| MAYBANK KIM ENG | PHILLIP SECURITIES |
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Mapletree Industrial Trust (MINT SP) Hi-Tech High
In line results, BUY We raise DPU forecasts for MINT by 0-1% following its 4Q/FY18. Results were in line, driven by higher hi-tech contribution, at 27.8% of NPI and 37.7% of its AUM at end-Mar 2018. With growth visibility from its completed Kallang AEI and full-year accretion from the Dec 2017 US data centre investment, we expect MINT to deliver 5.9% 3-year DPU CAGR, the strongest amongst its peers. Upside will be underpinned by its strong balance sheet, with SGD0.7-1.1b in debt headroom. Our new DDM-based TP is SGD2.25 (WACC: 7.2%, LTG: 1.5%) and we reiterate BUY.
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CapitaLand Commercial Trust Armed and equipped for interest rate hikes SINGAPORE | REAL ESTATE (REIT) | 1Q18 RESULTS
NPI and DPU within our estimates. Continued recovery in Grade A office rents, up 3.2% QoQ in 1Q18. Minimal lease expiries left for 2018 (5% by gross rental income, GRI). Fully refinanced debt due in 2018. Increase in funding costs our only major concern. Upgrade to Accumulate with increased TP of S$1.88 (from S$1.80).
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| CIMB SECURITIES | OCBC |
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Mapletree Commercial Trust Mixed results
■ FY3/18 DPU of 9.04 Scts, slightly ahead, making up 103.5% of our FY18F projections ■ Robust performance at VivoCity with positive rental reversion ■ Office rents should stabilise going forward, in our view ■ Maintain Add with an unchanged TP of S$1.75
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Frasers Centrepoint Trust: 2% YoY growth for 2QFY18 DPU
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| DBS VICKERS | CIMB |
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Sunningdale Tech Ltd Hit by forex volatility Downgrade to HOLD with lower TP of S$1.53 following a disappointing 1Q18.
In 1Q18, Sunningdale’s reported a 75% drop in profits to c.S$1.9m, mainly as the group was hit by 1) steeper-than-expected forex losses of c.S$5.2m, and 2) a dip in Consumer/IT sales. Taking a more conservative view on growth, we have lowered our sales and margin assumptions, resulting in a 33%/25% cut to FY18F/19F earnings projections. With forex risks potentially outweighing perceived benefits of diversification over the near term, we have also lowered our valuation peg for Sunningdale from 13x to local peers’ average of 11x, and arrive at a lower TP of S$1.53. We are also suspending coverage on the stock until a clearer re-rating catalyst emerges.
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Silverlake Axis Ltd Time for another look at renewed growth prospects
■ SILV is expanding its fintech capabilities to complement its primary core banking services via the earnings-accretive acquisition of three private entities. ■ Recovery in customers’ orders is within sight, in our view, with revenue recognition from delivery of contracts and recent order wins. ■ SILV enjoys recurrent income from the upkeep of banks’ core banking IT systems, which will continue for the long term in our view. ■ The stock trades at 16.0x CY19F core P/E, below its historical 6-year average of 20.7x, with 7% dividend yield in FY19F (based on our estimates). ■ Maintain Add with a lower DCF-based TP of S$0.58 (WACC: 10.1%) following a transfer of analyst coverage.
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