IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Daiwa House Logistics Trust / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a> has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. </li>
<li>In <a href="https://www.smartkarma.com/insights/daiwa-house-logistics-trust-ipo-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:60978" rel="noopener">Daiwa House Logistics Trust IPO: The Flow of Things</a>, we outlined its attractive value proposition.  </li>
<li>Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP) has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. 
In Daiwa House Logistics Trust IPO: The Flow of Things, we outlined its attractive value proposition.  
Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.


Daiwa House Logistics Trust IPO: Valuation Insights

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><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/882/original/image_38758426221635344719889.png?1635344723" class="editor-image img-responsive" data-smartkarma-image-id="237882"></figure><h3><a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> 2H21 DPU +39.3% YoY; Resilient occupancy and tenants’ sales amidst Phase-2 temporary setbacks</h3><p>2H21 revenue and NPI surged by 159.9% and 213.2% YoY, respectively, to S$167.5m and S$120.9m, mainly boosted by ARF acquisition. This brought FY21 revenue and NPI to S$341.2m (+107.5% YoY) and S$246.6m (+122.4%) or 96%/98% of BBG estimates, respectively. On a HoH basis, 2H21 revenue and NPI fell 3.5% and 3.8%, respectively, due to rental rebates provided to tenants in Sep21</p>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Frasers Centrepoint Trust (FCT SP) 2H21 DPU +39.3% YoY; Resilient occupancy and tenants’ sales amidst Phase-2 temporary setbacks2H21 revenue and NPI surged by 159.9% and 213.2% YoY, respectively, to S$167.5m and S$120.9m, mainly boosted by ARF acquisition. This brought FY21 revenue and NPI to S$341.2m (+107.5% YoY) and S$246.6m (+122.4%) or 96%/98% of BBG estimates, respectively. On a HoH basis, 2H21 revenue and NPI fell 3.5% and 3.8%, respectively, due to rental rebates provided to tenants in Sep21

<h2>Singapore</h2><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><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><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/235/060/original/image_86658513151634177122386.png?1634177126" class="editor-image img-responsive" data-smartkarma-image-id="235060"></figure><h3><a href="https://www.smartkarma.com/entities/aims-amp-capital-industrial" target="_blank" data-smartkarma-citation="entities:933" rel="noopener">AIMS APAC REIT (AAREIT SP)</a> 2Q22 DPU +18.8% YoY; Strong operational metrics with additional inorganic growth booster</h3><ul><li>1H22 revenue and NPI rose by 13.0% and 19.4% YoY, respectively, to S$65.2m (47.2% BB est.) and S$47.7m (55.5% BB est.), mainly due to acquisition of 7 Bulim Street (acquired in Oct20) and higher rental contribution from 7 Bulim Street, 20 Gul Way, 8 &amp; 10 Pandan Crescent and 541 Yishun Industrial Park A (new master tenant commenced in Jan21)</li><li>1H22 DPU surged 18.8% YoY to S$4.75c (50.0% BB est.). 2Q22 DPU also surged 25.0% YoY and 11.1% QoQ to S$2.50c</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)AIMS APAC REIT (AAREIT SP) 2Q22 DPU +18.8% YoY; Strong operational metrics with additional inorganic growth booster1H22 revenue and NPI rose by 13.0% and 19.4% YoY, respectively, to S$65.2m (47.2% BB est.) and S$47.7m (55.5% BB est.), mainly due to acquisition of 7 Bulim Street (acquired in Oct20) and higher rental contribution from 7 Bulim Street, 20 Gul Way, 8 &amp; 10 Pandan Crescent and 541 Yishun Industrial Park A (new master tenant commenced in Jan21)1H22 DPU surged 18.8% YoY to S$4.75c (50.0% BB est.). 2Q22 DPU also surged 25.0% YoY and 11.1% QoQ to S$2.50c

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-china-trust" target="_blank" data-smartkarma-citation="entities:8859" rel="noopener">CapitaLand China Trust (CLCT SP)</a> maiden acquisition of four prime logistics properties; DPU accretive by +3.5%</h3><ul><li>CLCT has proposed to acquire a portfolio of four prime logistics assets in Shanghai, Kunshan, Wuhan and Chengdu, which are key logistics hubs in China. This marks CLCT’s first foray into China’s logistics sector and increases its exposure to new economy asset classes, following CLCT’s maiden purchase of a portfolio of five business park properties. The acquisition is based on an aggregate agreed property value of RMB1,683.4m (~S$350.7m), representing a discount of ~0.6% to the aggregate valuation by an independent valuer. CLCT’s total cost is estimated at ~S$297.7m</li><li>The portfolio of four modern logistics properties has a total GFA of 265,259sqm, with a committed occupancy of 96.3% and WALE of 2.1 years as at 31Aug21. Three of the properties were completed between 2016-18, while the fourth was completed in 2010. Classification of tenant base by GRI includes logistics and warehouse (57%), E-commerce (37%) and others (6%). More than 80% of the leases have rental escalations in place, with a step-up ranging from 3-5% per annum</li><li>The transaction implies NPI yield of 5.0% (including rent support and rent-free reimbursement). CLCT intends to finance the acquisition through a 60% debt and 40% EFR (raising of up to ~S$120m), which will be DPU accretive by +3.5% on a 31Dec21 pro forma basis. This transaction is expected to be completed by end of 2021. Post transaction gearing will be 38.2% (from 35.9%)</li><li>Post-acquisition, the proportion of new economy assets in CLCT’s enlarged portfolio will rise to 21.4% from 15.3% by asset value. AUM will increase by 8.0% to S$4,729.2m. Given the longer land tenure of China’s logistics properties at 50 years at inception compared with retail assets at 40 years at inception, the remaining weighted average land tenure expiry of CLCT’s enlarged portfolio will positively extend by 1.94 years post-acquisition</li><li>Under its five-year acquisition growth roadmap, CLCT plans to achieve a balanced portfolio mix of 40% in commercial/integrated developments, 30% in retail properties and 30% in new economy assets (including business parks, logistics and data centers) by 2026.</li></ul>

SingaporeCapitaLand China Trust (CLCT SP) maiden acquisition of four prime logistics properties; DPU accretive by +3.5%CLCT has proposed to acquire a portfolio of four prime logistics assets in Shanghai, Kunshan, Wuhan and Chengdu, which are key logistics hubs in China. This marks CLCT’s first foray into China’s logistics sector and increases its exposure to new economy asset classes, following CLCT’s maiden purchase of a portfolio of five business park properties. The acquisition is based on an aggregate agreed property value of RMB1,683.4m (~S$350.7m), representing a discount of ~0.6% to the aggregate valuation by an independent valuer. CLCT’s total cost is estimated at ~S$297.7mThe portfolio of four modern logistics properties has a total GFA of 265,259sqm, with a committed occupancy of 96.3% and WALE of 2.1 years as at 31Aug21. Three of the properties were completed between 2016-18, while the fourth was completed in 2010. Classification of tenant base by GRI includes logistics and warehouse (57%), E-commerce (37%) and others (6%). More than 80% of the leases have rental escalations in place, with a step-up ranging from 3-5% per annumThe transaction implies NPI yield of 5.0% (including rent support and rent-free reimbursement). CLCT intends to finance the acquisition through a 60% debt and 40% EFR (raising of up to ~S$120m), which will be DPU accretive by +3.5% on a 31Dec21 pro forma basis. This transaction is expected to be completed by end of 2021. Post transaction gearing will be 38.2% (from 35.9%)Post-acquisition, the proportion of new economy assets in CLCT’s enlarged portfolio will rise to 21.4% from 15.3% by asset value. AUM will increase by 8.0% to S$4,729.2m. Given the longer land tenure of China’s logistics properties at 50 years at inception compared with retail assets at 40 years at inception, the remaining weighted average land tenure expiry of CLCT’s enlarged portfolio will positively extend by 1.94 years post-acquisitionUnder its five-year acquisition growth roadmap, CLCT plans to achieve a balanced portfolio mix of 40% in commercial/integrated developments, 30% in retail properties and 30% in new economy assets (including business parks, logistics and data centers) by 2026.

Singapore

Capitaland China Trust is a shopping mall real estate investment trust. The trust was established with the objective of investing on a long term basis in a diversified portfolio of income -producing real estate used primarily for retail purposed and located in China.

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CapitaLand China Trust (CLCT SP)

Daiwa House Logistics Trust IPO: Valuation Insights

Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable. Bookbuilding will end on 18 Nov, with an expected listing date...

Arun George

ASEAN Builder's Scoop (27Oct21)

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SCCM Asia Research

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 (13Oct21)

AAREIT strong operational metrics with inorganic booster; DASIN completes manager sale; Ascott record signing in VN; AWC repositioning 3 mega projects

SCCM Asia Research

ASEAN Builder's Scoop (12Oct21)

CLCT maiden acquisition of logistics assets; AREIT obtains SEC approval for swap deal; CLI 9M21 sales reached record level; LPKR 9M21 sales reached...

SCCM Asia Research

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