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OCBC |
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Frasers Centrepoint Trust A visit to the northern malls
■ Our visits to Northpoint City and Causeway Point reaffirm our view that the malls should enjoy stronger traffic going forward due to several new developments. ■ Beyond AEIs, we believe the trust could be looking at acquiring Waterway Point given its low gearing of 29.3%. ■ Maintain Add with a higher target price of S$2.49 after factoring in stronger growth from the two malls in FY21-22F.
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SG Hospitality: Do not disturb 2Q18 results for the hospitality S-REITs under our coverage were all within expectation, albeit many on the lower end. 2Q DPU YoY growth came in at +0.0% for Ascott Residence Trust (ART), +2.9% for CDL Hospitality Trusts (CDLHT), +4.1% for Far East Hospitality Trust (FEHT), and -3.3% for OUE Hospitality Trust (OUEHT). 2Q RevPAR growth figures were generally disappointing. Going forward, we continue to expect 1) robust leisure demand, 2) soft corporate demand and 3) continued outperformance of Mid-Tier hotels locally. We push back our expectations of a strong RevPAR pick-up from 2H18 to 2019, and believe defensive names from other sub-sectors may outperform hospitality. For switch ideas, refer to our 31 July S-REITs report as well as yesterday’s S-REITs sector update. Within hospitality, FEHT remains our top pick given its 1) 100% SG-based portfolio, 2) the mid-tier positioning of its hotels and 3) the higher chance of operational outperformance given its relative underperformance prior to 2018. Maintain NEUTRAL on hospitality. |
| DBS VICKERS | RHB |
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Singapore Land Transport Commencement of Fare Review Exercise
• PTC to commence fare review; maximum allowable increase is 4.3% • Changes in fares likely to be implemented in Dec, as in previous years • ComfortDelGro (CD)’s taxi fleet increased m-o-m in July, the first in the last 19 months • Maintaining positive view on CD (BUY, TP: S$2.59) on gradual turnaround in its taxi operations
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Singapore Exchange Weak Jul-Aug SADV But ETF Trading a Positive
Maintain BUY with lower TP of SGD8.40 from SGD9, 13% upside, pegged to FY19F P/E of 23.4x. SADV in July and August was SGD1.09bn vs SGD1.26bn in FY18. We believe SADV will rise from the current low but see it appropriate to cut our FY19F SADV to SGD1.27bn from SGD1.39bn, resulting in a 4% cut to our FY19F net profit. SADV upside could come from more ETF trading. SGX’s strong balance sheet is also a major positive, in our view.
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Check out our compilation of Target Prices
