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PHILLIP SECURITIES |
PHILLIP SECURITIES |
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Frasers Centrepoint Trust 99.9% retail portfolio occupancy
▪ No financials were provided in this 3Q25 business update. The acquisition of Northpoint City South Wing was completed on 26 May 2025 and will start contributing from 2H25 onwards. ▪ Retail portfolio occupancy was at 99.9% (2Q25: 99.5%). 3Q25 shopper traffic and tenants’ sales saw healthy YoY growth at +2.1% and +4.4%, respectively (1H25: +1% and +3.3%). The average cost of debt continues to trend down, falling 10bps QoQ and 50bps YoY to 3.7%.
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Keppel DC REIT Yet another quarter of exceptional rental reversion
▪ 1H25 DPU of 5.133 Singapore cents (+12.8% YoY) was in line with our expectations, forming 51% of our FY25e estimates. The YoY increase was driven by the acquisitions of KDC SGP 7 & 8 and Tokyo DC 1, stronger contributions from contract renewals and escalations, and lower finance costs due to reduced interest rates and loan repayments. ▪ KDCREIT delivered another quarter of exceptionally strong positive rental reversions, achieving 51% for 1H25 (2Q25: c.58%). The bulk of the uplift stemmed from a major contract renewal at KDC SGP 4. There are no major contract renewals in 2H25, with just 2.6% of leases by GRI expiring. Gearing remains low at 30%, though it is expected to rise to c.35% with the planned debt drawdown to finance the land lease extensions for KDC SGP 7 and 8.
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PHILLIP SECURITIES |
LIM & TAN |
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Suntec REIT Robust SG rental reversion sustained
• 1H25 DPU rose 3.7% YoY to 3.155 cents, underpinned by S$6mn in finance cost savings. The result was in line with our expectations, accounting for 51% of our FY25e forecast. SUN achieved rental reversion rates of 10% for its Singapore office and 17.2% for the retail segment. • Overseas markets remain a drag, with occupancy rates declining in both the UK (-0.5ppts YoY) and Australia (-3.3ppts YoY), though they contribute only 30% of group income. NPI from Australia rose 14.6% YoY in SGD terms, driven by a one-off AU$10mn compensation at 177 Pacific Highway. However, the impact on the bottom line is minimal as most of the proceeds will be allocated to fund CAPEX.
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RafflesMedicalGroup ($1.05, up 2 cents) posted a revenue of S$378.4 million, and Profit After Tax of S$32.5 million, up 5% yoy. Profit after tax and minority interests (PATMI) rose to S$32.1 million, supported by stable operational performance across core segments. These changes reflect a 3.5% increase in revenue and a 4.8% improvement in PATMI year-on-year. While the Healthcare Services division recorded a modest 0.6% increase in revenue to S$142.2 million and reported a profit of S$24.9 million, the Group’s Hospital Services division remained strong and profitable, registering a revenue of S$174.0 million and profit of S$17.7 million. At $1.05, Raffles Medical is capitalized at $1.94bln and trades at forward and prospective PE of 28x and 25x respectively against net profit CAGR of around 10% over the next 2 years. Price to book is 1.9x while div yield is between 2%-3%. Consensus 1 year target price of $1.13 implies upside potential of 7-8%. While growth is steady and defensive, valuations are fair with limited upside. We maintain HOLD. |
| LIM & TAN | CGS CIMB |
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Singapore Post Limited ($0.63, up 0.5 cts) has been downgraded by S&P Global Ratings to ‘BBB-’ From ‘BBB’ As It Scales Down Operations; Outlook Stable. At 63 cents, market cap is $1.4bln, forward PE is 57x, price to book is 1.1x, and consensus 1 year target price is 70 cents. While excluding the one-time special dividend of 9 cents (goes ex-div on 30 July’25), normalized yield is 1%-2%, we note that the continuing disposals of non-core assets such as Famous Holdings as well as upcoming and potential disposals of postal assets and SingPost Centre could possibly indicate for more special dividends as the group slowly winds down its operations. We maintain HOLD, given the small upside to consensus target price of 70 cents/share, but attractive potential special distributions on non-core disposals.
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Frencken Group LtdRiding the outsourcing boost■ On Saturday, 26 Jul 25, we surveyed Kaki Bukit Avenue 5, where Frencken is set to build a plant. The location is well connected to major expressways.■ Frencken could report its 1H25F results in the week of 14 Aug 25. We expect 1H25 revenue of S$398m (+7% yoy) and net profit of c.S$19m (+6% yoy).■ Retain Add with a higher TP of S$1.91. Tariff-induced uncertainties are reflected in the share price while EMDP-driven demand will boost valuations.
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