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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

CapitaLand China Trust / Equity Bottom-Up

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
 

<ul>
<li>
Of the S-REITs on SGX, at least five have 100% of their assets located in China. Of these, the three largest by market cap are: CapitaLand Retail China Trust, Sasseur REIT and Dasin Retail Trust, which own shopping mall assets in the country. 
	 </li>
	<li>
For 1Q 2020, Sasseur REIT unveiled a DPU of 1.33 Singapore cents, down 19.4% YoY, while Dasin Retail Trust reported a DPU (with distribution waiver) of 0.71 Singapore cents and a DPU (without distribution waiver) of 0.50 cents, reflecting a 58.2% and 47.4% YoY decline respectively. CRCT also noted that total shopper traffic and tenants’ sales its in malls declined by 37.6% YoY and 42.5% YoY respectively. 
	 </li>
	<li>
The three China REITs said they expect more short-term volatility ahead amidst a still-challenging business environment, but were cautiously optimistic of 2H 2020, given the government's swift response in rolling out monetary and fiscal stimulus to combat the impact of COVID-19. 
	 
	Of the S-REITs on SGX, at least five have 100% of their assets located in China. Of these, the three largest by market capitalisation are: CapitaLand Retail China Trust, Sasseur REIT and Dasin Retail Trust, which own shopping mall assets in the country. 
	Over the last few weeks, Sasseur REIT unveiled its results for the three months ended 31 March 2019, while CRCT and Dasin Retail Trust, which opted to report on a half-yearly basis, provided business updates for the March quarter. Earnings Highlights 
	For the quarter ended 31 March 2020, Sasseur REIT unveiled a distribution per unit (DPU) of 1.33 Singapore cents, down 19.4% YoY, and representing 100% of the total distributable income of S$16.0 million. Dasin Retail Trust reported a DPU (with distribution waiver) of 0.71 Singapore cents and a DPU (without distribution waiver) of 0.50 cents, reflecting a 58.2% and 47.4% YoY decline respectively. Distribution waiver is where the major unitholders have waived a portion of their entitlement to distributions from the trust. 
	During the March quarter, CRCT said it provided individual tailored solutions for its tenants based on their requirements and needs, including staggering rental payments by instalments to ease cashflow needs, and implementing flexible leasing strategies. Although total shopper traffic and tenants’ sales declined by 37.6% YoY and 42.5% YoY respectively in 1Q 2020, CRCT noted that signs of recovery have emerged in March, with shopper traffic rebounding 105% from February, and tenants’ sales surging 189% MoM. 
	Sasseur REIT noted that total outlet sales for 1Q 2020 fell 55.7% YoY, due to temporary closure of all four outlet malls from end-January to mid-March 2020 to prevent spread of COVID-19. While the temporary closures have led to lower sales, EMA rental income (excluding straight-line adjustment) for 1Q 2020 only declined 17.1%, due to the fixed component of EMA rental income from the Sponsor, in accordance with the Entrusted Management Agreement. Under the EMA model, this fixed component ensures stability of rental income despite the closures. The fixed component income has a built-in annual escalation of 3%. 
	For the March quarter, Dasin posted a 30.4% YoY decline in net property income to S$10.4 million, while revenue fell 21.0% to S$13.7 million, due to the impact of COVID-19. Approximately S$6.0 million of rental rebates were provided to tenants in February and March 2020. 
	 

	<table class="table table-striped"><tbody>
<tr>
<td>
				Name
				</td>
				<td>
				EMA~ Rental Income (RMB mln)
				</td>
				<td>
				YoY Chg (%)
				</td>
				<td>
				EMA~ Rental Income (excl straight-line adj) (S$M)
				</td>
				<td>
				YoY Chg (%)
				</td>
				<td>
				DPU (SG cts)
				</td>
				<td>
				YoY Chg (%)
				</td>
			</tr>
<tr>
<td>
				SASSEUR REIT
				</td>
				<td>
				127.2
				</td>
				<td>
				-17.1
				</td>
				<td>
				25.3
				</td>
				<td>
				-18.2
				</td>
				<td>
				1.33
				</td>
				<td>
				-19.4
				</td>
			</tr>
</tbody></table>
~Entrusted Management Agreement rental income model

	Note: Avg SGD:RMB rate of 1:5.0339 for 1Q 2020 
	Source: Company data

	<table class="table table-striped"><tbody>
<tr>
<td>
				Name
				</td>
				<td>
				Net Property Income (S$M)
				</td>
				<td>
				YoY Chg (%)
				</td>
				<td>
				Revenue (S$M)
				</td>
				<td>
				YoY Chg (%)
				</td>
			</tr>
<tr>
<td>
				DASIN RETAIL TRUST
				</td>
				<td>
				10.4
				</td>
				<td>
				-30.4
				</td>
				<td>
				13.7
				</td>
				<td>
				-21.0
				</td>
			</tr>
<tr>
<td> </td>
				<td> </td>
				<td> </td>
				<td> </td>
				<td> </td>
			</tr>
<tr>
<td>
				Name
				</td>
				<td>
				DPU (SG cts) (With Distribution Waiver*)
				</td>
				<td>
				YoY Chg (%)
				</td>
				<td>
				DPU (SG cts) (Without Distribution Waiver*)
				</td>
				<td>
				YoY Chg (%)
				</td>
			</tr>
<tr>
<td>
				DASIN RETAIL TRUST
				</td>
				<td>
				0.71
				</td>
				<td>
				-58.2
				</td>
				<td>
				0.50
				</td>
				<td>
				-47.4
				</td>
			</tr>
</tbody></table>
*Distribution waiver: where major unitholders have waived a portion of their entitlement to distributions from the trust

	Source: Company data 
	 

	Debt Profiles

	The three REITs averaged an aggregate leverage ratio of 33.5% as at 31 March 2020, compared with an average of 33.7% as at 31 December 2019. Sasseur REIT had the lowest gearing of 28.5%, while Dasin had the highest aggregate leverage ratio of 36.2%.

	<table class="table table-striped"><tbody>
<tr>
<td>
				Name
				</td>
				<td>
				Aggregate Leverage Ratio (%) as at 31 March 2020
				</td>
				<td>
				Aggregate Leverage Ratio (%) as at 31 Dec 2019
				</td>
				<td>
				Interest Coverage Ratio (x) as at 31 March 2020
				</td>
				<td>
				Interest Coverage Ratio (x) as at 31 Dec 2019
				</td>
			</tr>
<tr>
<td>
				CAPITALAND RETAIL CHINA TRUST
				</td>
				<td>
				35.8
				</td>
				<td>
				36.7
				</td>
				<td>
				4.3
				</td>
				<td>
				5.0
				</td>
			</tr>
<tr>
<td>
				SASSEUR REIT
				</td>
				<td>
				28.5
				</td>
				<td>
				27.8
				</td>
				<td>
				4.7
				</td>
				<td>
				4.8
				</td>
			</tr>
<tr>
<td>
				DASIN RETAIL TRUST
				</td>
				<td>
				36.2
				</td>
				<td>
				36.5
				</td>
				<td>
				NA
				</td>
				<td>
				NA
				</td>
			</tr>
<tr>
<td>
				Average
				</td>
				<td>
				33.5
				</td>
				<td>
				33.7
				</td>
				<td>
				 
				</td>
				<td>
				 
				</td>
			</tr>
</tbody></table>
Source: Company data

	 

	<table class="table table-striped"><tbody>
<tr>
<td>
				Name
				</td>
				<td>
				Total Debt (S$M) as at 31 March 2020
				</td>
				<td>
				Total Debt (S$M) as at 31 Dec 2019
				</td>
				<td colspan="2">
				Weighted Avg Term to Maturity (yrs) as at 31 March 2020
				</td>
				<td colspan="2">
				Weighted Avg Term to Maturity (yrs) as at 31 Dec 2019
				</td>
			</tr>
<tr>
<td>
				CAPITALAND RETAIL CHINA TRUST
				</td>
				<td>
				1,416
				</td>
				<td>
				1,383
				</td>
				<td colspan="2">
				2.6
				</td>
				<td colspan="2">
				2.8
				</td>
			</tr>
<tr>
<td>
				SASSEUR REIT
				</td>
				<td>
				503*
				</td>
				<td>
				492*
				</td>
				<td colspan="2">
				2.5
				</td>
				<td colspan="2">
				2.7
				</td>
			</tr>
<tr>
<td>
				DASIN RETAIL TRUST
				</td>
				<td>
				729.8~
				</td>
				<td>
				716.2~
				</td>
				<td>
				5.5^
				</td>
				<td>
				1.1#
				</td>
				<td>
				5.7^
				</td>
				<td>
				1.3#
				</td>
			</tr>
</tbody></table>
~Gross borrowings

	*Onshore &amp; offshore debt combined; SGD:RMB rate of 1:5.1739 (31 Dec 2019) &amp; 1:4.9724 (31 Mar 2020)

	^Onshore debt; #Offshore debt

	Source: Company data 
	 

	Outlook

	CapitaLand Retail China Trust 
	 
	</li>
	<li>Short-term volatility expected amidst a still-challenging business environment</li>
	<li>Cautiously optimistic for 2H 2020 on government pro-business stimulus</li>
	<li>Proactively positioned to capture opportunities as China’s economic and business activities gain momentum</li>
	<li>Resilient and quality portfolio that caters to strong catchment and necessity spending</li>
	<li>Experienced ground team with strong domain knowledge to capture new retail and consumer trends</li>
	<li>Tapping on sticky customer engagement with digital initiatives to capture shifting preferences and spending</li>
	<li>Healthy liquidity with cost discipline:
	<ul>
<li>Early refinancing of S$150 million term loan due in 2020 to 2026; secured competitive interest rates with extended tenure</li>
		<li>No long-term debt maturing until 2021</li>
		<li>Well-supported by banks and MTN program</li>
		<li>Undrawn uncommitted debt facilities of S$237.1 million and security deposits of 3 months available to tap on</li>
		<li>Conserve cash flow by postponing non-essential capex</li>
		<li>Reduce general and administrative expenses 
		Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/DC4QFL6BZMGW8WKJ/20200423_Annc_1Q2020_Business_Updates.pdf">here</a> for full results presentation. 
		 </li>
	</ul>
</li>
</ul>
       Sasseur REIT 
 

<ul>
<li>Intensive marketing efforts, online engagements and organised events have helped generate and retain customer interest, thereby mitigating the COVID-19 impact</li>
	<li>As China was among the first few countries to recover and restart its economy from April 2020, Sasseur REIT is in a position to recover its performance from 2Q 2020 onwards</li>
	<li>Since the retail outlet industry is counter-cyclical, it continues to be more resilient against economic downturns</li>
	<li>The REIT will continue to maintain customer engagement and increase sales through its online and social media platforms, as well as at its malls through multiple promotional events in coming months</li>
	<li>The recent relaxation of the gearing limit for SGX-listed REITs – from 45% to 50% – provides Sasseur REIT with higher debt headroom and capital management flexibility to pursue growth through yield-accretive acquisitions
	Click <a href="https://links.sgx.com/FileOpen/Sasseur_REIT-Press_Release_Q1FY2020.ashx?App=Announcement&amp;FileID=610696">here</a> for full results release.

	 

	Dasin Retail Trust 
	 
	</li>
	<li>China’s government has been swift in introducing monetary and fiscal policies in response to the COVID-19 outbreak</li>
	<li>Uncertainties are expected in the short term, and the business environment remains challenging</li>
	<li>The Trust remains optimistic about its 2H 2020 performance; will continue to observe the situation closely and prepare for short-term challenges</li>
	<li>Its existing lease structures are highly resistant; will seek to optimise the tenant mix and foster amicable relationship with tenants</li>
	<li>Experienced ground staff who are knowledgeable and sensitive to retail trends are leveraging on O2O platforms to meet changing consumer demands</li>
	<li>Healthy financial position and strong operational capabilities</li>
	<li>Implemented strict cost controls and risk management strategies</li>
	<li>Update on proposed Acquisition of Shunde Metro Mall and Tanbei Metro Mall:
	<ul>
<li>Due to COVID-19, the proposed private placement of up to 120 million new units in the Trust to fund the acquisition has been delayed</li>
		<li>With the recent strengthening of RMB vs SGD and decrease in the market price of units in the Trust, the number of new units to be issued in the private placement would likely exceed the 120 million new units approved at the EGM</li>
		<li>In this case, the Trustee-Manager will rely on the general unit issue mandate obtained from unitholders at the 18 April 2019 AGM to issue any additional units
		 
		Click <a href="https://links.sgx.com/FileOpen/DASINRT_Investor%20Presentation%20Slides_Final_23%20May%202020_EN.ashx?App=Announcement&amp;FileID=612210">here</a> for full results presentation.
		</li>
	</ul>
</li>
</ul>
</body></html>



 



Of the S-REITs on SGX, at least five have 100% of their assets located in China. Of these, the three largest by market cap are: CapitaLand Retail China Trust, Sasseur REIT and Dasin Retail Trust, which own shopping mall assets in the country. 
	 
	
For 1Q 2020, Sasseur REIT unveiled a DPU of 1.33 Singapore cents, down 19.4% YoY, while Dasin Retail Trust reported a DPU (with distribution waiver) of 0.71 Singapore cents and a DPU (without distribution waiver) of 0.50 cents, reflecting a 58.2% and 47.4% YoY decline respectively. CRCT also noted that total shopper traffic and tenants’ sales its in malls declined by 37.6% YoY and 42.5% YoY respectively. 
	 
	
The three China REITs said they expect more short-term volatility ahead amidst a still-challenging business environment, but were cautiously optimistic of 2H 2020, given the government's swift response in rolling out monetary and fiscal stimulus to combat the impact of COVID-19. 
	 
	Of the S-REITs on SGX, at least five have 100% of their assets located in China. Of these, the three largest by market capitalisation are: CapitaLand Retail China Trust, Sasseur REIT and Dasin Retail Trust, which own shopping mall assets in the country.  
	Over the last few weeks, Sasseur REIT unveiled its results for the three months ended 31 March 2019, while CRCT and Dasin Retail Trust, which opted to report on a half-yearly basis, provided business updates for the March quarter.  Earnings Highlights  
	For the quarter ended 31 March 2020, Sasseur REIT unveiled a distribution per unit (DPU) of 1.33 Singapore cents, down 19.4% YoY, and representing 100% of the total distributable income of S$16.0 million. Dasin Retail Trust reported a DPU (with distribution waiver) of 0.71 Singapore cents and a DPU (without distribution waiver) of 0.50 cents, reflecting a 58.2% and 47.4% YoY decline respectively. Distribution waiver is where the major unitholders have waived a portion of their entitlement to distributions from the trust.  
	During the March quarter, CRCT said it provided individual tailored solutions for its tenants based on their requirements and needs, including staggering rental payments by instalments to ease cashflow needs, and implementing flexible leasing strategies. Although total shopper traffic and tenants’ sales declined by 37.6% YoY and 42.5% YoY respectively in 1Q 2020, CRCT noted that signs of recovery have emerged in March, with shopper traffic rebounding 105% from February, and tenants’ sales surging 189% MoM.  
	Sasseur REIT noted that total outlet sales for 1Q 2020 fell 55.7% YoY, due to temporary closure of all four outlet malls from end-January to mid-March 2020 to prevent spread of COVID-19. While the temporary closures have led to lower sales, EMA rental income (excluding straight-line adjustment) for 1Q 2020 only declined 17.1%, due to the fixed component of EMA rental income from the Sponsor, in accordance with the Entrusted Management Agreement. Under the EMA model, this fixed component ensures stability of rental income despite the closures. The fixed component income has a built-in annual escalation of 3%.  
	For the March quarter, Dasin posted a 30.4% YoY decline in net property income to S$10.4 million, while revenue fell 21.0% to S$13.7 million, due to the impact of COVID-19. Approximately S$6.0 million of rental rebates were provided to tenants in February and March 2020. 
	 

	


				Name
				
				
				EMA~ Rental Income (RMB mln)
				
				
				YoY Chg (%)
				
				
				EMA~ Rental Income (excl straight-line adj) (S$M)
				
				
				YoY Chg (%)
				
				
				DPU (SG cts)
				
				
				YoY Chg (%)
				
			


				SASSEUR REIT
				
				
				127.2
				
				
				-17.1
				
				
				25.3
				
				
				-18.2
				
				
				1.33
				
				
				-19.4
				
			

~Entrusted Management Agreement rental income model

	Note: Avg SGD:RMB rate of 1:5.0339 for 1Q 2020 
	Source: Company data

	


				Name
				
				
				Net Property Income (S$M)
				
				
				YoY Chg (%)
				
				
				Revenue (S$M)
				
				
				YoY Chg (%)
				
			


				DASIN RETAIL TRUST
				
				
				10.4
				
				
				-30.4
				
				
				13.7
				
				
				-21.0
				
			

 
				 
				 
				 
				 
			


				Name
				
				
				DPU (SG cts) (With Distribution Waiver*)
				
				
				YoY Chg (%)
				
				
				DPU (SG cts) (Without Distribution Waiver*)
				
				
				YoY Chg (%)
				
			


				DASIN RETAIL TRUST
				
				
				0.71
				
				
				-58.2
				
				
				0.50
				
				
				-47.4
				
			

*Distribution waiver: where major unitholders have waived a portion of their entitlement to distributions from the trust

	Source: Company data 
	 

	Debt Profiles

	The three REITs averaged an aggregate leverage ratio of 33.5% as at 31 March 2020, compared with an average of 33.7% as at 31 December 2019. Sasseur REIT had the lowest gearing of 28.5%, while Dasin had the highest aggregate leverage ratio of 36.2%.

	


				Name
				
				
				Aggregate Leverage Ratio (%) as at 31 March 2020
				
				
				Aggregate Leverage Ratio (%) as at 31 Dec 2019
				
				
				Interest Coverage Ratio (x) as at 31 March 2020
				
				
				Interest Coverage Ratio (x) as at 31 Dec 2019
				
			


				CAPITALAND RETAIL CHINA TRUST
				
				
				35.8
				
				
				36.7
				
				
				4.3
				
				
				5.0
				
			


				SASSEUR REIT
				
				
				28.5
				
				
				27.8
				
				
				4.7
				
				
				4.8
				
			


				DASIN RETAIL TRUST
				
				
				36.2
				
				
				36.5
				
				
				NA
				
				
				NA
				
			


				Average
				
				
				33.5
				
				
				33.7
				
				
				 
				
				
				 
				
			

Source: Company data

	 

	


				Name
				
				
				Total Debt (S$M) as at 31 March 2020
				
				
				Total Debt (S$M) as at 31 Dec 2019
				
				
				Weighted Avg Term to Maturity (yrs) as at 31 March 2020
				
				
				Weighted Avg Term to Maturity (yrs) as at 31 Dec 2019
				
			


				CAPITALAND RETAIL CHINA TRUST
				
				
				1,416
				
				
				1,383
				
				
				2.6
				
				
				2.8
				
			


				SASSEUR REIT
				
				
				503*
				
				
				492*
				
				
				2.5
				
				
				2.7
				
			


				DASIN RETAIL TRUST
				
				
				729.8~
				
				
				716.2~
				
				
				5.5^
				
				
				1.1#
				
				
				5.7^
				
				
				1.3#
				
			

~Gross borrowings

	*Onshore &amp; offshore debt combined; SGD:RMB rate of 1:5.1739 (31 Dec 2019) &amp; 1:4.9724 (31 Mar 2020)

	^Onshore debt; #Offshore debt

	Source: Company data 
	 

	Outlook

	CapitaLand Retail China Trust  
	 
	
	Short-term volatility expected amidst a still-challenging business environment
	Cautiously optimistic for 2H 2020 on government pro-business stimulus
	Proactively positioned to capture opportunities as China’s economic and business activities gain momentum
	Resilient and quality portfolio that caters to strong catchment and necessity spending
	Experienced ground team with strong domain knowledge to capture new retail and consumer trends
	Tapping on sticky customer engagement with digital initiatives to capture shifting preferences and spending
	Healthy liquidity with cost discipline:
	
Early refinancing of S$150 million term loan due in 2020 to 2026; secured competitive interest rates with extended tenure
		No long-term debt maturing until 2021
		Well-supported by banks and MTN program
		Undrawn uncommitted debt facilities of S$237.1 million and security deposits of 3 months available to tap on
		Conserve cash flow by postponing non-essential capex
		Reduce general and administrative expenses  
		Click here for full results presentation. 
		 
	


       Sasseur REIT 
 


Intensive marketing efforts, online engagements and organised events have helped generate and retain customer interest, thereby mitigating the COVID-19 impact
	As China was among the first few countries to recover and restart its economy from April 2020, Sasseur REIT is in a position to recover its performance from 2Q 2020 onwards
	Since the retail outlet industry is counter-cyclical, it continues to be more resilient against economic downturns
	The REIT will continue to maintain customer engagement and increase sales through its online and social media platforms, as well as at its malls through multiple promotional events in coming months
	The recent relaxation of the gearing limit for SGX-listed REITs – from 45% to 50% – provides Sasseur REIT with higher debt headroom and capital management flexibility to pursue growth through yield-accretive acquisitions
	Click here for full results release.

	 

	Dasin Retail Trust 
	 
	
	China’s government has been swift in introducing monetary and fiscal policies in response to the COVID-19 outbreak
	Uncertainties are expected in the short term, and the business environment remains challenging
	The Trust remains optimistic about its 2H 2020 performance; will continue to observe the situation closely and prepare for short-term challenges
	Its existing lease structures are highly resistant; will seek to optimise the tenant mix and foster amicable relationship with tenants
	Experienced ground staff who are knowledgeable and sensitive to retail trends are leveraging on O2O platforms to meet changing consumer demands
	Healthy financial position and strong operational capabilities
	Implemented strict cost controls and risk management strategies
	Update on proposed Acquisition of Shunde Metro Mall and Tanbei Metro Mall:
	
Due to COVID-19, the proposed private placement of up to 120 million new units in the Trust to fund the acquisition has been delayed
		With the recent strengthening of RMB vs SGD and decrease in the market price of units in the Trust, the number of new units to be issued in the private placement would likely exceed the 120 million new units approved at the EGM
		In this case, the Trustee-Manager will rely on the general unit issue mandate obtained from unitholders at the 18 April 2019 AGM to issue any additional units
		 
		Click here for full results presentation.
		
	





CRCT, Sasseur REIT & Dasin Retail Trust Report March Quarter Results