buysellhold july.23

PHILLIP SECURITIES

PHILLIP SECURITIES

Singapore Telecommunications Ltd

Accounting spring cleaning, sprinkled with cash

 

 Singtel announced exceptional non-cash impairment provisions of around S$3.1 bn in 2HFY24. As a result, Singtel will report a net loss in 2H24. Reasons for the impairment include higher interest rates, the rollout of NBN, weaker enterprise spending, and softer macro conditions.

 

 

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Far East Hospitality Trust

Higher RevPAR by ramping up occupancy

 

 Gross revenue for 1Q24 rose by 7.5% YoY to S$27mn on the back of leisure recovery, attributed to several mega concerts in 1Q24, accounting for 23% of our FY24e estimates. NPI increased by 6% YoY to $25mn due to stabilized electricity costs, which was within our expectations. DPU for 1Q24 was not disclosed.

 

 

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UOB KAYHIAN

UOB KAYHIAN 

CDL Hospitality Trusts (CDREIT SP)

1Q24: Positive Growth With Upward Momentum

 

CDREIT’s volume strategy generated growth in RevPAR of 16.6% yoy to S$205 for Singapore hotels in 1Q24, driven by a higher occupancy of 82.1%. Chinese tourists contributed and accounted for 18% of visitor arrivals to Singapore. 2Q24 is likely to be seasonally softer but the positive momentum is expected to pick up again in July. Residential build-to-rent project The Castings in the UK will start contributing in 2H24. Maintain BUY for 2024 with a distribution yield of 6.6%. Target price: S$1.48.

 

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Mapletree Logistics Trust (MLT SP)

4QFY24: Downside Limited By Higher Yield

 

MLT eked out positive rental reversions of 2.9% in 4QFY24 driven by Singapore (+11.1%), despite the drag from China (-10.0%). Portfolio occupancy was stable at 96.0% as of Mar 24. MLT’s properties in Tier 1 cities, such as Shanghai and Guangzhou, are well located and resilient. Properties in Tier 2 cities suffered negative rental reversion at low teens and the weakness is expected to persist. MLT provides FY25 distribution yield of 6.2% (FLT: 6.7%). Maintain BUY. Target price: S$1.89

 

 

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MAYBANK KIM ENG MAYBANK KIM ENG

CSE Global (CSE SP)

Solid 1Q growth + order wins

 

Proxy for electrification and data centres

CSE said it secured SGD186.2m of orders in 1Q24, 16.7% higher YoY and excluding the SGD49.2m data centre contract announced on 18 Apr, signalling a potentially much strong 2Q24 order intake. 1Q24, seasonally its weakest quarter, saw revenue rise 24% YoY to SGD197.5m, above our blended YoY projection of 17%. With better operating leverage due to strong revenue growth, as witnessed in FY23, we believe margins should continue to improve from 3.1% In FY23 to 3.5-4.0% in FY24E. This would justify our 26% core FY24E EPS growth. CSE remains one of our conviction picks and is a rare proxy for electrification/AI/data centres. Maintain BUY. 

 

 

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Mapletree Logistics Trust (MLT SP)

Rough patch continues

 

Declining distributions; focus on capital recycling MLT reported 4Q DPU of SGD2.211c, -1.9%QoQ/-2.5%YoY. FY DPU of 9.003c was -0.1% YoY. High interest costs, weak regional currencies and continued weakness in China operations was offset by otherwise stable operations and divestment gains. Notwithstanding pockets of weakness, portfolio valuation was broadly stable. Funding cost is expected to move higher. Focus is on accelerating divestments and achieving green certification. We lower our estimates and DDM-based TP by 24% and maintain HOLD rating.

 

 

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