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UOB KAYHIAN |
UOB KAYHIAN |
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CapitaLand Integrated Commercial Trust (CICT SP) Increasing Dominance Of Singapore’s Retail Scene
ION Orchard is an iconic mall at the junction of Orchard Road and Scotts Road and is connected to Orchard MRT Station. Its estimated NPI yield of 5.0% compares favourably with recent transactions Nex (NPI yield: 4.8%), Changi City Point (4.3%) and Jurong Point (4.8%). The acquisition is accretive to DPU by 1.2%. We raise our 2025 DPU forecast by 6% due to contribution from ION Orchard, expansion in NPI margin and lower interest rates. Maintain BUY. Target price: S$2.59.
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Link REIT (823 HK) Takeaways From Pre-blackout Calls: Welcoming The Rate Cut Cycle
Management gave an update on the 1QFY25 performance. Despite weak consumption, its Hong Kong and major China portfolios registered a slightly positive rental reversion, beating guidance. Entering a rate cut cycle, LINK REIT has room to raise net gearing to no higher than 30%. We look forward to yield-accretive M&As in the near future. We lowered the risk-free rate and raised our target price by 5.5% to HK$45.08, representing a 2025 yield of 5.9% and yield spread of 2.1%. Maintain BUY.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Airports of Thailand (AOT TB) New master plan to support long-term growth
Solid earnings growth from rising tourist numbers We retain our BUY on AOT with a higher TP of THB75.0 as we roll forward our valuations to FY25E. We expect FY25E earnings growth of 22% YoY due to a solid recovery in inbound tourists. We estimate 41m arrivals in 2025 (+14% YoY). We see potential 5-6% upside to our FY26-27 core profit forecasts from the PSC for transit-transfer passengers and higher concession revenue from the addition of a new ground and cargo service provider (see our previous report). Key risks to our call include a slowdown in travel to Thailand and heavier than expected capex if new airports in Chiang Mai and Phuket are approved by Cabinet.
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Malaysia Banking Improved fundamentals from a stronger economy
POSITIVE maintained BNM’s 1H24 Financial Stability Review (FSR) highlights the improved fundamentals of the banking system amid more robust economic activity this year. Business credit risk is improving while household debt-to-GDP has moderated further to 83.8% end-June 2024 from 84.2% end-Dec 2023. We maintain a POSITIVE on the sector with BUYs on AMMB, CIMB, PBK, RHB, HLBK and HLFG.
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| UOB KAYHIAN | UOB KAYHIAN |
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Shipping And Ports – China Weakening Global Trade Environment With Upside Risks For Freight Rates
The latest economic indicators pointed to a weakening global trade outlook, with both China and global manufacturing PMIs standing at sub-50 levels, and their new export order sub-indices sinking deeper in the contractionary territory. Ocean freight rate futures prices have rebounded lately amid escalating tensions in the Middle East, and the US East Coast port strike, though halted for now, remains a key uncertainty. Maintain MARKET WEIGHT. BUY OOIL, CSP and CMP. CSH is downgraded to HOLD.
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Hospitality REITs – Singapore Greater Influx Of Chinese Tourists, Lower Supply Of Hotel Rooms
Visitor arrivals recovered 13% yoy in July and 17% yoy in August, boosted by the pick-up in volume of Chinese tourists. Growth is supported by large-scale MICE events, new tourism attractions and muted supply of hotel rooms. The sector trades at an attractive 2025 distribution yield of 6.1% and low P/NAV of 0.74x. Maintain OVERWEIGHT. BUY CLAS (Target: S$1.38) for expansion in longer-stay properties. BUY CDREIT (Target: S$1.50) as it benefits the most from lower interest rates.
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