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Ascendas REIT Positioned to benefit from upswing SINGAPORE | REAL ESTATE (REIT) | FY18 RESULTS
Gross revenue and DPU in line with our forecast 7.880 cents DPU for 2H FY17/18 vs. 7.845 cents in 2H FY16/17 (+0.45% YoY) Portfolio remains stable in terms of valuation, occupancy and aggregate leverage Maintain Accumulate; higher target price of $2.91 (previously $2.89)
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ESR-REIT 1Q18: acquisition boost; scope for capital recycling
■ 1Q18 DPU of 0.847 Scts (-15.6% yoy) was below our and consensus expectations at 20% of our full-year forecast. ■ The negative variance came from a lower-than-expected NPI margin. ■ Assuming the new units were only entitled to distributable income from 28 Mar to 31 Mar, adjusted 1Q18 DPU was stable (+0.4% yoy). ■ While 2H18 could remain soft due to MTB conversion of 16 Tai Seng, the acquisitions in 2017 and effective capital recycling could help to mitigate some of the weakness. ■ Valuations remain constructive, with the REIT trading at 7% FY18F yield and 0.9x current P/BV. A successful merger with VIT could catalyse the stock. Maintain Add.
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Singapore Property Zeroing in on Oxley Group
• Oxley has one of the largest residential landbanks in Singapore valued at over S$3.0bn • Strong pre-sales locally or overseas should translate to higher share price • Potential asset sales would greatly improve Oxley’s financials
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UG Healthcare Corp Riding On Global Demand Growth
We are positive on the long term global demand growth for gloves – demand has been rising at a 5.7% CAGR over the past 12 years. Our expectations of an appreciating USD vs MYR would also indicate an improved earnings outlook for glove manufacturers. UG Healthcare is increasing its annual production capacity by 21% YoY to 2.9bn units by Jun 2018, which would contribute to higher FY19F revenue and earnings. We initiate with a BUY recommendation, and TP of SGD0.32 (60% upside), which is 14x FY19F EPS, a discount to the peer average of 25x.
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Check out our compilation of Target Prices
