| UOB KAYHIAN | OCBC |
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Cityneon Holdings (CITN SP) Out With The Old And In With The New Since our last update, Cityneon’s major shareholder Star Media has entered into an agreement to dispose of their entire stake. Buoyed by a newer and more supportive investor base with more control lying with Cityneon’s CEO, we are more positive on the group’s prospects. Investors can continue to look toward explosive 2016-19 EPS growth with potential catalysts from new IP rights. Maintain BUY with a higher SOTPbased target price of S$1.28 (previously S$1.15).
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Starhill Global REIT: Near-term challenges likely priced in
Starhill Global REIT (SGREIT) recently divested its entire beneficial interests in the Harajuku Secondo Property for a cash consideration of JPY410.2m (~S$5.1m), which is at an attractive premium of 22.4% to the property’s latest independent valuation. Management has been seeking opportunities to streamline its portfolio and pare down its non-core assets. Looking ahead, we expect operational challenges to persist in the near-term, although we believe this would be mitigated by a higher rental uplift of 6.12% from Aug 2017 as a result of the next lease review with David Jones. We pare our FY17 and FY18 DPU forecasts by 2.4% and 1.5%, respectively, as we factor in lower rental assumptions in our model. However, we maintain our BUY rating on SGREIT, albeit with a slightly lower fair value estimate of S$0.81 (previously S$0.82). We believe its softer growth prospects have been priced in by the market, with the stock trading at blended FY17/FY18F distribution yield of 6.6% and P/B ratio of 0.8x. |
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CIMB |
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China Jinjiang Robust capacity growth ahead ■ CJE’s 1Q17 net profit was in line with our expectations. ■ Management said the construction of new waste-to-energy (WTE) projects is progressing well and the FY17-18F capacity addition targets are achievable. ■ New WTE projects in China likely to be added this year, according to management. ■ CJE expects the two Indian WTE projects to deliver a high IRR of over 15%. ■ We reiterate Add, and see new project additions as key catalysts.
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| MAYBANK KIM ENG | |
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AIMS AMP (AAREIT SP) Redeveloping Trust Initiate at BUY, fourth largest industrial REIT AAREIT ranks as Singapore’s fourth largest industrial REIT on AUM with its 27 warehouse, light industrial and business park assets, leveraged to recovering sector fundamentals, in our view. We see DPU support from master lease rental step-ups and rising contribution from a first build-tosuit project mitigating near-term industrial over-supply pressures, and estimate its under-utilised portfolio GFA profile adds further 5% growth optionality from asset rejuvenation initiatives. Initiate at BUY.
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