ANALYSTS SAY: Buy, Sell, Hold (21 Oct)

UOB KAYHIAN

CapitaLand Integrated Commercial Trust (CICT SP)

Retail Upside From Acquisition; Office Upside From Positive Reversion

Highlights

• The acquisition of Paragon was completed on 1 Jul 26 and will provide full six-month contribution in 2H26.

• The AEI for Tampines Mall was completed in 3Q26, and new brands Chanel, Dior, Paris Baguette, Sephora and Yves Saint Laurent will progressively commence their leases in 2H26. The AEIs for Capital Tower (3Q26-4Q27) and Plaza Singapura (3Q26-4Q28) are running concurrently with a phased approach to minimise disruptions.

• CICT backfilled pockets of vacant space in 6 Battery Road and Capital Tower. It is also working on larger spaces vacated by Allianz at CapitaSky (88,000sf) and Adidas at Funan (28,000sf). It is expected to maintain positive rental reversions as upcoming office expiries remain below prevailing market rents at S$11.42psf/month in 2H26 and S$11.87psf/month in 2027.

• Maintain BUY. Target price: S$3.06.

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Keppel REIT (KREIT SP)

Refocusing On Home Base Singapore

Highlights

• KREIT has agreed to acquire a 51% interest in Keppel South Central from its sponsor, Keppel Ltd, for S$626.2m, equivalent to S$2,350psf and 3-4% below independent valuations. The acquisition provides an initial net property yield of 4.3% and is accretive to DPU by 2%.

• Sponsor Keppel Ltd will provide a guaranteed monthly income of S$2.23m for a period of five years. The guaranteed amount is based on 95% stabilised occupancy, average rent of S$11.15psf and an operating margin of 79%.

• Maintain BUY with a higher target price of S$1.06.

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Alibaba Group (9988 HK)

2QFY27 Preview: Cloud Growth Accelerates; Losses Continue To Narrow

Highlights

• Alibaba will report its 2QFY27 results in late-November, with revenue guided to grow 9% yoy to Rmb270b, slightly below our estimates. Adjusted EBITA should reach Rmb29b, above our Rmb22b forecast, supported by improving cloud profitability and narrowing instant retail and AI Labs and Applications losses. Cloud revenue growth should exceed 50% yoy, with EBITA margin reaching 12%, driven by higher MaaS contribution and T-Head cost efficiencies.

• Maintain BUY with a higher target price of HK$189.00 (US$194.00).

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Keppel REIT

Proposed acquisition of 51% stake in
Keppel South Central

• Partial stake acquisition in Keppel South Central (KSC) property for
purchase consideration of SGD610.9m
• Income support in place as property is yet to be stabilised;
estimated pro forma FY25 distribution per unit (DPU) accretion of 2.0%
• Lower fair value estimate from SGD1.03 to SGD0.95 due to a higher risk-free rate assumption

Investment thesis
Keppel REIT (KREIT) was positioned as a pure-play office S-REIT listed on the Singapore Exchange with a portfolio of quality Grade A commercial assets in key business districts in pan-Asia. However, it recently acquired its maiden retail asset in Sydney, Australia, to diversify its portfolio.
Despite having a retail presence, the main focus of KREIT remains on prime office assets, as evidenced by the acquisition of an additional one-third interest in MBFC Tower 3. Consequently, KREIT has grown its assets under management (AUM) to approximately SGD11.8b across 14 assets
(as at 30 Jun 2026) in Singapore, key Australian cities of Sydney, Melbourne and Perth, Seoul, South Korea and Tokyo, Japan. KREIT’s management continues to strive to optimise its portfolio through strategic acquisitions and divestments to unlock higher yields for shareholders. It has an ongoing plan of paying out SGD100m of Anniversary Distributions out of its accumulated capital gains (SGD20m per annum) from FY23 through 1H27. Singapore’s core CBD Grade A office market continued its positive momentum, as rental growth in
2025 accelerated to 2.9% after a modest increase of 0.4% in 2024. We expect market rental growth in 2026 to remain positive in the mid-single digit range, due to low supply in the CBD and resilient demand.

We initiate a BUY rating on Far East Hospitality Trust (S$0.505, unchanged) with a target price of S$0.645, pegged to a 3.3% forward yield spread (5-year average). Among the various hospitality REITs, FEHT holds the greatest exposure by portfolio concentration to Singapore’s hospitality sector. Trading at just 0.6x P/B and 7.1% yield, with full contributions this year from its Japan hotel acquisition, FEHT remains an attractive counter to dive into at current levels.

Capitalized at S$1.1bln, FEHT trades at a 0.58x P/B with a dividend yield of 7.1%. Positives for FEHT include 1) Singapore footprint in a recovering tourism sector, 2) high minimum fixed rents, 3) lower financing costs to boost bottom-line, and 4) attractive yield at a discount to book. We have a BUY rating on FEHT with a 12-month target price of S$0.645, representing a potential upside of 27.7%.

Grand Bank Yatch

GBY’s market cap stands at S$138mln and currently trades at approximately 6.2x blended FY27/28F P/E, with a dividend yield of 2%. In view of the positive order book momentum and improving cash flow outlook, we maintain our BUY recommendation, with our TP of S$1.49 (based on blended 14.8x forward PE, 20% discount to listed yacht peers) currently under review pending the analyst briefing this Friday following its AGM.