SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<figure>
      <img src='https://api2.sgx.com/sites/default/files/2021-09/Capture_5.PNG' alt='SREIT with 100%' />
    </figure>
    <div class='content-caption'>SREIT with 100%</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<p>Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious and watch for updates.<br><br>
Closer to home, there are four S-REITs which have their entire portfolio of assets in China – CapitaLand China Trust, Sasseur REIT, EC World REIT, and BHG Retail REIT.<br><br>
Together the four S-Reits have generated -0.9 per cent in average price returns over the past week, comparatively to the swings of Chinese property stocks.<br><br>
The Reits have averaged 8.0 per cent in total returns in the year-to-date, 6.1 per cent in average distribution yields, and an average gearing ratio of 34.1 per cent which is lower than the sector average of 37.4 per cent.</p>

<p>S-Reits have a regulated leverage limited of 50 per cent.</p>

<p>CapitaLand China Trust (CLCT) is the largest multi-asset China focused S-Reit with an expanded mandate from a pure retail Reit into a diversified portfolio of retail and business park assets since earlier this year.<br><br>
Its Sponsor is CapitaLand Investment Limited, a leading global real estate investment manager, which made its trading debut on the SGX last week.<br><br>
CLCT has a gearing ratio of 35.9 per cent and average term to maturity of 3.80 years, with the majority of the refinancing requirements in 2021 completed.</p>

<p>It has 78 per cent of its total term loans on fixed interest rates and has hedged approximately 55 per cent of its undistributed income to reduce foreign currency fluctuations.</p>

<p>Sasseur Reit operates four outlet malls located in Chongqing, Bishan, Hefei and Kunming and is Asia's first outlet mall Reit.</p>

<p>The Reit has a gearing ratio of 27.8 per cent which is the lowest across the S-Reits sector and sees this as providing ample debt headroom for potential acquisitions.</p>

<p>Sasseur Reit has an average debt to maturity of 1.7 years and an interest coverage ratio of 4.5 times as at June 30, 2021 which has improved from 4.0 times in Dec 31, 2020.</p>

<p>Its weighted average cost of debt reduced to 4.4 per cent per annum for H1 2021, from 5.3 per cent per annum in H1 2020.</p>

<p>EC World Reit has a diversified portfolio of assets used primarily for e-commerce, supply-chain management and logistics purposes in the e-commerce clusters of Hangzhou and Wuhan.</p>

<p>The Reit has a gearing ratio of 37.6 per cent, weighted average debt maturity of 1.13 years and interest coverage ratio of 2.86 times.</p>

<p>The Reit manager has expressed in its latest financial results that it will continue to actively explore and diversify sources of funding and hedging instruments to optimise its capital structure.</p>

<p>BHG Retail Reit has a diversified portfolio of six retail properties in Beijing, Chengdu, Hefei, Xining and Dalian. It has a gearing ratio of 34.9 per cent.</p>

<p>BHG Retail Reit has an average cost of debt at 3.7 per cent and interest coverage ratio of 2.6 times.</p>

<p>Over 80 per cent of its borrowings are denominated in Singapore dollars and US dollars and about 60 per cent of offshore loans are hedged via interest rate swaps. <br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/china-focused-s-reits-resilient-amid-onshore-property-focus"> </a><a href="https://www.businesstimes.com.sg/companies-markets/governance-and-transparency-scores-of-s-reits-hit-all-time-high">read</a><a href="https://www.businesstimes.com.sg/companies-markets/10-s-reits-yielding-long-term-annualised-returns"> </a>the original version.</em></strong></p>
</body></html>



      
    
    SREIT with 100%


Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious and watch for updates.  
Closer to home, there are four S-REITs which have their entire portfolio of assets in China – CapitaLand China Trust, Sasseur REIT, EC World REIT, and BHG Retail REIT.  
Together the four S-Reits have generated -0.9 per cent in average price returns over the past week, comparatively to the swings of Chinese property stocks.  
The Reits have averaged 8.0 per cent in total returns in the year-to-date, 6.1 per cent in average distribution yields, and an average gearing ratio of 34.1 per cent which is lower than the sector average of 37.4 per cent.

S-Reits have a regulated leverage limited of 50 per cent.

CapitaLand China Trust (CLCT) is the largest multi-asset China focused S-Reit with an expanded mandate from a pure retail Reit into a diversified portfolio of retail and business park assets since earlier this year.  
Its Sponsor is CapitaLand Investment Limited, a leading global real estate investment manager, which made its trading debut on the SGX last week.  
CLCT has a gearing ratio of 35.9 per cent and average term to maturity of 3.80 years, with the majority of the refinancing requirements in 2021 completed.

It has 78 per cent of its total term loans on fixed interest rates and has hedged approximately 55 per cent of its undistributed income to reduce foreign currency fluctuations.

Sasseur Reit operates four outlet malls located in Chongqing, Bishan, Hefei and Kunming and is Asia's first outlet mall Reit.

The Reit has a gearing ratio of 27.8 per cent which is the lowest across the S-Reits sector and sees this as providing ample debt headroom for potential acquisitions.

Sasseur Reit has an average debt to maturity of 1.7 years and an interest coverage ratio of 4.5 times as at June 30, 2021 which has improved from 4.0 times in Dec 31, 2020.

Its weighted average cost of debt reduced to 4.4 per cent per annum for H1 2021, from 5.3 per cent per annum in H1 2020.

EC World Reit has a diversified portfolio of assets used primarily for e-commerce, supply-chain management and logistics purposes in the e-commerce clusters of Hangzhou and Wuhan.

The Reit has a gearing ratio of 37.6 per cent, weighted average debt maturity of 1.13 years and interest coverage ratio of 2.86 times.

The Reit manager has expressed in its latest financial results that it will continue to actively explore and diversify sources of funding and hedging instruments to optimise its capital structure.

BHG Retail Reit has a diversified portfolio of six retail properties in Beijing, Chengdu, Hefei, Xining and Dalian. It has a gearing ratio of 34.9 per cent.

BHG Retail Reit has an average cost of debt at 3.7 per cent and interest coverage ratio of 2.6 times.

Over 80 per cent of its borrowings are denominated in Singapore dollars and US dollars and about 60 per cent of offshore loans are hedged via interest rate swaps.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - China focused S-Reits resilient amid onshore property focus

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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot</h3><ul><li>1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H20</li><li>1H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)</li><li>Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21</li><li>Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectively</li><li>Lodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management</li><li>1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and China</li><li>CAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.</li></ul>

SingaporeCapitaland (CAPL SP) 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H201H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectivelyLodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and ChinaCAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

<div><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;<em>SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></div>
<div></div>
<div>
<h2>BHG Retail REIT</h2>
<h3>Poised for renewed growth</h3>
<div>
<ul>
<li>Committed occupancy improved slightly to 93.0% from 92.9% as three portfolio assets recovered.</li>
<li>Gross revenue and net property income increased 23.5% and 24.8% YoY respectively. This lifted 1H21 DPU by 33% to 1.12 Scts.</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/303/original/image_410495429131635863150935.png?1635863159" class="editor-image img-responsive" data-smartkarma-image-id="239303"></figure>
<div>
<div>
<div></div>
</div>
<div>
<p><strong>The Positives</strong><br><strong>+ Committed occupancy recovered slightly to 93.0% from 92.9% in 1H20.</strong><span style="font-size: var(--content-font-size);"> Occupancy recovered in three malls: Beijing Wanliu, Chengdu Konggang, and Hefei Changjiangxilu. Occupancy remained full at two malls: Xining Huayuan and Dalian Jinsanjiao.</span></p>
<div>
<p><strong>+ Increase in gross revenue and net property income.</strong> The recovery in its gross revenue and property income was underpinned by healthy occupancy and an uptick in new leasing demand. No rental rebates were given in 1H21. Rents for new and renewed leases continued to recover.</p>
<p><strong>+ Increase in DPU.</strong> With higher distributable income, DPU without waiver increased 33% to 1.12 Scts. The amount of distributions waived for its strategic investor units in 1H20 amounted to S$1.2mn, and the last distribution waiver was in 2H20. With the end of its sponsor’s distribution waiver, more units are entitled to distribution.</p>
<p><strong>The Negative</strong><br>- Nil.</p>
<p><strong>Outlook</strong><br><strong>China’s GDP grew 12.7% YoY in 1H21. Retail sales of consumer goods recovered in tandem, by 23.0% YoY to RMB21.2tn.</strong> Urban residents’ disposable income per capita improved 12.6% YoY.</p>
<p><strong>Coupled with recovering committed occupancy and continued AEI, BHG REIT appears poised for renewed growth.</strong> Gearing remained healthy at 34.9%, providing comfortable debt headroom to pursue M&amp;A growth opportunities.</p>
</div>
</div>
</div>
</div>
</div>

Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.


BHG Retail REIT
Poised for renewed growth


Committed occupancy improved slightly to 93.0% from 92.9% as three portfolio assets recovered.
Gross revenue and net property income increased 23.5% and 24.8% YoY respectively. This lifted 1H21 DPU by 33% to 1.12 Scts.







The Positives + Committed occupancy recovered slightly to 93.0% from 92.9% in 1H20. Occupancy recovered in three malls: Beijing Wanliu, Chengdu Konggang, and Hefei Changjiangxilu. Occupancy remained full at two malls: Xining Huayuan and Dalian Jinsanjiao.

+ Increase in gross revenue and net property income. The recovery in its gross revenue and property income was underpinned by healthy occupancy and an uptick in new leasing demand. No rental rebates were given in 1H21. Rents for new and renewed leases continued to recover.
+ Increase in DPU. With higher distributable income, DPU without waiver increased 33% to 1.12 Scts. The amount of distributions waived for its strategic investor units in 1H20 amounted to S$1.2mn, and the last distribution waiver was in 2H20. With the end of its sponsor’s distribution waiver, more units are entitled to distribution.
The Negative - Nil.
Outlook China’s GDP grew 12.7% YoY in 1H21. Retail sales of consumer goods recovered in tandem, by 23.0% YoY to RMB21.2tn. Urban residents’ disposable income per capita improved 12.6% YoY.
Coupled with recovering committed occupancy and continued AEI, BHG REIT appears poised for renewed growth. Gearing remained healthy at 34.9%, providing comfortable debt headroom to pursue M&amp;A growth opportunities.






(Non-SGX Report) BHG Retail REIT: Poised for Renewed Growth

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
<div>
<div>
<div>
<div>
<p>Singapore Company Focus</p>
<h2>BHG Retail REIT</h2>
<div>
<div>
<div>
<div>
<h3>Good proxy for China’s retail recovery</h3>
<div>
<div>
<div>
<div>
<ul style="list-style-type: disc;">
<li>
<p>DPU to reverse 3-year declining trend with projected 34.4% y-o-y rise in FY21F DPU</p>
</li>
<li>
<p>Good potential for long-term high rental supported by strong disposable income growth in China</p>
</li>
<li>
<p>ROFR over 12 assets by the established Beijing Hualian Group, the owner of Beijing SKP Mall</p>
</li>
<li>
<p>Initiate with BUY and TP of S$0.60</p>
</li>
</ul>
<div>
<div>
<div>
<div>
<p><strong>Bottoming DPU heralds new phase of growth.</strong> FY20F DPU marked the bottom in BHG REIT’s 3-year declining DPU trend. Going forward, we believe DPU will grow steadily starting with a c.34% y-o-y bounce this year to an estimated 3.01 Scts. The recovery will be led by the end of rental rebates and a recovery from COVID-19 restrictions. FY22F DPU is projected to grow c.8% y-o-y to 3.25 Scts and rise steadily from hereon as there are no more distribution waiver units remaining.</p>
<p><strong>High growth potential with exposure to key cities.</strong> BHG REIT has exposure to three properties located in Hefei and Chengdu. Urban disposable income per capita grew by a 5-year CAGR of 8.5% and 7.9% in Hefei and Chengdu, compared to Beijing’s 7.2%. Correspondingly, retail spending in Hefei and Chengdu grew faster at a 5-year CAGR of 16.6% and 7.3% versus 5.7% in Beijing. Arguably, BHG REIT’s assets in Hefei and Chengdu may potentially enjoy higher rental growth even as its Beijing Wanliu mall provides a stable foundation.</p>
<p><strong>Established Sponsor with pipeline of assets for acquisition</strong>. BHG REIT has a right-of-first-refusal (ROFR) over 12 assets. The REIT’s pipeline of assets may expand beyond the ROFR, with previous proposed acquisitions outside the ROFR. Using the proposed acquisition of Badaling Outlets as a basis, we estimate that BHG REIT has an acquisition firepower of between c.S$300m and S$500m when combined with a rights issue.</p>
<p><strong>Valuation:</strong><br>Initiate with BUY and DCF-based TP of S$0.60 based on WACC of 8.0% and terminal growth rate of 2.5%. Our TP implies FY22F target yield of 5.4%.</p>
<p><strong>Key Risks to Our View:</strong><br>Surge in COVID-19 cases leading to restrictions in Beijing, Chengdu or Hefei and higher-than-expected shift in retail spending to online space.</p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>

Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




Singapore Company Focus
BHG Retail REIT




Good proxy for China’s retail recovery






DPU to reverse 3-year declining trend with projected 34.4% y-o-y rise in FY21F DPU


Good potential for long-term high rental supported by strong disposable income growth in China


ROFR over 12 assets by the established Beijing Hualian Group, the owner of Beijing SKP Mall


Initiate with BUY and TP of S$0.60






Bottoming DPU heralds new phase of growth. FY20F DPU marked the bottom in BHG REIT’s 3-year declining DPU trend. Going forward, we believe DPU will grow steadily starting with a c.34% y-o-y bounce this year to an estimated 3.01 Scts. The recovery will be led by the end of rental rebates and a recovery from COVID-19 restrictions. FY22F DPU is projected to grow c.8% y-o-y to 3.25 Scts and rise steadily from hereon as there are no more distribution waiver units remaining.
High growth potential with exposure to key cities. BHG REIT has exposure to three properties located in Hefei and Chengdu. Urban disposable income per capita grew by a 5-year CAGR of 8.5% and 7.9% in Hefei and Chengdu, compared to Beijing’s 7.2%. Correspondingly, retail spending in Hefei and Chengdu grew faster at a 5-year CAGR of 16.6% and 7.3% versus 5.7% in Beijing. Arguably, BHG REIT’s assets in Hefei and Chengdu may potentially enjoy higher rental growth even as its Beijing Wanliu mall provides a stable foundation.
Established Sponsor with pipeline of assets for acquisition. BHG REIT has a right-of-first-refusal (ROFR) over 12 assets. The REIT’s pipeline of assets may expand beyond the ROFR, with previous proposed acquisitions outside the ROFR. Using the proposed acquisition of Badaling Outlets as a basis, we estimate that BHG REIT has an acquisition firepower of between c.S$300m and S$500m when combined with a rights issue.
Valuation: Initiate with BUY and DCF-based TP of S$0.60 based on WACC of 8.0% and terminal growth rate of 2.5%. Our TP implies FY22F target yield of 5.4%.
Key Risks to Our View: Surge in COVID-19 cases leading to restrictions in Beijing, Chengdu or Hefei and higher-than-expected shift in retail spending to online space.

















(Non-SGX Report) BHG Retail REIT: Good Proxy for China’s Retail Recovery

<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: 162.6pt;"><p> </p></td><td style="width: 162.5pt;"><p>ECWREIT</p></td><td style="width: 162.5pt;"><p>SASSR</p></td><td style="width: 162.5pt;"><p>BHGREIT</p></td></tr><tr><td style="width: 162.6pt;"><p>Period</p></td><td style="width: 162.5pt;"><p>1Q21</p></td><td style="width: 162.5pt;"><p>1Q21</p></td><td style="width: 162.5pt;"><p>1Q21</p></td></tr><tr><td style="width: 162.6pt;"><p>Gross Revenue (S$ m)</p></td><td style="width: 162.5pt;"><p>30.8 (+30.9% YoY)</p></td><td style="width: 162.5pt;"><p>EMA Rental Income: 34.1 (+23.4% YoY)</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 162.6pt;"><p>NPI (S$ m)</p></td><td style="width: 162.5pt;"><p>27.7 (+30.9% YoY)</p></td><td style="width: 162.5pt;"><p>EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 162.6pt;"><p>DPU (S$ c)</p></td><td style="width: 162.5pt;"><p>1.53</p></td><td style="width: 162.5pt;"><p>1.759 (+31.9% YoY)</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 162.6pt;"><p>NAV per Unit (S$)</p></td><td style="width: 162.5pt;"><p>0.91</p></td><td style="width: 162.5pt;"><p>0.922</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 162.6pt;"><p>P/B (x)</p></td><td style="width: 162.5pt;"><p>0.81</p></td><td style="width: 162.5pt;"><p>1.00</p></td><td style="width: 162.5pt;"><p>0.64(Based on 4Q20 NAV)</p></td></tr><tr><td style="width: 162.6pt;"><p>Occupancy (%)</p></td><td style="width: 162.5pt;"><p> 99.1</p></td><td style="width: 162.5pt;"><p>93.5</p></td><td style="width: 162.5pt;"><p>92.1</p></td></tr><tr><td style="width: 162.6pt;"><p>Reversion (%)</p></td><td style="width: 162.5pt;"><p> NA</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 162.6pt;"><p>Gearing (%)</p></td><td style="width: 162.5pt;"><p>38.3</p></td><td style="width: 162.5pt;"><p>27.6</p></td><td style="width: 162.5pt;"><p>35.6</p></td></tr><tr><td style="width: 162.6pt;"><p>Cost of Debt (%)</p></td><td style="width: 162.5pt;"><p>4.1</p></td><td style="width: 162.5pt;"><p>3.3</p></td><td style="width: 162.5pt;"><p>3.8</p></td></tr><tr><td style="width: 162.6pt;"><p>1 Yr Fwd Yield (%)</p></td><td style="width: 162.5pt;"><p>7.76</p></td><td style="width: 162.5pt;"><p>7.46</p></td><td style="width: 162.5pt;"><p>NA</p></td></tr><tr><td style="width: 162.6pt;"><p>Debt Hedged (%)</p></td><td style="width: 162.5pt;"><p>100% of offshore facilities</p></td><td style="width: 162.5pt;"><p>Not Disclosed</p></td><td style="width: 162.5pt;"><p>60% of offshore loans</p></td></tr><tr><td style="width: 162.6pt;"><p>Target Price</p></td><td style="width: 162.5pt;"><p>Under Review</p></td><td style="width: 162.5pt;"><p>NA</p></td><td style="width: 162.5pt;"><p>NA</p></td></tr><tr><td style="width: 162.6pt;"><p>Rating</p></td><td style="width: 162.5pt;"><p>Under Review</p></td><td style="width: 162.5pt;"><p>NA</p></td><td style="width: 162.5pt;"><p>NA</p></td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> 1Q21 DPU +32.3% YoY; Robust growth but DI retention persist with retained DI snowballing to S$5.49m</h3><ul><li>Both revenue and NPI grew by 30.9% YoY in 1Q21 to S$30.8m (26.9% BB est.) and S$27.7m (28.1% BB est.), respectively, mainly due to absence of rental rebates in 1Q20 and strengthening of RMB. In RMB terms, gross revenue and NPI were 26.0% and 26.1% YoY higher, respectively</li><li>1Q21 DPU increased 32.3% YoY or 7.4% QoQ to S$1.532c (26.9% BB est.), mainly due to absence of rental rebates given. ECWREIT continued to retain 10% of DI in 1Q21 (vs. 10% in 4Q20 and 5% in 1Q20) on a conservative view of uncertainties arising from prolonged COVID-19 pandemic globally and for general working capital purpose</li><li>ECWREIT has secured renewal of major lease at Hengde Logistics, extending WALE to 3.2 years (by GRI) from 3.1 years as at 31Mar21. ~11.8% of GRI will be due for renewal for the remaining of FY21E</li><li>Portfolio occupancy remains robust at 99.1% (vs. 99.3% in 4Q20 and 96.7% in 3Q20)</li><li>On 30Apr, ECWREIT announced an incident of a displacement and collapse of a berth at Chongxian Port Investment that resulted in the damage of two gantry cranes located within the vicinity of the berth. Due to the location of the damaged area, the operations at the damaged berth and the 2 adjacent berths have been suspended. The rest of the port operation is not affected. The cause of the incident is still being investigated. ECWREIT is working closely with the insurer to assess the quantum of revenue loss and property damage recoverable by insurance claims</li><li>Portfolio gearing stands at 38.3% (vs. 38.1% in 4Q20 and 38.6% in 1Q20) with average cost of debt of 4.1% pa. (vs. 4.2% in 4Q20 and 4.3% in 1Q20) and 100% of offshore facilities hedged</li><li>ECWREIT currently trades at 7.76% FY21E yield and 0.81x P/B.</li></ul><p>Comments: 1Q21 revenue and NPI came in at 26.5% and 26.0% of our full-year FY21E estimates, respectively. Meanwhile, 1Q21 DPU came in at 27.5% of FY21E estimates. Note that we have assumed a 10% DI retention for FY21E, the higher than expected 1Q21 DPU was due to a lower 1Q21 tax rate at 24.7% (vs. our projected 38.0%). Including 1Q21’s S$1.38m, total retained DI since 1Q20 has amounted to S$5.49m (or S$0.681c per Unit). Port Logistics had done well in 1Q21, with revenue increasing 40.4% YoY to S$12.7m, and NPI increasing 41.8% YoY to S$11.9m (NPI margin +0.9pp. YoY to 93.5%). E-commerce Logistics has also recorded a strong 1Q21 growth, with revenue and NPI rising 32.4% and 30.9% YoY to S$14.7m and S$12.7m, respectively (NPI margin -1.0% to 86.5%). On the other hand, Specialised Logistics was muted in 1Q21, with Revenue and NPI flattish YoY at S$3.4m and S$3.1m, respectively (NPI margin +0.7pp. to 90.7%). While insurance claims could offset the revenue loss and restoration costs somewhat, we are cognizant that Chongxian Port Investment contributed to ~27% and ~28% of FY20 Revenue and NPI, respectively. We are currently reviewing our recommendations for ECWREIT.</p>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) ECWREITSASSRBHGREITPeriod1Q211Q211Q21Gross Revenue (S$ m)30.8 (+30.9% YoY)EMA Rental Income: 34.1 (+23.4% YoY)Not DisclosedNPI (S$ m)27.7 (+30.9% YoY)EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)Not DisclosedDPU (S$ c)1.531.759 (+31.9% YoY)Not DisclosedNAV per Unit (S$)0.910.922Not DisclosedP/B (x)0.811.000.64(Based on 4Q20 NAV)Occupancy (%) 99.193.592.1Reversion (%) NANot DisclosedNot DisclosedGearing (%)38.327.635.6Cost of Debt (%)4.13.33.81 Yr Fwd Yield (%)7.767.46NADebt Hedged (%)100% of offshore facilitiesNot Disclosed60% of offshore loansTarget PriceUnder ReviewNANARatingUnder ReviewNANAEC World Reit (ECWREIT SP) 1Q21 DPU +32.3% YoY; Robust growth but DI retention persist with retained DI snowballing to S$5.49mBoth revenue and NPI grew by 30.9% YoY in 1Q21 to S$30.8m (26.9% BB est.) and S$27.7m (28.1% BB est.), respectively, mainly due to absence of rental rebates in 1Q20 and strengthening of RMB. In RMB terms, gross revenue and NPI were 26.0% and 26.1% YoY higher, respectively1Q21 DPU increased 32.3% YoY or 7.4% QoQ to S$1.532c (26.9% BB est.), mainly due to absence of rental rebates given. ECWREIT continued to retain 10% of DI in 1Q21 (vs. 10% in 4Q20 and 5% in 1Q20) on a conservative view of uncertainties arising from prolonged COVID-19 pandemic globally and for general working capital purposeECWREIT has secured renewal of major lease at Hengde Logistics, extending WALE to 3.2 years (by GRI) from 3.1 years as at 31Mar21. ~11.8% of GRI will be due for renewal for the remaining of FY21EPortfolio occupancy remains robust at 99.1% (vs. 99.3% in 4Q20 and 96.7% in 3Q20)On 30Apr, ECWREIT announced an incident of a displacement and collapse of a berth at Chongxian Port Investment that resulted in the damage of two gantry cranes located within the vicinity of the berth. Due to the location of the damaged area, the operations at the damaged berth and the 2 adjacent berths have been suspended. The rest of the port operation is not affected. The cause of the incident is still being investigated. ECWREIT is working closely with the insurer to assess the quantum of revenue loss and property damage recoverable by insurance claimsPortfolio gearing stands at 38.3% (vs. 38.1% in 4Q20 and 38.6% in 1Q20) with average cost of debt of 4.1% pa. (vs. 4.2% in 4Q20 and 4.3% in 1Q20) and 100% of offshore facilities hedgedECWREIT currently trades at 7.76% FY21E yield and 0.81x P/B.Comments: 1Q21 revenue and NPI came in at 26.5% and 26.0% of our full-year FY21E estimates, respectively. Meanwhile, 1Q21 DPU came in at 27.5% of FY21E estimates. Note that we have assumed a 10% DI retention for FY21E, the higher than expected 1Q21 DPU was due to a lower 1Q21 tax rate at 24.7% (vs. our projected 38.0%). Including 1Q21’s S$1.38m, total retained DI since 1Q20 has amounted to S$5.49m (or S$0.681c per Unit). Port Logistics had done well in 1Q21, with revenue increasing 40.4% YoY to S$12.7m, and NPI increasing 41.8% YoY to S$11.9m (NPI margin +0.9pp. YoY to 93.5%). E-commerce Logistics has also recorded a strong 1Q21 growth, with revenue and NPI rising 32.4% and 30.9% YoY to S$14.7m and S$12.7m, respectively (NPI margin -1.0% to 86.5%). On the other hand, Specialised Logistics was muted in 1Q21, with Revenue and NPI flattish YoY at S$3.4m and S$3.1m, respectively (NPI margin +0.7pp. to 90.7%). While insurance claims could offset the revenue loss and restoration costs somewhat, we are cognizant that Chongxian Port Investment contributed to ~27% and ~28% of FY20 Revenue and NPI, respectively. We are currently reviewing our recommendations for ECWREIT.

ASEAN Builder's Scoop (12May21) - ECWREIT strong growth despite retention

Singapore

BHG Retail REIT is a real estate investment trust (REIT) in Singapore.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

BHG Retail REIT (BHGREIT SP)

REIT Watch - China focused S-Reits resilient amid onshore property focus

Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

CAPL residential and FM bright spots; UOL turnaround story intact; SASSR sustained recovery momentum; CERT strong reversions, VLL muted land...

SCCM Asia Research

(Non-SGX Report) BHG Retail REIT: Poised for Renewed Growth

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

(Non-SGX Report) BHG Retail REIT: Good Proxy for China’s Retail Recovery

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (12May21) - ECWREIT strong growth despite retention

ECWREIT strong growth despite retention; SASSR rebounded from a low-base; CAPL fund mgmt, resi the bright spots; FPL SG & AUS supporting growth;...

SCCM Asia Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)