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/esr-reit" target="_blank" data-smartkarma-citation="entities:10934" rel="noopener">ESR-REIT (EREIT SP)</a> provides indicative timeline till merger is finalised</li><li><a href="https://www.smartkarma.com/entities/united-hampshire-us-reit" target="_blank" data-smartkarma-citation="entities:28874" rel="noopener">United Hampshire US REIT (UHU SP)</a> extends due diligence for fourth time</li><li>Hmlet and European co-living player Habyt to merge via equity share swap</li></ul>

ESR-REIT (EREIT SP) provides indicative timeline till merger is finalisedUnited Hampshire US REIT (UHU SP) extends due diligence for fourth timeHmlet and European co-living player Habyt to merge via equity share swap

ASEAN Builder's Scoop (13Apr22) - EREIT Releases Merger Process Timeline

<ul><li>The Ascott Limited establishes new US student accommodation JV with Riyad Capital</li><li>Singapore property firms increases presence in Vietnam - Amid a wealth boom and an economic rebound, Vietnam has been attracting capital from property companies in Singapore.</li><li><a href="https://www.smartkarma.com/entities/ayala-land-inc" target="_blank" data-smartkarma-citation="entities:131" rel="noopener">Ayala Land Inc (ALI PM)</a> details property-for-share swap deal (Regina Capital)</li></ul>

The Ascott Limited establishes new US student accommodation JV with Riyad CapitalSingapore property firms increases presence in Vietnam - Amid a wealth boom and an economic rebound, Vietnam has been attracting capital from property companies in Singapore.Ayala Land Inc (ALI PM) details property-for-share swap deal (Regina Capital)

ASEAN Builder's Scoop (3Feb22) - Ascott/Riyad Capital in US Student Accommodation JV

<h2>Singapore</h2><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> – Cushioned by retained DI (BUY; TP S$0.87/Unit)</h3><p>ECWREIT has released partial of previously retained DI in 2Q21, and is likely to continue to do so in the coming quarters. Meanwhile, acquisition offer from Forchn-led consortium is still live and likely to reach a verdict by end-2021. Reiterate BUY with higher TP of S$0.87/unit, after adjusting for stronger Port Logistics revenue and RMB, as well as higher OpEx and tax in FY21E. We expect ECWREIT to fully release FY19-20 retained DI while retaining 10% of DI in FY21E, and payout ratio to normalize to 99.5% in FY22E and onwards.</p><p>Stable performance; Cushioned by retained DI. After adjusting for effective rent, security deposit accretion and other relevant distribution adjustments, 2Q21 Revenue and NPI were up 5.3% and 2.7% YoY, respectively. However, 2Q21 DI decreased 6.4% YoY on higher finance costs and withholding tax. ECWREIT has thus released S$1.951m (or S$0.242c/unit) of previously retained DI, propping 2Q21 DPU up to S$1.532c, 10.5% YoY higher or the same as 1Q21. Meanwhile, ECWREIT continued to retain 10% of DI in 2Q21. There are S$5.34m of retained DI (or S$0.662c/unit) remaining for ECWREIT to stabilise or boost future DPU. 1H21 Revenue/ NPI/ DPU formed ~51% of our full-year FY21E forecasts</p><p>Built-in rental escalations to sustain organic growth. Stronger performances from Port Logistics and E-commerce Logistics portfolios have offset the weaker Specialised Logistics portfolio. Notably, we have seen sustained revenue growth for its Port Logistics portfolio, from low of S$9.06m in 1Q20 to S$13.12m in 2Q21, despite the minor disruption at Chongxian Port Investment. Following a major lease renewal at Hengde Logistics on 7May21, only 5.8% of NLA will be due for renewal for the remaining of FY21E. Out of which, c.5.0% of GRI will be from Chongxian Port Logistics and the remaining c.0.8% are from Wuhan Meiluote (dormitory site). Mgmt. is optimistic to renew the CXPL leases at similar terms and short-term tenure. On a separate note, insurance claim assessment in relation to the incident at Chongxian Port Investment is still ongoing and repair work is expected to start from end-Aug21</p><p>Potential privatisation by Forchn-led consortium is still on the table. Whilst there has been no update since Forchn International Pte. Ltd. first disclosed its interest to acquire ECWREIT’s interests in all of its properties on 17May21, mgmt. hopes for a conclusion to be reached by end-2021</p><p>Reiterate BUY with higher TP of S$0.87/unit. Organic growth should continue to underpin DPU growth. 4 of its master leases (contributed ~73% of FY20 revenue) with effective annual escalations should offer ~1.8% revenue growth pa. Potential re-rating catalyst in near term would be DPU accretive acquisition, in view of its current low gearing at 37.6%. ECWREIT is currently trading at 0.87x P/B and 7.3% FY21E yield.</p>

SingaporeEC World Reit (ECWREIT SP) – Cushioned by retained DI (BUY; TP S$0.87/Unit)ECWREIT has released partial of previously retained DI in 2Q21, and is likely to continue to do so in the coming quarters. Meanwhile, acquisition offer from Forchn-led consortium is still live and likely to reach a verdict by end-2021. Reiterate BUY with higher TP of S$0.87/unit, after adjusting for stronger Port Logistics revenue and RMB, as well as higher OpEx and tax in FY21E. We expect ECWREIT to fully release FY19-20 retained DI while retaining 10% of DI in FY21E, and payout ratio to normalize to 99.5% in FY22E and onwards.Stable performance; Cushioned by retained DI. After adjusting for effective rent, security deposit accretion and other relevant distribution adjustments, 2Q21 Revenue and NPI were up 5.3% and 2.7% YoY, respectively. However, 2Q21 DI decreased 6.4% YoY on higher finance costs and withholding tax. ECWREIT has thus released S$1.951m (or S$0.242c/unit) of previously retained DI, propping 2Q21 DPU up to S$1.532c, 10.5% YoY higher or the same as 1Q21. Meanwhile, ECWREIT continued to retain 10% of DI in 2Q21. There are S$5.34m of retained DI (or S$0.662c/unit) remaining for ECWREIT to stabilise or boost future DPU. 1H21 Revenue/ NPI/ DPU formed ~51% of our full-year FY21E forecastsBuilt-in rental escalations to sustain organic growth. Stronger performances from Port Logistics and E-commerce Logistics portfolios have offset the weaker Specialised Logistics portfolio. Notably, we have seen sustained revenue growth for its Port Logistics portfolio, from low of S$9.06m in 1Q20 to S$13.12m in 2Q21, despite the minor disruption at Chongxian Port Investment. Following a major lease renewal at Hengde Logistics on 7May21, only 5.8% of NLA will be due for renewal for the remaining of FY21E. Out of which, c.5.0% of GRI will be from Chongxian Port Logistics and the remaining c.0.8% are from Wuhan Meiluote (dormitory site). Mgmt. is optimistic to renew the CXPL leases at similar terms and short-term tenure. On a separate note, insurance claim assessment in relation to the incident at Chongxian Port Investment is still ongoing and repair work is expected to start from end-Aug21Potential privatisation by Forchn-led consortium is still on the table. Whilst there has been no update since Forchn International Pte. Ltd. first disclosed its interest to acquire ECWREIT’s interests in all of its properties on 17May21, mgmt. hopes for a conclusion to be reached by end-2021Reiterate BUY with higher TP of S$0.87/unit. Organic growth should continue to underpin DPU growth. 4 of its master leases (contributed ~73% of FY20 revenue) with effective annual escalations should offer ~1.8% revenue growth pa. Potential re-rating catalyst in near term would be DPU accretive acquisition, in view of its current low gearing at 37.6%. ECWREIT is currently trading at 0.87x P/B and 7.3% FY21E yield.

External broker reports(aggregated public sources), Kenanga Investment Bank Bhd

Kenanga Investment Bank Bhd

External broker reports(aggregated public sources)

Established for more than 45 years, Kenanga Investment Bank Berhad is a financial group in Malaysia with extensive experience in equity broking, investment banking, treasury, Islamic banking, listed derivatives, investment management, wealth management, structured lending and trade financing. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>KLCC’s 1HFY23 net earnings of RM361.4m (+11% YoY) and YTD distributions of 17.3 sen are within expectations.</li><li>The group has registered sustained growth across its key businesses with most notable gains seen in the hotel space.</li><li>We maintain our assumptions and TP of RM7.18 (based on a 5.5% target yield) but upgrade the stock to OP (from MP). </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

KLCC’s 1HFY23 net earnings of RM361.4m (+11% YoY) and YTD distributions of 17.3 sen are within expectations.The group has registered sustained growth across its key businesses with most notable gains seen in the hotel space.We maintain our assumptions and TP of RM7.18 (based on a 5.5% target yield) but upgrade the stock to OP (from MP). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

KLCCP Stapled Group - Resilient Signals Across the Board

Malaysia

KLCC Property Holdings Bhd comprises of units in a Real Estate Investment Trust (KLCC REIT) stapled together with the ordinary shares of KLCC Property Holdings Berhad. The Stapled Security, through the subsidiaries of KLCC Property Holdings Berhad, is engaged in providing facility management services and car parking management services.

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KLCCP Stapled (KLCCSS MK)

ASEAN Builder's Scoop (13Apr22) - EREIT Releases Merger Process Timeline

UHU extends due diligence for 4th time; Hmlet and Habyt to merge via equity swap; Condo resale volume up +35.6% and prices +0.8% in Mar; KLCCP sees...

SCCM Asia Research

ASEAN Builder's Scoop (3Feb22) - Ascott/Riyad Capital in US Student Accommodation JV

SG firms increasing presence in VN; ALI details swap deal; Phils office subdued in 1H22; Nomura/Federal Land signs JV; NCH aims 31% YoY sales...

SCCM Asia Research

ASEAN Builder's Scoop (18Aug21)

ECWREIT cushioned by retained DI; Lendlease launches first DC project in Japan; KLCCSS 2Q21 net income rose 3% YoY; Indo expansive 2022 Bugdet Bill

SCCM Asia Research

KLCCP Stapled Group - Resilient Signals Across the Board

KLCC’s 1HFY23 net earnings of RM361.4m (+11% YoY) and YTD distributions of 17.3 sen are within expectations. The group has registered sustained...

Kenanga Investment Bank Bhd

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