UOB KAYHIAN

United Hampshire US REIT (UHU SP)
Building Scale Brick By Brick

The acquisition of Upland Square is in line with UHU’s focus to expand its portfolio of grocery-anchored and necessity-based retail properties along the Eastern Seaboard.
Upland Square’s key tenants include Ahold Delhaize, Burlington and TJ Maxx. The acquisition provides attractive NPI yield of 6.5% and is accretive to pro forma 2021 DPU by 2.1%. UHU provides compelling 2023 distribution yield of 10.3% and trades at a 19% discount to NAV per unit of US$0.75. Maintain BUY. Target price: US$0.91.

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Yinson (YNS MK)
1QFY23: Core Non-EPCIC Profits In Line

There were generally no surprises in Yinson’s non-EPCIC results, although the profits surged yoy with good cost control, we conservatively assume cost inflation impact in subsequent quarters that may hit the non-O&G business. Yinson’s execution remains solid for FPSO Marlim, and it should be able to repeat the same for FPSO PDB even if China’s lockdown re-emerges. FPSO bidbook is higher. Maintain BUY, with a diluted target price of RM3.05.

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CGS CIMB

CGS CIMB

Mindtree Ltd
FY22 annual report analysis

■ Sub-contractor expenses rose 88.3% yoy, accounting for 10.2% of revenue.
■ Higher receivables impacted cash flow (down 23% yoy) and OCF/EBITDA conversion (70% in FY22 vs. 120.5% in FY21).
■ 14.3% of employees are Microsoft stack experts.

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Airports of Thailand (AOT TB)
Recovery intact

AOT cuts passenger forecasts. Maintain BUY and TP
AOT cuts passenger forecasts by 1-27% for FY22E-FY24E (Fig 1). The cuts are mostly for international passengers, due to: 1) the Omicron resurgence in 2Q22 (1Q22 calendar year) that affected travel; and 2) later-than expected China re-opening, which now AOT expects in January 2023 (against late 2022 in their earlier assumption). We think both points are well-known, in the price and already in line with our assumptions of 9m tourist arrivals in FY22E, 22m in FY23E and 40m in FY24E. We thus maintain BUY and our TP of THB80. AOT is our Top Pick in the Thai tourism sector, as a prime beneficiary of the Thai tourism recovery, along with MINT (CP THB33.75, BUY, TP THB42.0) which benefits from the rapid recovery in Europe where 60% of its hotel income comes from. 

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Banks
Digital banks: Race to the top

■ First movers in the digital bank space will be at an advantage.
■ Raising capital will become more challenging so players with large war chests and/or strong backers will have the edge.
■ We believe investors will look at monthly asset and deposit trajectory rather than user acquisition.

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