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UOB KAYHIAN |
UOB KAYHIAN |
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Banking – Singapore 3Q24 Results Preview: Healthy Growth From Wealth Management, Trading Income And Strengthening Regional Currencies
OCBC should record stronger loan growth of +2.0% yoy than DBS’ +0.2% yoy in 3Q24. OCBC benefits from the appreciation of MYR (+8.2%), while DBS is affected by the depreciation of USD (-5.2%) and HKD (-4.8%). We see a slight erosion in NIM qoq, offset by resilient growth from wealth and trading income. We expect net profit of S$2,713m for DBS (+5% yoy, -3% qoq) and S$1,904m for OCBC (+5% yoy, -2% qoq). Upgrade to OVERWEIGHT. BUY OCBC (Target: S$19.40), followed by DBS (Target: S$42.70).
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Hong Kong Developers And Hong Kong Landlords Takeaways Of 2024 Hong Kong Policy Address
The Chief Executive delivered the 2024 Policy Address on 17 Oct 24. The government pledged to continue relaxing demand-side policies by expanding new CIES and raising LTV. On the supply front, the government reiterated its land supply plan, and expedite construction in the northern metropolitan area. Policy easing may positively impact the market in the near term. However, restoring confidence and further rate cuts are crucial. Maintain MARKET WEIGHT. SHKP and LINK REIT are our top picks.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Singapore REITs September quarter preview
Financing tailwinds, monitor operating stats We expect SREITs in our universe to report lower distributions YoY for the period ending Sep’24. However, repricing of floating-rate debt and strengthening of domestic currencies may result in sequential stabilization. Operating metrics were likely resilient, though we continue to monitor occupancy for industrial and retail, and reversions for offices. Hotels should benefit from seasonal strength despite challenging YoY comparisons. Maintain POSITIVE sector view; Our key picks are: CDLHT, CICT, CLAR, CLAS, FEHT, LREIT, MINT, MLT and OUEREIT.
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Public Bank (PBK MK) High ESG score
Strong corporate governance We have revisited Public Bank’s ESG disclosures and have assigned an ESG score of 73 (out of 100). This score is an improvement from 63 before and is now one of the highest among banks in our coverage. What stands out is the group’s strong corporate governance, as well as its prudent management. We look forward to the bank achieving its various sustainability targets. BUY and TP of MYR5.40 maintained, pegged to a CY25E P/BV target of 1.7x.
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| UOB KAYHIAN | MAYBANK KIM ENG |
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SP Setia (SPSB MK) Battersea Worries Fade: Industrial Strength Takes the Spotlight
SP Setia's 2025 outlook remains positive, driven by industrial land sales from Setia Alaman and the upcoming Tanjung Kupang Industrial Park, with potential net profits of RM350m from these projects. The leasing activity in the newly-completed office has improved (occupancy increased to 50%), reducing further concerns on Battersea. The launch of Atlas Melbourne has seen a strong start with >25% of units sold to date. Upgrade to BUY with a higher target price of RM1.95 (from RM1.64)
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CapitaLand Malaysia Trust (CLMT MK) East Coast Mall visit
Maintain BUY We visited CLMT’s East Coast Mall (ECM) in Kuantan, Pahang last week to get more insight into its operational performance. ECM has a net lettable area (NLA) of 467k sq. ft. while occupancy rate as at end-Jun 2024 was 99.3%. In 1H24, ECM contributed about 17% of CLMT’s total NPI. We gather that significant enhancement has been made following its acquisition back in 2011. We maintain our earnings forecasts for CLMT but raise our DDMTP by +3sen to MYR0.73. FY24/25E net DPU yield is attractive at 6.3%/6.4% (sector average: 5.4%/6.3%)
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