Singapore

• Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).
• The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).
• CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.

• Halcyon Agri (HACL SP) has issued the circular in response to China Hainan Rubber Industry (601118 CH)‘s conditional MGO.
• The IFA reckons the Offer is fair and reasonable. The Independent Directors recommend that shareholders accept the Offer.
• The first close is the 24 March. Hainan Rubber is under no obligation to extend the Offer beyond this date. 

• Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).
• The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).
• CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.

• The Offer Document for GK Goh Holdings (GKG SP)‘s MBO has been dispatched. The Offer price of $1.26/share, which is final, is a 38.5% premium to last close. 
• The Offer is conditional on the Goh family holding 90%, which may be reduced to 50%. GKG Investment, with 62.89%, has given an irrevocable to tender. 
• There is no IFA opinion in the Offer Doc. This will be present in the Circular which is expected to be sent out by the 28th March, at the latest.

• The IFA opines that China Hainan Rubber Industry (601118 CH)‘s MGO at S$0.413 per share is fair and reasonable. The Halcyon Agri (HACL SP) Board recommends accepting the offer.
• Since the offer opened on 24 February, there have been no acceptances. Perhaps minorities held off until the full-year results and the IFA report. Board recommendation should drive acceptance.
• The 50%+ minimum acceptance condition requires around 40% of minorities acceptance rate (47% excluding the Gondobintoro Family). This remains achievable. At the last close, the gross spread is 2.0%.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Jinmao Holdings
• Road King Infrastructure
• Sunny Optical
• Vedanta Resources
• Yanlord Land

• Sea Ltd’s 4Q2022 results were nothing short of spectacular, with the company booking a net profit more than a year ahead of expectations, underlining management’s ability to thrive in adversity.
• The company cut costs and most notably A&P spend on e-commerce but it still managed to grow GMV and booked positive adjust EBITDA for all its core Asian markets.  
• Sea Ltd (SE US) now stands out well ahead of its peers on profitability and should trade at a premium but it will have to continue to execute.

• Sea Ltd (SE US) shares went up by 22% yesterday as the company’s top-line beat consensus by 13% and recorded its first-ever operating profit of $342.9m (consensus: -$344m).
• Main growth drivers such as GMV, orders, Gaming active users and Gross-Bookings indicate that growth could stall. Meanwhile, competition is heating up, sidelining the importance of cost discipline in e-commerce.
• Turning unprofitable yet-again could be a hard thing to swallow, even for those firmly believing in Shopee. Therefore, Sea could fall a lot more than the previous-bottom next-time it falls.

• Sabana Industrial REIT (SSREIT SP)’s partial offer from Volare of S$0.4504 per unit (S$0.465 in cash – S$0.0146 2H2022 distribution) is now unconditional. The final closing date is 24 March.
• On the assumption that ESR Cayman and Quarz Capital did not tender, acceptances representing 16.16% of outstanding units imply current proration is 61.87%.
• Based on the current proration of 61.87% and at the last close price of S$0.420 per unit, the breakeven price is S$0.373 per unit.

• SE reported C4Q22 total revenue 10% and 14% higher than our est. and cons., thanks to the improvement in monetization rate of eCommerce segment. 
• We expect the weak trend to continue into 2023, with intensified competition from eCommerce competitors and weak performance of Free Fire.
• We raise our TP to US$62, which implies 2.5X PS/6X PE/4X PS for eCommerce/gaming/fintech in 2023. Maintain SELL rating due to challenging growth outlook. 

• Olam Group (OLG SP) has despatched the EGM circular to get shareholder approval for the next step in the restructuring exercise to unlock value – Olam Agri IPO.
• The Olam Agri IPO through a dual primary listing (SGX ST and Saudi Arabia) involves a primary (IPO shares are 20% of enlarged shares) and secondary (25% vendor sale) offering. 
• The EGM marks a key step in the strategy to unlock value. Our SoTP valuation is S$2.13 per share, which is a 28% upside to the last close price.

• Golden Energy & Resources (GER SP)’s update notes that the Widjaja family’s offer remains conditional on Indonesian regulatory, Dian Swastatika Sentosa (DSSA IJ) shareholder and SGX circular approval.
• There are four issues – an unattractive distribution cash alternative, a decline in Golden Energy Mines (GEMS IJ) shares, unfavourable FX and an increase in Stanmore Coal (SMR AU) shares.  
• The offer remains light. A “fair” delisting price is around S$0.40 (vs S$0.16 current delisting price) and would imply an all-cash offer of S$1.074, 19% above the last close.

• There are 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals were discussed on Smartkarma this past week: Slater & Gordon (SGH AU)‘s off-market Offer; SHL Japan Ltd (4327 JP)‘s MBO/LBO; and GK Goh Holdings (GKG SP)‘s MBO. 
• Key updates took place for Nitro Software Ltd (NTO AU), Yashili International Holdings (1230 HK), Halcyon Agri (HACL SP), and Golden Energy & Resources (GER SP).

• The Widjaja family’s Offer for Golden Energy (GER SP) back in November has been derided in the press, one outspoken minority shareholder, and (a loosely veiled statement) by Singapore RegCo.
• Now the Securities Investors Association (Singapore) (SIAS) has thrown its hat into the ring and has called on GEAR to improve the Offer for shareholders. 
• The long stop date was surprisingly pushed back five months to satisfy the Exit offer conditions. This delay should avail the family of ample time to bump terms.  

• 2H22 and FY22 DPU rose 13.1% and 24.3% YoY respectively
• 4Q22 hotels RevPAR reached 90% of 4Q19. 4Q22 SR RevPAU surpassed 4Q19 level by 15%
• Far East Hospitality Trust’s (FEHT) 2H22 distribution per unit (DPU) increased 13.1% year-on year (YoY) to 1.73 Singapore cents, bringing full year DPU to 3.27 Singapore cents (+24.3%).

Yanlord Land’s FY 2022 results were acceptable, given its robust contracted sales and cash collection despite the challenging industry environment. In addition, its net debt and leverage metrics were largely stable. We also view positively that the company has not declared any dividend, in order to conserve cash.

Going forward, we expect Yanlord’s liquidity risk profile to remain manageable, despite a reduction in the company’s proportion of freely available cash at FYE 2022. We also anticipate that the company will continue to limit new land acquisitions, in favour of an asset-light approach towards property development. For FY 2023, management has guided for a moderate y-o-y decline in contracted sales. This could reflect its expectation for the property sector to remain subdued. 

• GK Goh Holdings (GKG SP) has disclosed a voluntary conditional offer from management at S$1.26 per share, a 38.5% premium to the undisturbed price (24 February).
• The offer price is final barring a competitive situation. The VGO has a 90%+ minimum acceptance condition which can be waived or lowered. Irrevocables represent 62.89% of outstanding shares.
• The offer price is attractive in comparison to historical trading ranges. The offer will remain open for at least 28 days which points to the earliest of 11 April close.

• Sheng Siong reported a notable decline in same-store sales and operating profits (ex-one off income) for 6M/FY Dec2022 even as it marginally increased annual dividend payout to 70.5%.
• With Singapore’s 10-year Gov. bond yields at 3.34% (vs. sub1%, 3 years ago), dividend yield players like Sheng Siong (SSG SP) may not offer attractive risk-reward at current levels.
• Sheng Siong has traded at dividend yields ranging 3%-3.9% over past 3 years, mostly at a premium to Gov. bond yields. Given muted dividend growth potential, stock faces downside risk.

• 2022 net profit up 20% YoY, beating expectations.
• Final dividend of 42 S cents/share and special dividend of 50 S cents/share proposed.
• Flags downside risks to 2023 peak group NIM guidance, while keeping guidance for mid-single digit loan and double-digit fee income growth.

• AEM (AEM SP) reported record revenues and profits for FY22. Guidance for FY23 was underwhelming and margin pressure was much larger than feared
• On an 18-24 month horizon, we think AEM outperforms but in the short-term stock could see more downside as worries about margin pressure persist
• Lower Fair Value estimate to 6 SGD from 8 SGD (15x 0.40 EPS FY24).

XP Power (XP) battled through FY22 to meet strong customer demand despite numerous supply chain challenges. H2 performance was significantly better than H1 as supply chain pressures started to ease, and XP enters FY23 with a record £308m order book. The company is targeting 10% organic revenue growth across the cycle and a return to historic profitability levels; we expect XP to make progress towards these targets in FY23 and FY24 while reducing gearing.

• Grab Holdings (GRAB US) 4Q2022 numbers late last week made encouraging reading with revenues exceeding expectations significantly despite slow GMV growth in the quarter, as it maintained regional category leadership.
• The company saw continued improvement in segment-adjusted EBITDA margins in 4Q2022 versus 3Q2022 for both mobility and deliveries, with the latter making significant progress towards steady-state margins. 
• Grab‘s relatively high regional cost remains a drag but should stabilise here and outside this, it looks to be firmly on track to accelerate profitably. 

• Raffles Medical reported 2H2022 and full-year 2022 results today. Full-year revenue increased 5.9% YoY to SG$766.5m (vs consensus $774.7m) and OP increased 61.4% YoY to $195.8m (vs consensus $170m).
• Despite Covid-19 related revenues tapering off and China under lockdown during 2H2022, Raffles’ earnings saw a boost from Singapore reopening borders and recovery in foreign patient volume.
• Consensus forecasts are too conservative and does not reflect the recovery in demand for Raffles’ healthcare services in Singapore and China (post reversing of zero-Covid policy).

• Raffles Medical (RFMD SP) reported strong 2022 results, with 6% growth in revenue and 71% increase in net profit. Growth was driven by healthcare services, which contributed 58% of revenue.
• With the reopening of borders and easing of COVID-19 related protocols in H2 2022, RMG saw a return of foreign patients seeking medical treatment in Singapore.
• In view of the company’s strong performance, the Board recommended a dividend of 3.8 cents/share for 2022, representing an increase of 36% as compared to the previous year.

• Singapore-based carsharing platform GetGo Technologies has secured an SGD20 million (US$15 million) investment from Treïs, a family-backed investment group.
• This will enable GetGo to accelerate the growth of its electric fleet with a target of 10,000 greener vehicles by 2030 and to strengthen its technology and operational platform.
• GetGo cars are typically used to take children and the elderly to activities, to go out with family and friends, or to transport bulky items.

• Verveine Pte. Ltd., a vehicle controlled by Goh Geok Khim (executive chairman) and Goh Yew Lin (MD), has made a voluntary offer for GK Goh Holdings (GKG SP).
• The Offer price of $1.26/share, which is final, is a 38.5% premium to last close.  It is conditional on the Gohs holding 90%, which may be reduced to 50%.
• GKG Investment, with 62.89%, has given an irrevocable to tender. 

• ● Grab reported C4Q22 top line 24% higher than our est. and cons., mainly thanks to higher-than-expected net revenue from Deliveries segment. Grab raised its FY23 revenue forecast by ~5%. 
• Deliveries GMV in C4Q22 missed guidance midpoint by (4%) and slowing GMV growth raises market’s concern. We, however, are positive on Grab’s strategy of improving profitability especially amid macro challenges. 
• We cut our forecast on FY23 Deliveries GMV by (4%) and raise FY23 total revenue est. by 8%. Maintain BUY and cut TP to US$3.5.