IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Digital Core REIT / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/digital-core-reit" target="_blank" data-smartkarma-citation="entities:35145:1" rel="noopener">Digital Core REIT (DCREIT SP)</a> is the exclusive S-REIT sponsored by <a href="https://www.smartkarma.com/entities/digital-realty-trust-inc" target="_blank" data-smartkarma-citation="entities:13149:1" rel="noopener">Digital Realty Trust (DLR US)</a>. It is seeking to raise US$600 million at US$0.88 per unit. </li>
<li>In <a href="https://www.smartkarma.com/insights/digital-core-reit-ipo-reaching-for-the-clouds" target="_blank" data-smartkarma-citation="insights:61737" rel="noopener">Digital Core REIT IPO: Reaching for the Clouds</a>, we outlined its attractive value proposition.    </li>
<li>Cornerstones such as Blackrock, Fidelity, JP Morgan AM account for 61% of the offer. Our valuation analysis suggests that the IPO price of $0.88 per unit is reasonable.</li>
</ul>



Digital Core REIT (DCREIT SP) is the exclusive S-REIT sponsored by Digital Realty Trust (DLR US). It is seeking to raise US$600 million at US$0.88 per unit. 
In Digital Core REIT IPO: Reaching for the Clouds, we outlined its attractive value proposition.    
Cornerstones such as Blackrock, Fidelity, JP Morgan AM account for 61% of the offer. Our valuation analysis suggests that the IPO price of $0.88 per unit is reasonable.


Digital Core REIT IPO: Valuation Insights

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/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> settles with insurers for HK$334m over damage to Festival Walk mall</li><li>New bonus GFA incentive scheme for developments that meet standards on digitalization and productivity</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> scraps plan to acquire Vietnam property developer</li></ul>

Mapletree North Asia Commercial Trust (MAGIC SP) settles with insurers for HK$334m over damage to Festival Walk mallNew bonus GFA incentive scheme for developments that meet standards on digitalization and productivityFrasers Property Ltd (FPL SP) scraps plan to acquire Vietnam property developer

ASEAN Builder's Scoop (25Nov21) - MAGIC Settles FW's Insurance Claims

Daiwa House Logistics Trust / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a> has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. </li>
<li>In <a href="https://www.smartkarma.com/insights/daiwa-house-logistics-trust-ipo-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:60978" rel="noopener">Daiwa House Logistics Trust IPO: The Flow of Things</a>, we outlined its attractive value proposition.  </li>
<li>Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP) has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. 
In Daiwa House Logistics Trust IPO: The Flow of Things, we outlined its attractive value proposition.  
Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.


Daiwa House Logistics Trust IPO: Valuation Insights

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

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Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious and watch for updates. 
Closer to home, there are four S-REITs which have their entire portfolio of assets in China – CapitaLand China Trust, Sasseur REIT, EC World REIT, and BHG Retail REIT. 
Together the four S-Reits have generated -0.9 per cent in average price returns over the past week, comparatively to the swings of Chinese property stocks. 
The Reits have averaged 8.0 per cent in total returns in the year-to-date, 6.1 per cent in average distribution yields, and an average gearing ratio of 34.1 per cent which is lower than the sector average of 37.4 per cent.

S-Reits have a regulated leverage limited of 50 per cent.

CapitaLand China Trust (CLCT) is the largest multi-asset China focused S-Reit with an expanded mandate from a pure retail Reit into a diversified portfolio of retail and business park assets since earlier this year. 
Its Sponsor is CapitaLand Investment Limited, a leading global real estate investment manager, which made its trading debut on the SGX last week. 
CLCT has a gearing ratio of 35.9 per cent and average term to maturity of 3.80 years, with the majority of the refinancing requirements in 2021 completed.

It has 78 per cent of its total term loans on fixed interest rates and has hedged approximately 55 per cent of its undistributed income to reduce foreign currency fluctuations.

Sasseur Reit operates four outlet malls located in Chongqing, Bishan, Hefei and Kunming and is Asia's first outlet mall Reit.

The Reit has a gearing ratio of 27.8 per cent which is the lowest across the S-Reits sector and sees this as providing ample debt headroom for potential acquisitions.

Sasseur Reit has an average debt to maturity of 1.7 years and an interest coverage ratio of 4.5 times as at June 30, 2021 which has improved from 4.0 times in Dec 31, 2020.

Its weighted average cost of debt reduced to 4.4 per cent per annum for H1 2021, from 5.3 per cent per annum in H1 2020.

EC World Reit has a diversified portfolio of assets used primarily for e-commerce, supply-chain management and logistics purposes in the e-commerce clusters of Hangzhou and Wuhan.

The Reit has a gearing ratio of 37.6 per cent, weighted average debt maturity of 1.13 years and interest coverage ratio of 2.86 times.

The Reit manager has expressed in its latest financial results that it will continue to actively explore and diversify sources of funding and hedging instruments to optimise its capital structure.

BHG Retail Reit has a diversified portfolio of six retail properties in Beijing, Chengdu, Hefei, Xining and Dalian. It has a gearing ratio of 34.9 per cent.

BHG Retail Reit has an average cost of debt at 3.7 per cent and interest coverage ratio of 2.6 times.

Over 80 per cent of its borrowings are denominated in Singapore dollars and US dollars and about 60 per cent of offshore loans are hedged via interest rate swaps.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/china-focused-s-reits-resilient-amid-onshore-property-focus"> </a><a href="https://www.businesstimes.com.sg/companies-markets/governance-and-transparency-scores-of-s-reits-hit-all-time-high">read</a><a href="https://www.businesstimes.com.sg/companies-markets/10-s-reits-yielding-long-term-annualised-returns"> </a>the original version.
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    SREIT with 100%


Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious and watch for updates.  
Closer to home, there are four S-REITs which have their entire portfolio of assets in China – CapitaLand China Trust, Sasseur REIT, EC World REIT, and BHG Retail REIT.  
Together the four S-Reits have generated -0.9 per cent in average price returns over the past week, comparatively to the swings of Chinese property stocks.  
The Reits have averaged 8.0 per cent in total returns in the year-to-date, 6.1 per cent in average distribution yields, and an average gearing ratio of 34.1 per cent which is lower than the sector average of 37.4 per cent.

S-Reits have a regulated leverage limited of 50 per cent.

CapitaLand China Trust (CLCT) is the largest multi-asset China focused S-Reit with an expanded mandate from a pure retail Reit into a diversified portfolio of retail and business park assets since earlier this year.  
Its Sponsor is CapitaLand Investment Limited, a leading global real estate investment manager, which made its trading debut on the SGX last week.  
CLCT has a gearing ratio of 35.9 per cent and average term to maturity of 3.80 years, with the majority of the refinancing requirements in 2021 completed.

It has 78 per cent of its total term loans on fixed interest rates and has hedged approximately 55 per cent of its undistributed income to reduce foreign currency fluctuations.

Sasseur Reit operates four outlet malls located in Chongqing, Bishan, Hefei and Kunming and is Asia's first outlet mall Reit.

The Reit has a gearing ratio of 27.8 per cent which is the lowest across the S-Reits sector and sees this as providing ample debt headroom for potential acquisitions.

Sasseur Reit has an average debt to maturity of 1.7 years and an interest coverage ratio of 4.5 times as at June 30, 2021 which has improved from 4.0 times in Dec 31, 2020.

Its weighted average cost of debt reduced to 4.4 per cent per annum for H1 2021, from 5.3 per cent per annum in H1 2020.

EC World Reit has a diversified portfolio of assets used primarily for e-commerce, supply-chain management and logistics purposes in the e-commerce clusters of Hangzhou and Wuhan.

The Reit has a gearing ratio of 37.6 per cent, weighted average debt maturity of 1.13 years and interest coverage ratio of 2.86 times.

The Reit manager has expressed in its latest financial results that it will continue to actively explore and diversify sources of funding and hedging instruments to optimise its capital structure.

BHG Retail Reit has a diversified portfolio of six retail properties in Beijing, Chengdu, Hefei, Xining and Dalian. It has a gearing ratio of 34.9 per cent.

BHG Retail Reit has an average cost of debt at 3.7 per cent and interest coverage ratio of 2.6 times.

Over 80 per cent of its borrowings are denominated in Singapore dollars and US dollars and about 60 per cent of offshore loans are hedged via interest rate swaps.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - China focused S-Reits resilient amid onshore property focus

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> acquires third Data Centre in the Netherlands</h3><ul><li>KDCREIT has acquired a 100% interest in a freehold property with two data centre buildings in De Hurk, which is the largest business park in Eindhoven, the Netherlands, for EUR37.2m (~S$59.9m) from a fund affiliated with MCAP Global Finance (UK) LLP, the European subsidiary of Marathon Asset Management. The property, which is located at Dillenburgstraat 25A-25E, 25E1, 25F, 25G and 25J-25M, 5652 AM, will be named Eindhoven Campus. It is KDCREIT’s third asset in the Netherlands, and further strengthens its foothold in this key data centre market in Europe</li><li>Strategically located close to Eindhoven’s city centre and international airport, the property is well connected to the Netherland’s motorway network. Comprising two shell and core data centre buildings as well as a warehouse and an ancillary office building within the site, Eindhoven Campus has a combined NLA of approximately 83,841sqft and is fully leased with a WALE of 6.8 years by NLA and 8.5 years by GRI</li><li>Based on the independent valuation dated 7Jul21, the market value of the property was €35.4m (~S$57.1m). The acquisition is expected to be accretive to KDCREIT's DPU, and is funded by the proceeds from the recent equity fund raising and by debt denominated in EUR</li><li>Including the strategic addition of Eindhoven Campus, KDCREIT’s portfolio occupancy rate will improve from 98.0% as at 30Jun21 to 98.1%, while WALE will remain unchanged at 6.5 years.</li></ul>

SingaporeKeppel DC REIT (KDCREIT SP) acquires third Data Centre in the NetherlandsKDCREIT has acquired a 100% interest in a freehold property with two data centre buildings in De Hurk, which is the largest business park in Eindhoven, the Netherlands, for EUR37.2m (~S$59.9m) from a fund affiliated with MCAP Global Finance (UK) LLP, the European subsidiary of Marathon Asset Management. The property, which is located at Dillenburgstraat 25A-25E, 25E1, 25F, 25G and 25J-25M, 5652 AM, will be named Eindhoven Campus. It is KDCREIT’s third asset in the Netherlands, and further strengthens its foothold in this key data centre market in EuropeStrategically located close to Eindhoven’s city centre and international airport, the property is well connected to the Netherland’s motorway network. Comprising two shell and core data centre buildings as well as a warehouse and an ancillary office building within the site, Eindhoven Campus has a combined NLA of approximately 83,841sqft and is fully leased with a WALE of 6.8 years by NLA and 8.5 years by GRIBased on the independent valuation dated 7Jul21, the market value of the property was €35.4m (~S$57.1m). The acquisition is expected to be accretive to KDCREIT's DPU, and is funded by the proceeds from the recent equity fund raising and by debt denominated in EURIncluding the strategic addition of Eindhoven Campus, KDCREIT’s portfolio occupancy rate will improve from 98.0% as at 30Jun21 to 98.1%, while WALE will remain unchanged at 6.5 years.

Singapore

Lendlease Global Commercial REIT operates as a real estate investment trust. The Company invests in diversified portfolio of real estate assets. Lendlease Global Commercial REIT serves customers worldwide.

Lendlease Global Commercial REIT (LREIT SP)

Frasers Hospitality Trust operates as a real estate investment trust. The Trust owns, operates and invests in hotels and serviced residences.

Yanlord Land Group Ltd is a real estate development company. The Company develops high-end residential property projects in the Peoples Republic of China.

Bukit Sembawang Estates Limited, through its subsidiaries, operates in property development, property mortgage financing, and the holding of properties and investments. The Company provides residential property development throughout Singapore.

Eagle Hospitality Trust is a hospitality stapled group; owns 18 hotels across the U.S..

AIMS APAC REIT is a real estate investment trust. The Trust's principal investment objective is owning and investing in a diversified portfolio of income-producing industrial real estate assets throughout Asia Pacific, including warehousing and logistics, manufacturing, business parks and hi-tech spaces.

Sinarmas Land Ltd. invests in, develops and manages real estate.  The Company owns commercial buildings, hotels and resorts in China, Indonesia, Malaysia and Singapore.

Starhill Global REIT is a real estate investment trust.  The trust invests in retail and office buildings in Singapore and overseas.

Wing Tai Holdings Limited is an investment holding company whose subsidiaries invest in and develop properties, manufacture woven labels, and trade garments and architectural products and accessories.  The Company also provides management services and operates restaurants.

Hong Fok Corporation Limited is an investment holding company whose principal activities consist of property investment, property development, property management, and investment trading.

CBL & Associates Properties, Inc. is a self managed and self administered real estate investment trust. The Company owns regional shopping malls and community shopping centers in the United States.

Immobiliare Grande Distribuzione SIIQ SpA (known as IGD SIIQ) invests in and operates Italian commercial real estate. The Company owns shopping malls and supermarkets.

Dexus Convenience Retail REIT operates as a real estate investment trust. The Company invests in service stations and convenience retail stores. Dexus Convenience serves customers in Australia.

The Necessity Retail REIT, Inc. operates as a publicly traded real estate investment. The Company focuses on acquiring and managing portfolio of primarily service-oriented and traditional retail, as well as distribution commercial real estate properties in the United States.

Hektar Real Estate Investment Trust acquires and invests in income producing real estate in Malaysia.

Hektar Real Estate Investment Trust (HEKT MK)

Hui Xian Real Estate Investment Trust is a real estate investment trust. The trust's sole real estate investment interest at the time of its listing is its investment interest in the Oriental Plaza in Beijing.

MBK Public Company Limited operates property business.  The Company owns Mah Boon Krong Center building complex located in downtown Bangkok.  The complex consists of shopping malls, an office building and the Patumwan Princess Hotel. Through its subsidiaries, the Company mills and distributes rice, other grain products and operates power generation and distribution business.

PT MNC LAND Tbk engages in the development of integrated resorts, commercial properties, and property services. The Company owns and operates a full range of commercial properties in Jakarta, Surabaya and Bali. MNC LAND's integrated resorts include Lido Lake Resort in West Java, Bali Nirwana Resort in Bali, and Mandalika Eco-Tourism Resort in West Nusa Tenggara.

Keihanshin Building Co., Ltd. leases office buildings, computer and telecommunication equipped buildings, off-track-betting, and other commercial facilities.  The Company also provides building management services and undertakes construction works.

Suzhou New District Hi-Tech Industrial Co., Ltd. develops residential buildings and constructs utility, transportation, and communication facilities for Suzhou Hi-Tech Industrial Development Zone.  The Company also provides renovation and warehousing services and invests in other businesses.

Suzhou New District Hi Tech Ind Co. (600736 CH)

Sasseur Real Estate Investment Trust (“Sasseur REIT”) is the first outlet REIT listed in Asia. Sasseur REIT’s property portfolio comprises four outlets with an estimated appraised value of RMB 8.5 billion and net lettable area of 310,241 square metres. The outlets are strategically located in the high-growth cities of Chongqing, Hefei and Kunming in China and well-positioned to ride on the growth of the rising spending power of the Chinese middle class.

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Sasseur REIT (SASSR SP)

Digital Core REIT IPO: Valuation Insights

Digital Core REIT is seeking to raise US$600 million at US$0.88 per unit. Our valuation analysis suggests that the IPO price of $0.88 per unit is...

Arun George

ASEAN Builder's Scoop (25Nov21) - MAGIC Settles FW's Insurance Claims

MAGIC settles FW's insurance claims; New bonus GFA incentive scheme; FPL cancels VN acquisition; SASSR new CFO; SPSB likely exceeds 2021 sales...

SCCM Asia Research

Daiwa House Logistics Trust IPO: Valuation Insights

Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable. Bookbuilding will end on 18 Nov, with an expected listing date...

Arun George

REIT Watch - China focused S-Reits resilient amid onshore property focus

Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (6Sep21)

KDCREIT acquires 3rd DC in Netherlands; Jul21 retail sales flat YoY; MEG rental revenues remain subdued; AGI gears up for Boracay casino; SDPR...

SCCM Asia Research

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