| MAYBANK KIM ENG |
UOB KAYHIAN |
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Manulife US REIT (MUST SP) US Asset Tour Highlights
Site visits to four US properties Our visits to MUST’s properties in Atlanta and New Jersey, and meetings with US-based property brokers reaffirm our positive view on its DPU growth profile. We see clear strengths in its well-placed assets and solid lease management and AEI know-how. We continue to favour MUST for its DPU visibility supported by stable income growth and low leasing risks. We have kept forecasts and DDM-based TP intact at USD1.00 (COE: 7.7%, LTG: 2.0%). MUST’s valuation remains compelling with DPU yields of 6.9- 7.2% FY19-20E vs 4.6-5.7% offered by its office S-REIT peers. Post its Centerpointe deal, low 36.8% gearing should support acquisition growth opportunities and DPU upside. BUY.
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Office REITs Tight Vacancies Pushing Office Rents Higher
The office market bottomed in 1H17 and has progressed to the second year of recovery. Continued upside for office rents is supported by tapering of supply. Supply has eased to 1.3m sf this year, of which only 228,958sf is within the core CBD. Net absorption of office space is driven by modern services, technology companies, including start-ups and fintechs, and co-working operators. Maintain OVERWEIGHT. Our top-pick is CCT, followed by KREIT.
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| PHILLIP SECURITIES | RHB |
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Clearbridge Health Limited Ramping up SINGAPORE | HEALTHCARE | 1Q19 RESULTS
1Q19 revenue/PATMI made up 7.4%/0.3% of our full-year estimates. Healthcare system revenue surged 892% YoY to S$1.3mn. Medical clinics and centres revenue grew 267% YoY to S$0.9mn. We expect higher revenue contribution from the new acquisitions and business expansions to kick in from 2Q19 onwards to reach our FY19e earnings estimates. Maintain Buy with an unchanged TP of S$0.28.
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Dairy Farm (DFI SP) Wait For Bargain Sales; Reduce To NEUTRAL
Downgrade to NEUTRAL from Buy as share price edges closer to our USD8.25 TP, implying 3% upside and 2.8% dividend yield. In view of the escalating uncertainties brought forth by the ongoing US-China trade war, and that the share price has rebounded from the low of USD7.34 in March this year, we think the stock is now fairly valued, and downgrade to Neutral.
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Check out our compilation of Target Prices
