the Phase 2 renewal is 8.8% lower than the existing rental rate, the effective blended rental rate of Phase 1 renewal and Phase 2 renewal is 2.2% lower than the effective blended rental rate of the expiring China Tobacco leases at Hengde Logistics Phase 1 and Phase 2. Similar to the Phase 1 Renewal, China Tobacco informed that they will no longer require the warehouse management services for the Phase 2 Renewal due to their internal restructuring. ECWREIT expects the Phase 2 Renewal to reduce ECWREIT’s revenue by 0.8%.Comments: The Phase 2 renewal rate at -8.8% came as a surprise with a high single-digit negative reversion, compared the positive reversion of +1.1% in its Phase 1 renewal. This also deviates from mgmt.’s earlier guidance of “similar renewal terms as Phase 1”, which we expect should be “flattish”. While pending further information on the rationale behind such renewal, on a “all-in” basis, we expect a ~3% decrease from FY20 Gross Revenue following its two renewals. We currently have a BUY rating and TP of S$0.80/unit, and will review our recommendations upon results release tomorrow.Eagle Hospitality Trust (EAGLEHT SP) Dallas hotel sale falls through after missed deposit deadlineEAGLEHT will not be going ahead with the planned sale of its property in Texas, as the buyer missed the deadline for a deposit. The sale and purchase agreement for Crowne Plaza Dallas Near Galleria-Addison (CPDG) was thus terminated on 4May. EAGLEHT’s wholly-owned subsidiary will hold on to initial deposits of US$1.45m in the aborted US$18.5m deal with buyer Lockwood Development Partners. Numerous EHT entities had filed for Chapter 11 bankruptcy in a Delaware court in 2021. But CPDG is not directly owned by a Chapter 11 entity, so it does not enjoy bankruptcy protection under Section 363 of the United States Bankruptcy Code. Amid the Chapter 11 entities’ limited ability to support CPDG, the decision was made to sell off CPDG, in the face of potential difficulty fetching a higher price in an auction, and the risk that a lender would foreclose on the property after mortgage loan defaults. But the EAGLEHT unit involved in the sale axed the agreement as the buyer did not meet the 3May deadline for an extra deposit of US$1.05m.One Bernam records 80 units sales (23% take-up rate) on its opening weekendMCC Group and Hao Yuan Investment said that over 80 units or 80% of the first phase of 100 units released at their JV project, One Bernam, were sold. This means ~23% out of a total of the 351units in the 99-year leasehold, mixed-use development, has been sold at ~S$2,650psf ASP. More than 90% of the units that were taken up were one- and two-bedroom units sized from 441-872sqft, priced upwards of S$1.017m. Most of the buyers are said to be Singapore citizens and Permanent Residents. In addition to the 351 residential units, One Bernam contains a two-storey retail podium of 15,726sqft, and one floor of serviced apartments with 13 keys. While one- and two-bedroom units make up 91% of the residences in the project, there are 29 three-bedroom apartments of 1,421sqft. There are also two units of three-bedroom penthouses with sizes of 1,744-1,948sqft, while the largest penthouse is 4,306sqft in size and contains five bedrooms. Biggest penthouse at Park Nova sold at S$5,838psf, a record for Orchard Boulevard areaPark Nova, Shun Tak Holdings’ luxury condo in Singapore’s Orchard Boulevard-Tomlinson area, has recorded five units sales for well over $100m. The two biggest five-bedroom penthouses in the 54-unit luxury condo at 18 Tomlinson Road fetched S$34.438m and S$26.026m, respectively. The biggest penthouse of 5,899sqft garnered interest from more than one party and almost had to be sold via balloting. However, one party prevailed and emerged the eventual buyer at S$34.438m or S$5,838psf. The transaction price of S$26.026m for the second biggest penthouse of 4,499sqft, worked out to S$5,785psf. The third and smallest penthouse of 3,229sqft is also believed to have been sold for above S$17m.

ASEAN Builder's Scoop (10May21) - ECWREIT renews major Hengde logistics lease

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div><p>Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.</p></div><div><p>It has two main businesses: Asia-Pacific Branded Food and Beverage Business (BFB), which sells instant noodles, biscuits and other products, and meat alternative (MA) business which includes Quorn and Cauldron meat alternatives brands.</p></div><div><p>MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. </p></div><div><p>In our previous notes, <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-the-positives-high-market-share" target="_blank" rel="noopener">Monde Nissin Pre-IPO - The Positives - High Market Share</a>, and <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-the-negatives-high-debt-div-payments-floundering-ma" target="_blank" rel="noopener">Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA</a> we spoke about the company background and its past performance. In <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-peer-comparison-for-food-business" target="_blank" rel="noopener">Monde Nissin Pre-IPO - Peer Comparison for Food Business</a> and <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-peer-comparison-for-meat-alternative-business" target="_blank" rel="noopener">Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business</a> we compared the two business with their regional and global peers. In <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">Monde Nissin Pre-IPO - Thoughts on Valuation</a> we discussed our thoughts on valuation.</p></div><div><p>In this note, we’ll talk about implied valuation at its fixed price.</p></div>

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.It has two main businesses: Asia-Pacific Branded Food and Beverage Business (BFB), which sells instant noodles, biscuits and other products, and meat alternative (MA) business which includes Quorn and Cauldron meat alternatives brands.MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. In our previous notes, Monde Nissin Pre-IPO - The Positives - High Market Share, and Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA we spoke about the company background and its past performance. In Monde Nissin Pre-IPO - Peer Comparison for Food Business and Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business we compared the two business with their regional and global peers. In Monde Nissin Pre-IPO - Thoughts on Valuation we discussed our thoughts on valuation.In this note, we’ll talk about implied valuation at its fixed price.

Monde Nissin Pre-IPO - Not Cheap but Sensible

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Philippine Stock Exchange / Equity Bottom-Up

<div class="content-highlight">
<p>Despite pressures on the Philippines from strict lockdowns and continuing issues with rising cases of COVID-19, <strong><a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" data-smartkarma-citation="entities:23182:1" rel="noopener">Philippine Stock Exchange Inc (PSE PM)</a> looks increasingly attractive with a powerful combination of rising volumes and a significant pipeline of IPOs in 2021. </strong></p>
</div>
<p>The exchange has also been a direct beneficiary of COVID-19 as it has encouraged the influx of greater numbers of retail investors, which has boosted market volumes significantly. </p>
<p>The <a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" data-smartkarma-citation="entities:23182:1" rel="noopener">Philippine Stock Exchange Inc (PSE PM)</a> currently only has 272 listed companies, which looks quite a low number but is in the process of encouraging more smaller companies to list. </p>
<p>The rapid increase in IPOs should be positive for margins given the high listing fees that the listing of new shares attracts. We have just seen the approval pass for the US$1bn <a href="https://www.smartkarma.com/entities/monde-nissin-corp" target="_blank" data-smartkarma-citation="entities:32188:1" rel="noopener">Monde Nissin Corp (0191881D PM)</a> IPO, which will focus attention on the overall market.</p>
<p><a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" data-smartkarma-citation="entities:23182:1" rel="noopener">Philippine Stock Exchange (PSE PM)</a> has outlined a number of new initiatives to increase liquidity and the number of new listings.</p>
<p>The company is also looking to increasingly digitize its business by upgrading its clearing and settlement system and shortening settlement to T+2. </p>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" data-smartkarma-citation="entities:23182:1" rel="noopener">Philippine Stock Exchange (PSE PM)</a> is trading at a discount to regional exchanges on 17.1x FY21E PER, which trades on an average forward PER of 29x. There are also a number of potential catalysts ahead, the most obvious being higher volumes, driven by increasing retail participation plus more IPOs in FY2021.</p>
</div>


Despite pressures on the Philippines from strict lockdowns and continuing issues with rising cases of COVID-19, Philippine Stock Exchange Inc (PSE PM) looks increasingly attractive with a powerful combination of rising volumes and a significant pipeline of IPOs in 2021. 

The exchange has also been a direct beneficiary of COVID-19 as it has encouraged the influx of greater numbers of retail investors, which has boosted market volumes significantly. 
The Philippine Stock Exchange Inc (PSE PM) currently only has 272 listed companies, which looks quite a low number but is in the process of encouraging more smaller companies to list. 
The rapid increase in IPOs should be positive for margins given the high listing fees that the listing of new shares attracts. We have just seen the approval pass for the US$1bn Monde Nissin Corp (0191881D PM) IPO, which will focus attention on the overall market.
Philippine Stock Exchange (PSE PM) has outlined a number of new initiatives to increase liquidity and the number of new listings.
The company is also looking to increasingly digitize its business by upgrading its clearing and settlement system and shortening settlement to T+2. 

Philippine Stock Exchange (PSE PM) is trading at a discount to regional exchanges on 17.1x FY21E PER, which trades on an average forward PER of 29x. There are also a number of potential catalysts ahead, the most obvious being higher volumes, driven by increasing retail participation plus more IPOs in FY2021.


Philippine Stock Exchange Inc (PSE PM) - Overlooked and On the Up

<div><p>Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.</p></div><div><p>It has two main businesses: Asia-Pacific Branded Food and Beverage Business (BFB), which sells instant noodles, biscuits and other products, and meat alternative (MA) business which includes Quorn and Cauldron meat alternatives brands.</p></div><div><p>MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. </p></div><div><p>In our previous notes, <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-the-positives-high-market-share" target="_blank" rel="noopener">Monde Nissin Pre-IPO - The Positives - High Market Share</a>, and <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-the-negatives-high-debt-div-payments-floundering-ma" target="_blank" rel="noopener">Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA</a> we spoke about the company background and its past performance. In <a href="https://www.smartkarma.com/insights/monde-nissin-pre-ipo-peer-comparison-for-food-business" target="_blank" rel="noopener">Monde Nissin Pre-IPO - Peer Comparison for Food Business</a> we compared the food business with regional and local peers.</p></div><div><p>In this note, we’ll compare its Meat Alterative division with its global rivals.</p></div>

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.It has two main businesses: Asia-Pacific Branded Food and Beverage Business (BFB), which sells instant noodles, biscuits and other products, and meat alternative (MA) business which includes Quorn and Cauldron meat alternatives brands.MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. In our previous notes, Monde Nissin Pre-IPO - The Positives - High Market Share, and Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA we spoke about the company background and its past performance. In Monde Nissin Pre-IPO - Peer Comparison for Food Business we compared the food business with regional and local peers.In this note, we’ll compare its Meat Alterative division with its global rivals.

Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business

<div>
<p>DDMP REIT (DDMPR), a subsidiary of DoubleDragon Properties Corp (DDP), raised around US$275m in its Philippines listing.</p>
</div>
<div>
<p>DDMPR will be the second REIT listing in the Philippines, after <a href="https://www.smartkarma.com/entities/areit-ayalaland-reit" target="_blank" data-smartkarma-citation="entities:28856:1" rel="noopener">Areit (AyalaLand REIT) (AREIT PM)</a>. </p>
</div>
<div>
<p>We looked at the background of the REIT in our earlier notes, <a href="https://www.smartkarma.com/insights/ddpm-reit-pre-ipo-brand-new-assets-but-not-with-the-best-of-outlooks" target="_blank" rel="noopener">DDMP REIT Pre-IPO - Brand new assets but not with the best of outlooks</a>,  <a href="https://www.smartkarma.com/insights/ddmp-reit-pre-ipo-peer-review" target="_blank" rel="noopener">DDMP REIT Pre-IPO - Peer Review</a> and <a href="https://www.smartkarma.com/insights/ddmp-reit-ipo-would-go-in-towards-the-low-end" target="_blank" rel="noopener">DDMP REIT IPO - Would Go in Towards the Low-End</a>. </p>
</div>
<div>
<p>In this note, we’ll talk about the trading dynamics.</p>
</div>


DDMP REIT (DDMPR), a subsidiary of DoubleDragon Properties Corp (DDP), raised around US$275m in its Philippines listing.


DDMPR will be the second REIT listing in the Philippines, after Areit (AyalaLand REIT) (AREIT PM). 


We looked at the background of the REIT in our earlier notes, DDMP REIT Pre-IPO - Brand new assets but not with the best of outlooks,  DDMP REIT Pre-IPO - Peer Review and DDMP REIT IPO - Would Go in Towards the Low-End. 


In this note, we’ll talk about the trading dynamics.


DDMP REIT IPO Trading - Priced at the Top of the Range, Upside Remains Unclear

Philippines

Robinsons Land Corporation invests in and develops real estate. The Company develops residential housing and commercial real estate and operates shopping malls and hotels.

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Robinsons Land Co (RLC PM)

ASEAN Builder's Scoop (10May21) - ECWREIT renews major Hengde logistics lease

ECWREIT renews major Hengde logistics lease; EAGLEHT Dallas hotel sales fell through; ALI recovering slowly but surely, RLC 1Q21 results weighed by...

SCCM Asia Research

Monde Nissin Pre-IPO - Not Cheap but Sensible

Monde Nissin aims to raise around US$1bn in its Philippines IPO. It has two main businesses: Branded Food and Beverage Business, which sells...

Sumeet Singh

Philippine Stock Exchange Inc (PSE PM) - Overlooked and On the Up

The Philippine Stock Exchange (PSE PM) is probably the most overlooked listed stock exchange in Asia, with the catalyst of higher volumes driven by...

Angus Mackintosh

Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO. In this note, we will compare its...

Sumeet Singh

DDMP REIT IPO Trading - Priced at the Top of the Range, Upside Remains Unclear

DDMP REIT (DDMPR), a subsidiary of DoubleDragon Properties Corp (DDP), raised around US$275m in its Philippines listing. In this note, we’ll talk...

Sumeet Singh

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