CGS CIMB

Sembcorp Industries
Stronger for longer

■ With two-thirds of its conventional energy (CE) capacity locked in for 2-3 years since 2022, we expect CE’s net profits to remain high in FY23F.
■ YTD, spot prices in Singapore are still elevated at c.S$275/kwh vs. an average of S$259/kwh in 2H22 and S$291/kwh in FY21.
■ We lift our FY22-24F net profit forecasts by 3-11% on higher net profit contributions from CE. SCI is our country ESG top pick.
■ Reiterate Add with a higher TP of S$5.12 rolled forward to CY24F, still based on 12x P/E. Catalysts: earnings accretive M&As and higher dividends.

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Singapore Airlines
Cargo yield pressure may be accelerating

■ Reiterate Hold and unchanged TP of S$5.97 (mean CY23F P/BV of 0.9x).
■ While SIA’s passenger airline will likely see strong yields and demand into Mar 2023F, the cargo business is probably already seeing yield pressure.
■ The full-year effect of cargo weakness will likely be felt in FY24F; passenger profits could also come under pressure later this year as competition rises.

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CGS CIMB

Mapletree Industrial Trust
Robust Singapore operating performance

■ 3Q/9MFY23 DPU of 3.39/10.24 Scts is in line, at 24.6%/74.2% of our FY23F forecast.
■ Higher portfolio occupancy amid robust positive rental reversions.
■ Maintain Add rating with an unchanged TP of S$2.61. 

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Keppel REIT
Enjoying even stronger reversions

■ 2H/FY22 DPU of 2.95/5.92 Scts is in line, at 49.6%/99.6% of our FY22F forecast.
■ Strong rental reversion for Singapore office portfolio.
■ Maintain Add rating with an unchanged TP of S$1.14. 

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Frasers Centrepoint Trust
Reigniting the acquisition dream

■ Retail occupancy rose qoq from 97.5% to 98.4%; 1Q saw positive reversion.
■ Acquisition of 25.5% stake in NEX renews FCT’s inorganic growth prospects.
■ Reiterate Add. Suburban retail malls will remain resilient, in our view.

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Starhill Global REIT
Strong price performance capping upside

■ 1HFY6/23 DPU of 1.82 Scts (+2.2% yoy) came in at 45.8% of our FY23F, which we deem as in line. Portfolio occupancy was stable qoq at 97.1%.
■ Credit metric was healthy; adjusted ICR improved qoq from 3.2x to 3.6x while gearing was stable at 36.3%.
■ We raise our DDM-based TP from S$0.58 to S$0.62 on better retail and SG office outlook but downgrade to Hold on strong price performance.

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