|PHILLIP SECURITIES||PHILLIP SECURITIES|
Dasin Retail Trust
More AEIs to rejuvenate mall offering
SINGAPORE | REAL ESTATE (REIT) | 3Q20
Recovery in consumer spending and revenue continued. 8.1% of FY20 lease expiries left for renewal.
Termination of remaining 9-year 12,000sqm lease with department-store tenant reduces income visibility. But opportunity to recalibrate and enhance the mall’s offerings.
Upgrade to BUY from Accumulate. Catalysts expected from the population growth in the Greater Bay Area, potential acquisitions, and rental uplift post-AEI. DDM TP (cost of equity 8.12%) dips from S$0.91 to S$0.90 due to enlarged share base following fundraising.
Singapore Banking Monthly
Sentiment improved SINGAPORE | BANKING & FINANCE | UPDATE
November interest rates remained at their lowest since 2014. Loans shrank 2% YoY in October, reinforcing their weak outlook.
Capital-market SDAV/DDAV grew 35%/11% YoY in November.
Banks turned in soft 3Q20 results but reported greater asset-quality clarity. Improved credit outlook to pave the way for gradual earnings recovery.
MAS announced four successful applicants for digital-banking licences. We do not expect any impact on banks’ earnings until FY22 when the digital banks start to operate.
Maintain NEUTRAL. Downgrade OCBC and UOB to NEUTRAL from ACCUMULATE on the back of slow earnings recovery in a low-interest-rate environment while allowances normalise. Our pick for the sector is UOB (UOB SP, Neutral, TP: S$21.10), whose lower SPs and better credit outlook may provide a faster earnings recovery in FY21.
Singtel grabs digital banking licence
■ Grab-Singtel (60:40) consortium wins one of the DFB licences in Singapore.
■ Represents an expansion into a potentially profitable business in the long run, though we do not see major earnings impact for Singtel in FY21-24F.
■ Singtel’s share of the capital requirements are manageable. Its dividendpaying capacity remains intact.
Upside from upcoming Covid-19 vaccines
■ For these reasons, we cut our loss estimates and raise our TP to S$4.91 on P/BV of 0.94x (mean since 2011) against the end-FY22F adjusted BVPS.
■ Reiterate Add as the positive newsflow momentum is just beginning.
Check out our compilation of Target Prices