Keppel DC REIT: Gets a boost from surprise acquisitions
- Trending Sector: Singapore Residential: An insight into Singapore’s property investment game
- Keppel DC REIT (KDCREIT SP): Upgrade to BUY on surprise acquisitions (BUY)
- Q & M Dental Group (QNM SP): Pandemic to Endemic Winner (BUY)
- iFAST Corporation (IFAST SP): Shining star backed by exceptional growth (BUY)
- Raffles Medical (RFMD SP): Press on with tests and vaccination (BUY)
An insight into Singapore’s property investment game
• Pasir Ris 8 Condo sells like hot cakes: fear of missing out or inflation hedge?
• Meanwhile, subsale transactions inch towards three-year high; buyers turn investors as property prices climb
• If the “trend is your friend”, our analysis shows buyers would have made significant return on their equity
• Remain on close watch on potential cooling measures
Stocks to Watch
Keppel DC REIT: BUY (upgrade from HOLD)
Last Traded Price: S$2.56; Price Target (12-mth): S$3.00 (Prev S$2.80)
Upgrade to BUY on surprise acquisitions
• 1H21 DPU rose 12.5% y-o-y to 4.924 Scts - above projections
• Acquisition of Guangdong Data Centre at a NPI yield of c.9% is highly accretive
• ROFR granted for the remaining Bluesea Data Centres will reignite optimism on growth trajectory
• Upgrade to BUY with a higher TP of S$3.00
iFAST Corporation: BUY
Last Traded Price: S$9.18; Price Target (12-mth): S$12.10 (Prev S$10.55)
Shining star backed by exceptional growth
• 1H21 results broadly in line; higher DPS declared
• Fifth consecutive quarter of record AUA, benefitting from expanded range of products and services
• Growth in recurring revenue outpaced the non-recurring; strong growth in key Singapore market
Maintain BUY with higher TP of S$12.10
Q & M Dental Group: BUY
Last Traded Price: S$0.81; Price Target (12-mth): S$1.00 (Prev S$0.84)
Pandemic to Endemic Winner
• COVID-19 likely to become endemic, requiring vaccination, testing and surveillance
• Polymerase chain reaction (PCR) tests, the gold standard, unlikely to be replaced
• Continued border closures, especially to countries around the region, to boost core dental business
• Maintain BUY with higher TP of S$1.00
Raffles Medical: BUY
Last Traded Price: S$1.32; Price Target (12-mth): S$1.48 (Prev S$1.40)
Press on with tests and vaccination
• Strong 1H21 results with contributions from COVID-19 services and recovery getting closer to pre-COVID levels, above our estimates
• Healthcare services is 77% above pre-COVID, while hospital services is 16% below
• Expanded COVID-19-related services and treatment of severely ill foreign patients will lead recovery
• Maintain BUY; raised TP to S$1.48
SIA Engineering: HOLD
Last Traded Price: S$2.080; Price Target (12-mth): S$2.05 (Prev S$1.80)
Corporate actions the only upside
• Reports net profit of S$14.5m for 1QFY22, but without government grants, net loss of S$24.1m
• Tapering of wage subsidies and limit on further cost controls may weigh on extent of earnings recovery
• Possible acquisition of SR Technics Malaysia could be a upside catalyst, balance sheet remains supportive
• Maintain HOLD with higher TP of S$2.05
CSE Global: BUY
Last Traded Price: S$0.51; Price Target (12-mth): S$0.63
CSE secures new orders of S$104.4m
• CSE secured S$104.4m worth of new orders in 2Q21, -9.1% y-o-y and -1.7% q-o-q mainly due to weakness in its Energy segment
• The weakness in its Energy segment was due to delays in project awards, slower than expected recovery, and disruptions caused by COVID-19
• Total new orders formed 43.8% of our FY21F full year new order intake assumption, and we estimate CSE’s revenue in 2Q21 was S$123.3m
• Continued strong new order wins for its Infrastructure segment could lift EBIT margins
Mapletree North Asia Commercial Trust: BUY
Last Traded Price: S$1.03; Price Target (12-mth): S$1.20
1QFY22 business update
• 1QFY22 revenue and net property income rose 10.0% y-o-y and 14.3% y-o-y to S$103.0m and S$78.3m respectively
• The improved performance was due to lower rental reliefs granted and higher occupancies at IXINAL Monzen-nakacho Building
• Portfolio occupancy stood at 97.4%, an improvement of 0.4ppt from the previous quarter
• Gearing inched up 0.3ppt q-o-q to 41.8% at the end of the quarter
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