Mid-market focused investment bank within SE Asia, Evolve Capital Advisory Pte Ltd

Evolve Capital Research

Mid-market focused investment bank within SE Asia

Evolve Capital Advisory Pte Ltd

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/old-chang-kee-ltd" target="_blank" data-smartkarma-citation="entities:10465:1" rel="noopener">Old Chang Kee (OCK SP)</a> is a SGX-Catalist listed company, specializing in grab-and-go finger food such as its signature curry puff as well as skewered seafood offerings. </li>
<li>It also offers chicken-based products such as chicken wings and chicken balls as a halal-certified food operator.</li>
<li>We initiate non-rated coverage on Old Chang Kee. Post-COVID, the firm’s revenue had steadily recovered to pre-COVID levels by FY23, with a notable shift in its sales mix.</li>
</ul>



Old Chang Kee (OCK SP) is a SGX-Catalist listed company, specializing in grab-and-go finger food such as its signature curry puff as well as skewered seafood offerings. 
It also offers chicken-based products such as chicken wings and chicken balls as a halal-certified food operator.
We initiate non-rated coverage on Old Chang Kee. Post-COVID, the firm’s revenue had steadily recovered to pre-COVID levels by FY23, with a notable shift in its sales mix.


Old Chang Kee Initiation - Defying the Dip, Resilience Amidst F&B Headwinds

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)

<ul><li><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> 3Q22 DPU +5.8% YoY; Sustained robust occupancy and reversions  </li><li><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> 2H21 DPU +35.1% YoY – Negative 3.4% retail reversions a concern</li><li>Office rents and vacancy bottomed in 4Q21; Index rose 1.9% in 2021</li></ul>

Mapletree Logistics Trust (MLT SP) 3Q22 DPU +5.8% YoY; Sustained robust occupancy and reversions  CapitaLand China Trust (CLCT SP) 2H21 DPU +35.1% YoY – Negative 3.4% retail reversions a concernOffice rents and vacancy bottomed in 4Q21; Index rose 1.9% in 2021

ASEAN Builder's Scoop (31Jan22) - MLT Sustained Robust Occupancy, Reversions

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/848/original/image_287512276191635730663687.png?1635730667" class="editor-image img-responsive" data-smartkarma-image-id="238848"></figure><h3><a href="https://www.smartkarma.com/entities/elite-commercial-reit" target="_blank" data-smartkarma-citation="entities:28807" rel="noopener">Elite Commercial REIT (ELITE SP)</a> 3Q21 DPU +20.3% YoY; High-yielding GBP exposure with steady operating metrics</h3><ul><li>3Q21 revenue came in at GBP9.4m (+61.7% YoY; 60.4% higher than IPO projection), while NPI was undisclosed. Revenue was boosted by contributions from its maiden acquisitions. 9M21 revenue rose 67.2% YoY to GBP25.3m (75% of BB est.)</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Elite Commercial REIT (ELITE SP) 3Q21 DPU +20.3% YoY; High-yielding GBP exposure with steady operating metrics3Q21 revenue came in at GBP9.4m (+61.7% YoY; 60.4% higher than IPO projection), while NPI was undisclosed. Revenue was boosted by contributions from its maiden acquisitions. 9M21 revenue rose 67.2% YoY to GBP25.3m (75% of BB est.)

<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: 141.25pt;"> </td><td style="width: 141.2pt;">PRIME (US$)</td><td style="width: 141.2pt;">KORE (US$)</td><td style="width: 141.2pt;">MUST (US$)</td></tr><tr><td style="width: 141.25pt;">Period</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td></tr><tr><td style="width: 141.25pt;">Gross Revenue (S$ m)</td><td style="width: 141.2pt;">35.9 (+2.5% YoY)</td><td style="width: 141.2pt;">34.6 (-2.1% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NPI (S$ m)</td><td style="width: 141.2pt;">23.0 (-2.0% YoY)</td><td style="width: 141.2pt;">20.4 (-2.8% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">DPU (S$ c)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NAV per Unit (S$)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">0.730</td></tr><tr><td style="width: 141.25pt;">P/B (x)</td><td style="width: 141.2pt;">0.99(Based on 4Q20 NAV)</td><td style="width: 141.2pt;">0.90 (Based on 4Q20 NAV)</td><td style="width: 141.2pt;">1.030 (Based on 4Q20 NAV)</td></tr><tr><td style="width: 141.25pt;">Occupancy (%)</td><td style="width: 141.2pt;">91.7</td><td style="width: 141.2pt;">91.6</td><td style="width: 141.2pt;">92.0</td></tr><tr><td style="width: 141.25pt;">Reversion (%)</td><td style="width: 141.2pt;">8.5</td><td style="width: 141.2pt;">5.7</td><td style="width: 141.2pt;">2.1</td></tr><tr><td style="width: 141.25pt;">Gearing (%)</td><td style="width: 141.2pt;">33.6</td><td style="width: 141.2pt;">37.5</td><td style="width: 141.2pt;">41.3</td></tr><tr><td style="width: 141.25pt;">Cost of Debt (%)</td><td style="width: 141.2pt;">2.8</td><td style="width: 141.2pt;">2.82</td><td style="width: 141.2pt;">3.18</td></tr><tr><td style="width: 141.25pt;">1 Yr Fwd Yield (%)</td><td style="width: 141.2pt;">8.24</td><td style="width: 141.2pt;">8.3</td><td style="width: 141.2pt;">8.00</td></tr><tr><td style="width: 141.25pt;">Debt Hedged (%)</td><td style="width: 141.2pt;">90.0</td><td style="width: 141.2pt;">84.7</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Target Price</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Rating</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/prime-us-reit" target="_blank" data-smartkarma-citation="entities:28144" rel="noopener">Prime US REIT (PRIME SP)</a> 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  </h3><ul><li>1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosed</li><li>Leasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potential</li><li>Overall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%</li><li>Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedged</li><li>PRIME currently trades at 8.24% FY21E yield and 0.99x P/B.</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) PRIME (US$)KORE (US$)MUST (US$)Period1Q211Q211Q21Gross Revenue (S$ m)35.9 (+2.5% YoY)34.6 (-2.1% YoY)NANPI (S$ m)23.0 (-2.0% YoY)20.4 (-2.8% YoY)NADPU (S$ c)Not DisclosedNot DisclosedNANAV per Unit (S$)Not DisclosedNot Disclosed0.730P/B (x)0.99(Based on 4Q20 NAV)0.90 (Based on 4Q20 NAV)1.030 (Based on 4Q20 NAV)Occupancy (%)91.791.692.0Reversion (%)8.55.72.1Gearing (%)33.637.541.3Cost of Debt (%)2.82.823.181 Yr Fwd Yield (%)8.248.38.00Debt Hedged (%)90.084.7NATarget PriceNANANARatingNANANAPrime US REIT (PRIME SP) 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosedLeasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potentialOverall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedgedPRIME currently trades at 8.24% FY21E yield and 0.99x P/B.

ASEAN Builder's Scoop (19May21) - PRIME robust operations metrics

Malaysia

Capitaland Malaysia Trust is a real estate investment trust. The Company focuses on long-term investments in income-producing real estate primarily used for retail, commercial, office and industrial purposes. Capitaland Malaysia Trust serves customers in Malaysia.

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Capitaland Malaysia Trust (CLMT MK)

Old Chang Kee Initiation - Defying the Dip, Resilience Amidst F&B Headwinds

We initiate non-rated coverage on Old Chang Kee. Post-COVID, the firm’s revenue had steadily recovered to pre-COVID levels by FY23, with a notable...

Evolve Capital Advisory Pte Ltd

ASEAN Builder's Scoop (31Jan22) - MLT Sustained Robust Occupancy, Reversions

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ELITE high-yielding GBP exposure; ART US, Europe leading the recovery; CDREIT AUS, SG remains muted; ART expands further into US dormitory; CERT...

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ASEAN Builder's Scoop (19May21) - PRIME robust operations metrics

PRIME robust operations metrics; CIT plans for GBP500m SREIT IPO; FIRT completes restructuring; Retail landlords roll out tenants support; China...

SCCM Asia Research

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