buysellhold july.23



Keppel Ltd

Growing fund management


■ KEP’s strategy of de-risking real estate residential projects is progressing with the divestment of residential projects in Wuxi for S$161m.

■ 1Q24 net profit was lower yoy due to MTM losses of S$54m from its c.2% stake in STM. Excluding this, the group’s core net profit was higher yoy.

■ KEP is gradually transforming its portfolio to grow fund management and recurring fee and operating income with a monetisation focus.

■ Share price catalyst: sizeable divestments. Maintain Add and TP of S$8.98


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Suntec REIT

Singapore underpins operational performance


■ 1Q24 DPU of 1.511 Scts below our estimate, at 23% of our FY24F forecast

■ Singapore assets continue to deliver positive rental reversions and healthy occupancy; this was partly offset by lower overseas contributions

■ Maintain Hold rating with a lower TP of S$1.22



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Hospitality segment continues to shine


■ 1Q24 gross revenue/NPI were in line at 26.8%/25.4% of our FY24F forecast.

■ Hospitality was the star performer, while the commercial segment continued to grow steadily.

■ Reiterate a Hold rating with a lower TP of S$0.30.

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Keppel (KEP SP)

Steady As She Goes


KEP gave an in-line 1Q24 business update with the highlight being the continued strong growth in its recurring earnings. Asset management fees rose 52% yoy in 1Q24 with strong performance across the infrastructure, connectivity and real estate segments. Upside in the near to medium term could come from the sale of rigs by Asset Co which had accumulated S$950m in cash as at end-23 and paid out S$71m in 1Q24. Maintain BUY. Target price: S$8.89.



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Frasers Centrepoint Trust (FCT SP)

1HFY24: Resilient Growth In Consumption At Suburban Malls


FCT’s suburban malls saw an influx of shopper traffic and tenant sales increased 4.3% yoy in 2QFY24, which exceeded pre-pandemic levels by 20%. Positive rental reversion picked up to 7.5% in 1HFY24 (FY23: 4.7%). NEX would be enhanced by: a) decanting existing car park space for conversion into 60,000sf of commercial space, and b) rightsizing the tenant mix to reduce the reliance on anchor tenants. FCT provides a defensive FY25 distribution yield of 5.5%. Maintain BUY. Target price: S$2.71.



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CapitaLand Ascott Trust

Occupancy to improve with ADRs stabilising


 No financials were provided in this business update. 1Q24 gross profit rose 15% YoY due to stronger operating performance and contributions from new properties. It was 7% higher YoY on a same-store basis.



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