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SATS Ltd Cargo pulling its weight
■ Covid-19 pandemic precipitated a divergence between recovery of SATS’s cargo (by 1QFY21F) and passenger/inflight catering services (post-FY23F). ■ After three consecutive quarters of losses, we expect SATS to turn around in the upcoming 3QFY21F, with a profit of c.S$3.5m, backed by cargo and JSS. ■ Backed by minimal net gearing (4-5%), we expect SATS to accelerate in its M&A efforts. Upgrade from Hold to Add, with a higher TP of S$4.30.
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Elite Commercial REIT An asset in challenging times
■ FY20 results outperformed IPO forecasts with gross revenue/DPU in line with our expectations, at 100%/102% of our FY20F estimates respectively. ■ We expect footfall to DWP offices to increase as the Jobs Retention Scheme expires, exhibiting countercyclical traits and importance of ECR’s portfolio. ■ We reiterate our Add call with a higher DDM-based TP of £0.79.
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PHILLIP SECURITIES |
UOB KAYHIAN |
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Ascott Residence Trust New asset class to bolster growth SINGAPORE | REAL ESTATE (HOSPITALITY) | FY20 RESULTS
FY20 DPU of 3.03 Scts (-60.2%) came in below, at 75% of our forecast. Capital distribution from divestment gains formed 47.8% of DPU (FY19: 27.6%). 2H/FY20 RevPAU down 69%/61% YoY. FY20 gross profit -41% YoY with master leases/MCMGI/management contracts contributing 60%/6%/34%. Acquisition of purpose-built student accommodation in US to shore up revenue. Maintain BUY, DDM-based (COE 8.5%) TP raised from S$1.15 to S$1.22 as we roll forward our earnings forecast. We are forecasting FY21e/22e DPU yield of 4.2%/5.5%, with a 12.5% upside to our TP.
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First Resources (FR SP) Consistent Performer
Despite the drawback from the new Indonesia export levy, where FR would not enjoy as much of a gain from high prices as compared with its Malaysia peers, we still expect FR’s earnings to grow by 16% yoy in 2021 with higher ASP, better FFB production and stable downstream margin. Reiterate BUY on FR with the potential booster coming from rising earnings momentum. FR has consistently delivered good operational performance that meets expectations. Maintain BUY. Target: S$1.85.
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