| PHILLIP SECURITIES | UOB KAYHIAN |
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CapitaLand Limited Faster growth and re-rating
SINGAPORE | REAL ESTATE | UPDATE Proposed restructuring and demerger of investment-management business to allow unitholders to realise immediate upside from development business (at 0.95x BV offered), compared to CAPL’s 20-30% historical discounts to NAV. Implied consideration of S$4.102 is 24% premium to last traded price and 5-year VWAP. Comprises S$0.951 cash, one CLIM unit and 0.155 unit of CICT valued at S$2.823 and S$0.328 respectively. Maintain BUY. TP raised from S$3.75 to S$4.38. Our new TP is based on an 80% probability-weighted RNAV that the demerger will be approved and SOTP. Demerger valuations are calculated using the average of the two valuation methods in Figures 1-2
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Keppel REIT (KREIT SP) Steadier And Sturdier – The Sole Pure Play On Office
KREIT has enhanced its resiliency by reducing exposure to financial institutions, increasing exposure to sovereign tenants, lengthening its WALE and diversifying its asset mix towards the CBD fringe. It is the key beneficiary of recovery in the office market as the only pure play on office listed on the SGX. We raise 2022 DPU forecast by 2% after factoring in full-year contribution from Keppel Bay Tower. Maintain BUY. Target price: S$1.49.
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UOB KAYHIAN |
UOB KAYHIAN |
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Property-Related Market Laggards Enter Recovery Phase
Entering 2021, the year of the economy’s reopening, market laggards such as the property, construction and building materials sectors are poised for gradual recovery on the back of pent-up demand for properties, an effective vaccine rollout and low interest rates. Our top picks are SWB, KPG, CMS and HUME for their good growth prospects. To capitalise on a potential short-term rotational play, we have chosen SP Setia and Gabungan AQRS as opportunistic picks given their attractive valuations.
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Velesto Energy (VEB MK)
4Q20: Above Expectations On Better EBITDA Despite Impairment Hit 4Q20 core loss and EBITDA are both better than expected. Although the utilisation rate will be worse in 1H21 until a 2H21 turnaround, VEB surprised us with a lower profit breakeven as it decided to take a hit on a large impairment and accelerated depreciation. Loan repayments were also faster than expected. For these reasons, we upgrade our even though we still assume lower utilisation. Maintain HOLD with a higher target price of RM0.17 (Entry: RM0.15).
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Check out our compilation of Target Prices
