buysellhold july.23



CapitaLand Ascendas REIT

Rental reversions continue to stay strong


■ Portfolio occupancy slipped 0.9% qoq even as CLAR continues to see average +16.9% rental reversions in 1Q24.

■ CLAR has 9.3% of portfolio leases to be renewed for the rest of FY24F, mainly in Singapore, Australia and the US.

■ Reiterate Add rating, with an unchanged TP of S$3.06.



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AEM Holdings Ltd

Further order win from new customer


■ On 22 Apr 2024, AEM announced that a major fabless customer has selected its thermal engine as the Plan-of-Record for its advanced SLT insertions.

■ According to the press release, the deliveries will commence from FY24F onwards. No order value was disclosed.

■ This is a positive development for AEM. We reiterate Hold as we await better revenue visibility from late-FY24F into FY25F. 



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ComfortDelGro Corporation (CD SP)

Backed By Favourable Tailwinds


CD’s wholly-owned UK subsidiary has been awarded four new public bus contracts. We maintain our expectations that CD would post a strong 1Q24 driven by favourable tailwinds for both the public transport services and taxi segments. We also highlight several points from CD’s responses to shareholder questions. In view of improving fundamentals and a lush 5.5% dividend yield, we maintain BUY and a higher target price of S$1.72. CD remains one of our conviction picks for 1H24. 


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Malaysia Smelting Corporation (SMELT MK)

Tin Prices Soar: Supply Tightness To Drive Prices In 2024


MSC is poised for significant growth in 2024 as LME tin prices have soared 43% ytd, mainly due to ongoing supply constraints. Additionally, earnings are supported by enhanced production output and improved margins from its new eco-friendly plant. Based on our sensitivity analysis, every US$1,000/mt change in our tin price assumptions would affect earnings by 6%. Upgrade 2024/25/26 earnings by 16%/23%/22% respectively. Maintain BUY. Target price: RM3.60.



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Keppel REIT ($0.85, up 1 cent) announced it’s business and operational updates for 1Q24 and reported that it’s financial performance was driven by higher rentals from Ocean Financial Centre and contribution from 2 Blue Street, Keppel REIT’s property income increased 6.3% year-on-year to $61.3 million, while net property income grew 7.2% to $48.2 million in 1Q 2024. Notwithstanding the stronger operating performance, distributable income including anniversary distribution remained at $55.2 million due mainly to higher borrowing costs. As at 31 March 2024, Keppel REIT’s aggregate leverage was 39.4% with 74% of its borrowings on fixed rates. All-in interest rate was 3.18% per annum, with adjusted interest coverage ratio at 2.9 times. Weighted average term to maturity of borrowings was 2.3 years. Supported by its portfolio of green-certified properties, Keppel REIT’s sustainability-focused funding formed 63% of its total borrowings. 

Keppel REIT’s market cap stands at S$3.23bln and currently trades at 19x forward PE and 0.64x PB, with a dividend yield of 6.9%. The consensus target price stands at S$1.01, representing 19% upside from the current share price. KREIT’s operating metrics for 1Q24 continues to be strong and we believe valuations for KREIT are decent. As the REIT is a beneficiary of the expected interest rate cuts starting from 2H FY2024, we continue to maintain an “Accumulate” rating on Keppel REIT




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