ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.</li>
<li>The first week of the year saw Insights on <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> which took a stake in <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a> plus <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent</a> reduced its stake. </li>
<li>In Thailand, <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> wrote on debt collector <a href="https://www.smartkarma.com/entities/jmt-network-services-pcl" target="_blank" data-smartkarma-citation="entities:8581:1" rel="noopener">JMT Network Services (JMT TB)</a> with a number of results pre-views including on Thai banks and <a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" data-smartkarma-citation="entities:2589:1" rel="noopener">Siam Cement (SCC TB)</a>. </li>
</ul>


The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The first week of the year saw Insights on Bukalapak (BUKA IJ) which took a stake in Allo Bank Indonesia plus Sea Ltd (SE US) as Tencent reduced its stake. 
In Thailand, Daniel Tabbush wrote on debt collector JMT Network Services (JMT TB) with a number of results pre-views including on Thai banks and Siam Cement (SCC TB). 


The Week That Was in ASEAN@Smartkarma - Bukalapak's Bank, Thailand Debt Restructurer, and Sea Ltd

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2>SREITs results in a glance (see detailed spreadsheet and calendar attached)<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/629/original/image_32975221321635260585172.png?1635260588" class="editor-image img-responsive" data-smartkarma-image-id="237629"></figure><h3><a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192" rel="noopener">Keppel REIT (KREIT SP)</a> 3Q21 Business Updates – Robust growth from acquisitions, healthy occupancy and collections</h3><ul><li>9M21 revenue and NPI increased by 34.8% and 36.8% YoY to S$162.2m (74.8% of BB est.) and S$129.4m (75.0% of BB est.), respectively. 9M21 DI was up 20.8% YoY to S$159.9m (83.3% of BB est.), mainly due to contributions from Victoria Police Centre, Pinnacle Office Park and Keppel Bay Tower. The increase in DI was partially offset by the impact of the divestment of 275 George Street in Jul21</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Keppel REIT (KREIT SP) 3Q21 Business Updates – Robust growth from acquisitions, healthy occupancy and collections9M21 revenue and NPI increased by 34.8% and 36.8% YoY to S$162.2m (74.8% of BB est.) and S$129.4m (75.0% of BB est.), respectively. 9M21 DI was up 20.8% YoY to S$159.9m (83.3% of BB est.), mainly due to contributions from Victoria Police Centre, Pinnacle Office Park and Keppel Bay Tower. The increase in DI was partially offset by the impact of the divestment of 275 George Street in Jul21

<h2>Singapore</h2>
<h3>
<a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934" rel="noopener">ESR-REIT (EREIT SP)</a> and <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937" rel="noopener">ARA LOGOS (ALLT SP)</a> proposed merger to form ESR-LOGOS REIT; DPU accretive for both unitholders</h3>
<ul>
<li>The proposed merger will be effected by way of a Trust Scheme with EREIT acquiring all units of ALLT in exchange for a combination of cash and new units in EREIT. The merger is conditional upon, inter alia, the completion of ESR Cayman (“ESR” or the “Sponsor”) and ARA Asset Management’s merger. ALLT unitholders will receive a scheme consideration of S$0.95 for each ALLT unit comprising 1) the payment of S$0.095 in cash per ALLT unit and the allotment and issue of 1.6765 new EREIT units for each ALLT unit, issued at S$0.51. The total consideration for the proposed merger is ~S$1.4bn based on the Scheme Consideration of S$0.95 for each ALLT unit. Upon completion, the enlarged REIT will be renamed ESR-LOGOS REIT (E-LOG)</li>
<li>Post-merger, E-LOG will continue to be managed by EREIT manager. The shareholding structure of E-LOG will be: Summit Group (12.7%), ESR (10.9%), and public (76.4%). The merger also removes any potential overlapping mandate between EREIT and ALLT</li>
<li>From EREIT’s perspective, the merger is expected to be +5.8% DPU accretive on FY20 proforma basis and -6.4% NAV dilutive. From ALLT perspective, the merger is +8.2% DPU accretive on FY20 proforma basis and +2.2% NAV accretive as well</li>
<li>The effects of the merger: 1) Total assets will rise to 87 properties (S$5.4bn) with 2.2m sqft NLA and 437 tenants; 2) ~66% of portfolio exposure is in the new economy (logistics and hi-tech); 3) Rising occupancy to 94.5% (from 91.7%); 4) Increased WALE to 3.2yrs (from 2.8yrs); 5) Extend land lease expiry to 37.9yrs (from 31yrs); 6) lower cost of debt to 2.84% (from 3.24%) with longer WADE; and 7) +1.6x larger debt headroom</li>
<li>Unitholders’ approval for EREIT is required for both merger and issuance of units (&gt;50% of total number votes), while approval for ALLT are required for the scheme (&gt;50% in numbers, &gt;75% in value) and amendment of deed (&gt;=75%). Ivanhoe Cambridge Asia (holder of 8.74% of ALLT) has given an irrevocable undertaking to vote in favour of all resolutions</li>
<li>EREIT is trading at 1.17x P/B and 6.7% FY21E yield, while ALLT is trading at 1.39x P/B and 5.5% FY21E yield</li>
<li>The financing scheme and timeline is detailed on table below (illustrative purpose).</li>
</ul>

Singapore

ESR-REIT (EREIT SP) and ARA LOGOS (ALLT SP) proposed merger to form ESR-LOGOS REIT; DPU accretive for both unitholders

The proposed merger will be effected by way of a Trust Scheme with EREIT acquiring all units of ALLT in exchange for a combination of cash and new units in EREIT. The merger is conditional upon, inter alia, the completion of ESR Cayman (“ESR” or the “Sponsor”) and ARA Asset Management’s merger. ALLT unitholders will receive a scheme consideration of S$0.95 for each ALLT unit comprising 1) the payment of S$0.095 in cash per ALLT unit and the allotment and issue of 1.6765 new EREIT units for each ALLT unit, issued at S$0.51. The total consideration for the proposed merger is ~S$1.4bn based on the Scheme Consideration of S$0.95 for each ALLT unit. Upon completion, the enlarged REIT will be renamed ESR-LOGOS REIT (E-LOG)
Post-merger, E-LOG will continue to be managed by EREIT manager. The shareholding structure of E-LOG will be: Summit Group (12.7%), ESR (10.9%), and public (76.4%). The merger also removes any potential overlapping mandate between EREIT and ALLT
From EREIT’s perspective, the merger is expected to be +5.8% DPU accretive on FY20 proforma basis and -6.4% NAV dilutive. From ALLT perspective, the merger is +8.2% DPU accretive on FY20 proforma basis and +2.2% NAV accretive as well
The effects of the merger: 1) Total assets will rise to 87 properties (S$5.4bn) with 2.2m sqft NLA and 437 tenants; 2) ~66% of portfolio exposure is in the new economy (logistics and hi-tech); 3) Rising occupancy to 94.5% (from 91.7%); 4) Increased WALE to 3.2yrs (from 2.8yrs); 5) Extend land lease expiry to 37.9yrs (from 31yrs); 6) lower cost of debt to 2.84% (from 3.24%) with longer WADE; and 7) +1.6x larger debt headroom
Unitholders’ approval for EREIT is required for both merger and issuance of units (&gt;50% of total number votes), while approval for ALLT are required for the scheme (&gt;50% in numbers, &gt;75% in value) and amendment of deed (&gt;=75%). Ivanhoe Cambridge Asia (holder of 8.74% of ALLT) has given an irrevocable undertaking to vote in favour of all resolutions
EREIT is trading at 1.17x P/B and 6.7% FY21E yield, while ALLT is trading at 1.39x P/B and 5.5% FY21E yield
The financing scheme and timeline is detailed on table below (illustrative purpose).


<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 221.25px;"> </td><td style="width: 170.797px;">SUN</td><td style="width: 166.969px;">ALLT</td><td style="width: 166.984px;">SSREIT</td></tr><tr><td style="width: 221.25px;">Period</td><td style="width: 170.797px;">1H21</td><td style="width: 166.969px;">2Q21</td><td style="width: 166.984px;">1H21</td></tr><tr><td style="width: 221.25px;">Gross Revenue (S$ m)</td><td style="width: 170.797px;">166.8 (+11.6% YoY)</td><td style="width: 166.969px;">35.4 (+22.1% YoY)</td><td style="width: 166.984px;">39.1 (+14.1% YoY)</td></tr><tr><td style="width: 221.25px;">NPI (S$ m)</td><td style="width: 170.797px;">112.6 (+23.9% YoY)</td><td style="width: 166.969px;">30.5 (+39.2% YoY)</td><td style="width: 166.984px;">25.7 (+23.2% YoY)</td></tr><tr><td style="width: 221.25px;">DPU (S$ c)</td><td style="width: 170.797px;">4.154 (+26.1% YoY)</td><td style="width: 166.969px;">1.217 (-8.2% YoY)</td><td style="width: 166.984px;">1.48 (+214.9% YoY)</td></tr><tr><td style="width: 221.25px;">NAV per Unit (S$)</td><td style="width: 170.797px;">2.062</td><td style="width: 166.969px;">0.67</td><td style="width: 166.984px;">0.52</td></tr><tr><td style="width: 221.25px;">P/B (x)</td><td style="width: 170.797px;">0.71</td><td style="width: 166.969px;">1.30</td><td style="width: 166.984px;">0.82</td></tr><tr><td style="width: 221.25px;">Occupancy (%)</td><td style="width: 170.797px;">2Q21:93.8 (SG Retail)92.1 (SG Office)93.9 (AU Office)100 (UK Office)</td><td style="width: 166.969px;">2Q21:98.2</td><td style="width: 166.984px;">1H21:83.4</td></tr><tr><td style="width: 221.25px;">Reversion (%)</td><td style="width: 170.797px;">2Q21:+2.1 (Suntec City Office)-7.2 (Suntec City Mall)</td><td style="width: 166.969px;">1H21:+2.4</td><td style="width: 166.984px;">1H21:+11.8</td></tr><tr><td style="width: 221.25px;">Gearing (%)</td><td style="width: 170.797px;">43.1</td><td style="width: 166.969px;">39.5</td><td style="width: 166.984px;">34.9</td></tr><tr><td style="width: 221.25px;">Cost of Debt (%)</td><td style="width: 170.797px;">2.41</td><td style="width: 166.969px;">2.92</td><td style="width: 166.984px;">3.4</td></tr><tr><td style="width: 221.25px;">1 Yr Fwd Yield (%)</td><td style="width: 170.797px;">5.85</td><td style="width: 166.969px;">5.98</td><td style="width: 166.984px;">6.74</td></tr><tr><td style="width: 221.25px;">Debt Hedged (%)</td><td style="width: 170.797px;">64</td><td style="width: 166.969px;">65.8</td><td style="width: 166.984px;">60.4</td></tr><tr><td style="width: 221.25px;">Target Price</td><td style="width: 170.797px;">N/A</td><td style="width: 166.969px;">N/A</td><td style="width: 166.984px;">N/A</td></tr><tr><td style="width: 221.25px;">Rating</td><td style="width: 170.797px;">N/A</td><td style="width: 166.969px;">N/A</td><td style="width: 166.984px;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) SUNALLTSSREITPeriod1H212Q211H21Gross Revenue (S$ m)166.8 (+11.6% YoY)35.4 (+22.1% YoY)39.1 (+14.1% YoY)NPI (S$ m)112.6 (+23.9% YoY)30.5 (+39.2% YoY)25.7 (+23.2% YoY)DPU (S$ c)4.154 (+26.1% YoY)1.217 (-8.2% YoY)1.48 (+214.9% YoY)NAV per Unit (S$)2.0620.670.52P/B (x)0.711.300.82Occupancy (%)2Q21:93.8 (SG Retail)92.1 (SG Office)93.9 (AU Office)100 (UK Office)2Q21:98.21H21:83.4Reversion (%)2Q21:+2.1 (Suntec City Office)-7.2 (Suntec City Mall)1H21:+2.41H21:+11.8Gearing (%)43.139.534.9Cost of Debt (%)2.412.923.41 Yr Fwd Yield (%)5.855.986.74Debt Hedged (%)6465.860.4Target PriceN/AN/AN/ARatingN/AN/AN/A

ASEAN Builder's Scoop (22Jul21) - SUN Office Portfolio Offset Retail Weakness

Singapore Property Analyst

Anni Kum

<ul>
<li>
<a href="https://www.smartkarma.com/entities/16035" target="_blank" data-smartkarma-citation="entities:16035:1">Mapletree Logistics Trust (MLT SP)</a> to acquire five modern logistics properties in one swoop at S$778 million from CWT Pte. Limited (unit of HNA Group). </li>
<li>Sizeable Singapore acquisition after a 4-year hiatus by MLT likely signals the logistics sector's recovery. </li>
<li>Acquisition expected to be DPU-accretive at 6.2% initial yield with potential upside from built-in annual rental escalation on SLB terms with WALE of over 8 years.</li>
<li>Current gearing level of 38% already one of the highest amongst…</li>
</ul>



Mapletree Logistics Trust (MLT SP) to acquire five modern logistics properties in one swoop at S$778 million from CWT Pte. Limited (unit of HNA Group). 
Sizeable Singapore acquisition after a 4-year hiatus by MLT likely signals the logistics sector's recovery. 
Acquisition expected to be DPU-accretive at 6.2% initial yield with potential upside from built-in annual rental escalation on SLB terms with WALE of over 8 years.
Current gearing level of 38% already one of the highest amongst…


Singapore REIT Talk (2-7 Jul 2018): Mapletree Logistics Trust to Beef up SG Portfolio

Singapore

ARA LOGOS Logistics Trust is a real estate investment trust (REIT) that invests in quality income-producing industrial real estate used for logistics purposes, as well as real estate-related assets in the Asia Pacific. Its portfolio comprises logistics warehouse properties strategically located in established logistics clusters in Singapore and Australia. The company is headquartered in Singapore and was founded in 2010.

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ARA LOGOS Logistics (ALLT SP)

The Week That Was in ASEAN@Smartkarma - Bukalapak's Bank, Thailand Debt Restructurer, and Sea Ltd

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh

ASEAN Builder's Scoop (26Oct21)

KREIT healthy collections; KDCREIT boosted by acquisitions; MLT steady as she goes; CLCT record high NPI; ALLT EFR effect dilutes DPU; MEG raises...

SCCM Asia Research

ASEAN Builder's Scoop (15Oct21)

EREIT/ALLT merger, DPU accretive for both unitholders; AAREIT strong quarter, Upgrade to BUY; Porcelain Hotel on sale for S$90m; WCTHG mixed-use...

SCCM Asia Research

ASEAN Builder's Scoop (22Jul21) - SUN Office Portfolio Offset Retail Weakness

SUN office portfolio offset retail weakness; ALLT boosted by AUS acquisitions; SSREIT robust operational metrics; CIT extends tenant support; FILRT...

SCCM Asia Research

Singapore REIT Talk (2-7 Jul 2018): Mapletree Logistics Trust to Beef up SG Portfolio

Mapletree Logistics Trust (MLT SP) to acquire five modern logistics properties in one swoop at S$778 million from CWT Pte. Limited (unit of HNA...

Anni Kum

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