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.

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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

<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><p>COMPANY RESULTS</p>
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<h2>Sasseur REIT (SASSR SP)</h2>
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<p><strong>3Q19: Benefitting From Strong Growth At Bishan, Hefei And Kunming Outlet Malls</strong></p>
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<p><strong>3Q19 DPU increased 6.4% yoy to 1.64 S cents and has outperformed its IPO prospectus forecast for the sixth consecutive quarter. Sasseur REIT benefitted from acquisition of shop units at the Hefei outlet mall, strong sales at Bishan, Hefei and Kunming outlet malls and successful anniversary sales in September. Sasseur provides exposure to growth in domestic consumption and middle-income households in China. 2020F distribution yield is attractive at 8%. Maintain BUY. Target price: S$0.97.</strong></p>
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<p>RESULTS</p>
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<li>Sasseur REIT reported a 3Q19 DPU of 1.64 S cents (+6.4% yoy), bringing 9M19 DPU to 4.904 S cents. The results were in line with expectations with 9M19 DPU representing 75.6% of our full-year forecast.</li>
<li><strong>Maintains growth momentum for outlet sales.</strong> Total outlet sales for the four malls in 3Q19 were Rmb1.2b, 9.4% higher yoy. Outlet sales growth was positive for all outlets with the exception of Chongqing due to inclement weather in the province during promotional sales events and its mature mall status. Total sales for 3Q19 was Rmb579.7m for Chongqing (-5.4% yoy), Rmb114.3m for Bishan (+18.6% yoy), Rmb286.4m for Hefei (+32.2% yoy) and Rmb238.0m for Kunming (+26.9% yoy).</li>
<li><strong>EMA rental income in line with forecast.</strong> In line with the overall positive sales growth, entrusted management agreement (EMA) rental income (excluding straight-line accounting adjustment) of S$30.6m was 5.2% higher yoy. Fixed component EMA value was Rmb99.8m (+4.3% yoy) in 3Q19, boosted by the acquisition of shop units at the Hefei outlet mall. The variable component value was Rmb56m (+11.8% yoy), benefitting from strong growth in sales at Bishan, Hefei And Kunming outlet malls. Sasseur also achieved successful anniversary sales in September.</li>
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<div><strong>Overall portfolio occupancy remained stable</strong> at 95.4% (-0.4ppt qoq), demonstrating the positive partnership model between the tenants and entrusted managers of each outlet mall. Occupancy for 3Q19 was at 100% for Chongqing (flat qoq), 91.9% for Bishan (-0.8ppt qoq), 95.0% for Hefei (+1.7ppt qoq) and 94.8% for Kunming (-3.1ppt qoq). Furthermore, total mall VIP members have surged by 69.8% on a ytd basis to 1.39m.</div>
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.COMPANY RESULTS


Sasseur REIT (SASSR SP)




3Q19: Benefitting From Strong Growth At Bishan, Hefei And Kunming Outlet Malls




3Q19 DPU increased 6.4% yoy to 1.64 S cents and has outperformed its IPO prospectus forecast for the sixth consecutive quarter. Sasseur REIT benefitted from acquisition of shop units at the Hefei outlet mall, strong sales at Bishan, Hefei and Kunming outlet malls and successful anniversary sales in September. Sasseur provides exposure to growth in domestic consumption and middle-income households in China. 2020F distribution yield is attractive at 8%. Maintain BUY. Target price: S$0.97.











RESULTS


Sasseur REIT reported a 3Q19 DPU of 1.64 S cents (+6.4% yoy), bringing 9M19 DPU to 4.904 S cents. The results were in line with expectations with 9M19 DPU representing 75.6% of our full-year forecast.
Maintains growth momentum for outlet sales. Total outlet sales for the four malls in 3Q19 were Rmb1.2b, 9.4% higher yoy. Outlet sales growth was positive for all outlets with the exception of Chongqing due to inclement weather in the province during promotional sales events and its mature mall status. Total sales for 3Q19 was Rmb579.7m for Chongqing (-5.4% yoy), Rmb114.3m for Bishan (+18.6% yoy), Rmb286.4m for Hefei (+32.2% yoy) and Rmb238.0m for Kunming (+26.9% yoy).
EMA rental income in line with forecast. In line with the overall positive sales growth, entrusted management agreement (EMA) rental income (excluding straight-line accounting adjustment) of S$30.6m was 5.2% higher yoy. Fixed component EMA value was Rmb99.8m (+4.3% yoy) in 3Q19, boosted by the acquisition of shop units at the Hefei outlet mall. The variable component value was Rmb56m (+11.8% yoy), benefitting from strong growth in sales at Bishan, Hefei And Kunming outlet malls. Sasseur also achieved successful anniversary sales in September.




Overall portfolio occupancy remained stable at 95.4% (-0.4ppt qoq), demonstrating the positive partnership model between the tenants and entrusted managers of each outlet mall. Occupancy for 3Q19 was at 100% for Chongqing (flat qoq), 91.9% for Bishan (-0.8ppt qoq), 95.0% for Hefei (+1.7ppt qoq) and 94.8% for Kunming (-3.1ppt qoq). Furthermore, total mall VIP members have surged by 69.8% on a ytd basis to 1.39m.









Non-SGX Report: Sasseur REIT (SASSR SP): 3Q19: Benefitting From Strong Growth At Bishan, Hefei And Kunming Outlet Malls