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When one becomes two


• Proposed restructuring with new listco to hold its investment management platforms and lodging business

• Generally positive on proposed restructuring

• Implied consideration of SGD4.102 per share; premium of 23.9% to closing price prior to announcement Investment thesis CapitaLand’s competitive advantage is its significant asset base and extensive market network, which has been further boosted following the completion of the Ascendas-Singbridge merger. CapitaLand now has a core focus on Singapore, China, India and Vietnam. Coupled with extensive design, development and operational capabilities, CapitaLand develops and manages high-quality real estate products and services. It also has one of the largest investment management businesses in Asia with a total of six REITs and business trusts listed in Singapore and Malaysia. The Group has grown its real estate AUM to SGD132.5b, as at 31 Dec 2020. Although the Covid-19 pandemic has impacted CapitaLand’s operations, we believe its strong balance sheet and diversified portfolio puts it in a better position to drive a recovery ahead, while capital recycling activities are also expected to resume in a more meaningful way.



Plantation – Regional


Indian Palm Oil Imports To Increase By 12% yoy

In our latest online seminar, the CEO of Emami Agrotech, Sudhakar Desai, highlighted that he expected Indian edible oil imports to remain flat in 2020/21 with: a) higher domestic edible oil production, and b) higher edible oil prices killing demand. Having said that, Indian palm oil imports are expected to increase by 12% yoy mainly due to the shift from sunflower oil where the price has increased more than CPO prices. Maintain MARKET WEIGHT.



Ascendas REIT

Expanding European footprint



 S$960mn acquisition of 11 European data centres came four months earlier than anticipated, though below our S$1.5bn projection.

 Initial NPI yield of 6%, WALE of 4.6 years by GRI, portfolio occupancy of 97.9%. 58%/42% on triple net/colocation lease structures. 83% of leases have annual rental escalations of 1-3%.

 Acquisition deploys remaining 52.1% or S$612.5mn from S$1.2bn raised in November 2020, earmarked for this acquisition.

 Reiterate BUY. DDM TP (COE 6%) lowered from S$3.73 to S$3.64. We raise FY21e DPU by 0.3% to reflect sooner-than-expected acquisition but lower FY22-25e DPUs by 2.2-2.7% due to the smaller-than-projected portfolio size. AREIT remains our top pick in the sector for its scale and diversification.


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Restructuring for faster growth


■ CAPL proposes to consolidate investment management and lodging platforms and to privatise real estate development business.

■ Creating a leading global real estate investment manager and unlocking value through implied consideration.

■ Reiterate Add with a higher TP of S$4.04.


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LionelLim8.16Check out our compilation of Target Prices

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