RHB |
CGS CIMB |
Ascendas REIT (AREIT SP) Defensive But Unattractive Valuation Maintain NEUTRAL with a lower TP of SGD3.00 from SGD 3.10, 4% upside with c.6% yield. AREIT’s diversified portfolio of 200 industrial assets across three different geographies is expected to stay resilient despite recessionary outlook posed by the COVID-19 pandemic. Its key strengths are an experienced management team, a strong sponsor and good operational track record. While we like AREIT’s asset quality and management strategy, the current valuation of 1.3x 2020F P/BV is not attractive enough.
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Thai Beverage Dry in 2020; be back for drinks later
■ THBEV’s main markets have effected various levels of movement controls since Mar 20, with Thailand even imposing periodic alcohol bans in Apr. ■ Hence, we think more of THBEV’s divisions will likely be affected. We now expect FY9/20F core EPS to fall by 11.7% yoy. ■ YTD share price dip likely priced in some Covid-19 impact, but lack of nearterm catalysts leads us to downgrade it to a Hold, with a lower TP of S$0.70.
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MAYBANK KIM ENG |
UOB KAYHIAN |
Singapore REITs Webinar Session Highlights
Global REITs – two at 8-10% FY20 div yield We hosted a global REITs webinar session for investors jointly with SGX, and were joined by management teams from Sasseur REIT (SASSR SP) and EC World REIT (ECWREIT SP). The China-focused operations of both REITs have resumed after the earlier two-month lockdown, with their 2Q DPU recovery underway. Structural demand drivers are intact, led by recovery in consumption growth and stronger e-commerce demand. Valuations for many of the global small-cap REITs have pulled back in line with the market, and these two suggest DPU visibility at 8-10% yields. We remain selective given the challenging macro outlook, and continue to prefer industrial REITs, as they maintain growth during the current recessionary cycle from their longer WALEs, backed by rising overseas assets.
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REITs – Singapore S-REITs Weekly
The S-REITs rally continued, supported by the easing of leverage limit from 45% to 50%, which remains conservative and prudent. We put the spotlight on UHU, which provides an attractive distribution yield of 9.3% for 2020 and 9.6% for 2021. More than 70% of its base rental income is derived from tenants engaged in businesses deemed essential. It benefits from the gradual 3-phase lifting of the US’ lockdown.
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