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UOB KAYHIAN |
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Ascendas REIT (AREIT SP) Expanding Its Overseas Presence; NEUTRAL
Maintain NEUTRAL, TP raised to SGD3.00, from SGD2.90, 4% downside with c.5% yield. AREIT’s recent acquisition of an Australian suburban office, although it slightly increases the forex risks, is in-line with its diversification strategy of adding more freehold assets, with long WALE to provide income stability. Its valuation at 1.5x P/BV FY19 (Mar) looks rich, considering the challenging industrial market conditions in Singapore. We recommend investors to wait for a pullback
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Mapletree Industrial Trust (MINT SP) High Growth From Data Centres At A Reasonable Price
MINT persists in its rapid repositioning towards high-tech buildings and data centres. The acquisition of 13 data centres in North America (3 turnkey hyper-scale data centres and 10 powered shell data centres) through a 50:50 JV with its sponsor adds nine established tenants with a long WALE of 9.1 years. Three of the tenants are in the top10 list of US technology companies. We see value in MINT as an entry into high-growth data centres at a reasonable price. Maintain BUY. Target price: S$2.69.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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United Overseas Bank (UOB SP) Takeaways From Asian Gems Conference
UOB has lowered interest rates for fixed deposits (52% of total deposits) from 1.8% to 1.5% in 3Q19. While NIM could be resilient in Singapore, overall NIM could be dragged marginally lower due to lower policy interest rates in the region. UOB launched its mobile-only digital bank TMRW in Thailand in March. It targets 3m-5m digital customers in five markets over the next five years. The objective is to increase engagement with customers through more transactions, thereby creating a sticky relationship.
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Singapore Telcos Our survey says: Loyalty remains
Digging in. Maintain NEUTRAL Despite a proliferation of 12 wireless brands, our 154 respondent survey indicates churn risk and therefore the zeroing out of a subscriber’s revenue remains low for MNO incumbents such as Singtel and StarHub. We believe share prices are largely pricing in revenue erosion risk but the market is seeking signs of industry repair (e.g. MVNO closure, pricing power etc) for confidence in wireless valuations to return. Netlink and StarHub remain our key ideas for opposite reasons; one for stability and security and the other for recovery value from expected FY20E profit lows.
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Check out our compilation of Target Prices
