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/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> completes acquisition of eight units at Fu Yuen Building on Beach Road</h3><p>LHN has completed its acquisition of eight units in Fu Yuen Building at 75 Beach Road. It entered into an option to purchase the eight units in Apr21 for S$16.8m. LHN has completed the final payment towards the acquisition on 13Jul21. LHN will convert the entire third and fourth floors into its new headquarters office, and convert the fifth and sixth floors into a Co-working and Co-living space that will be managed by its residential brand, Coliwoo.</p>

SingaporeLHN Ltd (LHN SP) completes acquisition of eight units at Fu Yuen Building on Beach RoadLHN has completed its acquisition of eight units in Fu Yuen Building at 75 Beach Road. It entered into an option to purchase the eight units in Apr21 for S$16.8m. LHN has completed the final payment towards the acquisition on 13Jul21. LHN will convert the entire third and fourth floors into its new headquarters office, and convert the fifth and sixth floors into a Co-working and Co-living space that will be managed by its residential brand, Coliwoo.

ASEAN Builder's Scoop (14Jul21) - LHN Completed Fu Yuen Building Acq

<h2>Singapore</h2><h3>Condo and HDB rents continued to rise in May21; Volumes holding up well</h3><p>The rental market for both private apartments and HDB flats in May remained robust despite the tightened Covid-19 measures and border restrictions in place. Rents for condominium units rose by 0.3% MoM and are up 7.3% YoY. They are still down 11.4% from their peak in Jan13, according to SRX. HDB rents saw a slightly higher increase of 0.7% MoM and are up 7.9% YoY. However, they are still 9.2% off their highs in Aug13. With the May increases, condo rents extended their rise to five consecutive months, while HDB rents climbed for 11 straight months. Rental volume for condo apartments increased by 1.7% MoM to an estimated 4,603 units leased in May compared with 4,527 units in Apr. The number of units rented out last month are also 39.3% higher YoY, when Singapore was in its circuit breaker period. HDB rental volume in May saw a slight drop from Apr, down 0.9% MoM to an estimated 1,686 units from 1,702 units in Apr. HDB rental volume last month is 30.4% higher Yoy, though 8.5% lower than the five-year average volume for the month of May.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/219/original/image017.png?1623289645" class="editor-image img-responsive" data-smartkarma-image-id="212219"></figure><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/220/original/image018.png?1623289657" class="editor-image img-responsive" data-smartkarma-image-id="212220"></figure></section></section>

SingaporeCondo and HDB rents continued to rise in May21; Volumes holding up wellThe rental market for both private apartments and HDB flats in May remained robust despite the tightened Covid-19 measures and border restrictions in place. Rents for condominium units rose by 0.3% MoM and are up 7.3% YoY. They are still down 11.4% from their peak in Jan13, according to SRX. HDB rents saw a slightly higher increase of 0.7% MoM and are up 7.9% YoY. However, they are still 9.2% off their highs in Aug13. With the May increases, condo rents extended their rise to five consecutive months, while HDB rents climbed for 11 straight months. Rental volume for condo apartments increased by 1.7% MoM to an estimated 4,603 units leased in May compared with 4,527 units in Apr. The number of units rented out last month are also 39.3% higher YoY, when Singapore was in its circuit breaker period. HDB rental volume in May saw a slight drop from Apr, down 0.9% MoM to an estimated 1,686 units from 1,702 units in Apr. HDB rental volume last month is 30.4% higher Yoy, though 8.5% lower than the five-year average volume for the month of May.

ASEAN Builder's Scoop (10Jun21) - Condo/HDB Rents Continue to Rise in May21

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> revamps 1557 Keppel Road into office and Co-living spaces</h3><p>Once the nine-years lease was up in Dec19 for 1557 Keppel Road, LHN, the master tenant of the state land, decided to repurpose the place on a fresh term of lease into an integrated space comprising office and co-living spaces, occupying over 96,299sqft. The renovations took about 10 months, with delays due to the pandemic. The co-living business at the development runs under LHN’s brand Coliwoo, which has a total of over 800 rooms in the city-state. Coliwoo also operates in other areas like Balestier, Boon Lay and Bukit Timah. To date, LHN says 50% of its office spaces are already leased out. Confirmed tenants include a digital media and financial consultancy firm, while arrangements are still pending with three other businesses: an architectural firm, a digital media consultancy and a FinTech company. There will also be a gym operated by Anytime Fitness, and an F&amp;B eatery catering to the office and residential tenants within the development. At Coliwoo 1557 Keppel Road, LHN has also carved out 47 co-living units ranging from 180-260sqft across two residential blocks. Due to pandemic-led lockdowns, Coliwoo has seen demand from locals increase to 30% from 10% previously.</p>

SingaporeLHN Ltd (LHN SP) revamps 1557 Keppel Road into office and Co-living spacesOnce the nine-years lease was up in Dec19 for 1557 Keppel Road, LHN, the master tenant of the state land, decided to repurpose the place on a fresh term of lease into an integrated space comprising office and co-living spaces, occupying over 96,299sqft. The renovations took about 10 months, with delays due to the pandemic. The co-living business at the development runs under LHN’s brand Coliwoo, which has a total of over 800 rooms in the city-state. Coliwoo also operates in other areas like Balestier, Boon Lay and Bukit Timah. To date, LHN says 50% of its office spaces are already leased out. Confirmed tenants include a digital media and financial consultancy firm, while arrangements are still pending with three other businesses: an architectural firm, a digital media consultancy and a FinTech company. There will also be a gym operated by Anytime Fitness, and an F&amp;B eatery catering to the office and residential tenants within the development. At Coliwoo 1557 Keppel Road, LHN has also carved out 47 co-living units ranging from 180-260sqft across two residential blocks. Due to pandemic-led lockdowns, Coliwoo has seen demand from locals increase to 30% from 10% previously.

ASEAN Builder's Scoop (21May21) - LHN unveils 1557KR Co-living and office space

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> 1H21 results boosted by dormitory management contracts; Continue to ride on co-living trend</h3><ul><li>1H21 revenue increased 24.9% YoY to S$64.5m, primarily due to higher contributions from Facilities Management Business (+225.5% YoY) and Logistics Services Business (+6.0% YoY), partially offset by lower revenue from Space Optimisation Business (-33.6% YoY)</li><li>Space Optimisation: Revenue fell 33.6% YoY to S$19.4m in 1H21, due to lower contributions from Industrial Properties (-42.7% YoY to S$8.8m) and Commercial Properties (-53.8% YoY to S$4.1m), partially offset by higher revenue from Residential Properties (+28.9% YoY to S$6.5m). Lower revenues from Industrial and Commercial Properties were mainly due to expiry of 6 master leases, negative reversions, downtime at 1557 Keppel Road due to AEI works and IFRS 16 impacts. Occupancy for Industrial Properties -0.9pp YoY to 89.0% in 1H21 (vs. 89.9% in 1H20), while occupancy for Commercial Properties -15.3pp YoY to 69.2% in 1H21 (vs. 84.5% in 1H20). Meanwhile, higher revenue from Residential Properties was boosted by new serviced residence in Cambodia (started in 1Q21) and increase in revenue at 1A Lutheran Road</li><li>Facilities Management: Revenue increased by 225.5% YoY to S$31.6m in 1H21, mainly due to the increase in facilities management services provided for short-term contracts under the dormitory business</li><li>Logistics Services: Revenue grew 6.0% YoY to S$13.5m in 1H21, mainly due to increase in transportation services provided from the trucking business</li><li>1H21 PATMI increased 366.3% YoY to S$14.8m on higher other income and share of results from associates and joint ventures. 1H21 dividend came in at S$0.75c per share (+300% YoY), translating to an annualised dividend yield of ~4.5%. LHN’s cash and bank balances came in at S$36.3m, while net gearing (excluding IFRS16 impact) stood at 0.31x</li><li>LHN is currently trading at 4.3% FY21E dividend yield and 5.30x FY21E P/E</li></ul><p>Comments: 1H21 Revenue and PATMI form 52.2% and 59.1% of our full-year FY21E forecasts, respectively. We have expected 1H21 results to be higher than 2H21E due to the frontloading of dormitory management contracts (expected to end in 3Q21). With the resurgence of Covid-19 cases in Singapore, we do not discount the probability of LHN renewing the dormitory management contracts. Nonetheless, we believe its string of expansion plans for co-living business should provide steady growth moving forward. In addition to the new serviced residence in Cambodia (commissioned since 1Q21), 1557 Keppel Road and Nan’an China should also start contributing in FY21E. Meanwhile, newly acquired 320 Balestier Road (16Dec20), as well as proposed acquisitions of 40 &amp; 42 Amber Road (to be completed by 8Jun21), 8 strata units at Fu Yuen Building (subject to completion of two underlying options), and 115 Geylang Road (to be completed by 21Jul21) should drive growth in FY22E and onwards. We are currently reviewing our recommendations.</p>

SingaporeLHN Ltd (LHN SP) 1H21 results boosted by dormitory management contracts; Continue to ride on co-living trend1H21 revenue increased 24.9% YoY to S$64.5m, primarily due to higher contributions from Facilities Management Business (+225.5% YoY) and Logistics Services Business (+6.0% YoY), partially offset by lower revenue from Space Optimisation Business (-33.6% YoY)Space Optimisation: Revenue fell 33.6% YoY to S$19.4m in 1H21, due to lower contributions from Industrial Properties (-42.7% YoY to S$8.8m) and Commercial Properties (-53.8% YoY to S$4.1m), partially offset by higher revenue from Residential Properties (+28.9% YoY to S$6.5m). Lower revenues from Industrial and Commercial Properties were mainly due to expiry of 6 master leases, negative reversions, downtime at 1557 Keppel Road due to AEI works and IFRS 16 impacts. Occupancy for Industrial Properties -0.9pp YoY to 89.0% in 1H21 (vs. 89.9% in 1H20), while occupancy for Commercial Properties -15.3pp YoY to 69.2% in 1H21 (vs. 84.5% in 1H20). Meanwhile, higher revenue from Residential Properties was boosted by new serviced residence in Cambodia (started in 1Q21) and increase in revenue at 1A Lutheran RoadFacilities Management: Revenue increased by 225.5% YoY to S$31.6m in 1H21, mainly due to the increase in facilities management services provided for short-term contracts under the dormitory businessLogistics Services: Revenue grew 6.0% YoY to S$13.5m in 1H21, mainly due to increase in transportation services provided from the trucking business1H21 PATMI increased 366.3% YoY to S$14.8m on higher other income and share of results from associates and joint ventures. 1H21 dividend came in at S$0.75c per share (+300% YoY), translating to an annualised dividend yield of ~4.5%. LHN’s cash and bank balances came in at S$36.3m, while net gearing (excluding IFRS16 impact) stood at 0.31xLHN is currently trading at 4.3% FY21E dividend yield and 5.30x FY21E P/EComments: 1H21 Revenue and PATMI form 52.2% and 59.1% of our full-year FY21E forecasts, respectively. We have expected 1H21 results to be higher than 2H21E due to the frontloading of dormitory management contracts (expected to end in 3Q21). With the resurgence of Covid-19 cases in Singapore, we do not discount the probability of LHN renewing the dormitory management contracts. Nonetheless, we believe its string of expansion plans for co-living business should provide steady growth moving forward. In addition to the new serviced residence in Cambodia (commissioned since 1Q21), 1557 Keppel Road and Nan’an China should also start contributing in FY21E. Meanwhile, newly acquired 320 Balestier Road (16Dec20), as well as proposed acquisitions of 40 &amp; 42 Amber Road (to be completed by 8Jun21), 8 strata units at Fu Yuen Building (subject to completion of two underlying options), and 115 Geylang Road (to be completed by 21Jul21) should drive growth in FY22E and onwards. We are currently reviewing our recommendations.

ASEAN Builder's Scoop (14May21) - LHN Robust 1H21, Boosted by Mgmt Contracts

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

<ul><li>The Avantis International Small Cap Value ETF holds over 1,700 developed ex-US stocks, including 40 SGX-listed stocks.  </li><li>The 40 SGX-listed stocks have a combined market cap of S$50 billion and S$123 million ADT YTD.  </li><li>Global Resource Construction's ADT increased to S$3.1 million in 2026, reducing its bid-offer spread to 116bps.</li></ul>

The Avantis International Small Cap Value ETF holds over 1,700 developed ex-US stocks, including 40 SGX-listed stocks.  The 40 SGX-listed stocks have a combined market cap of S$50 billion and S$123 million ADT YTD.  Global Resource Construction's ADT increased to S$3.1 million in 2026, reducing its bid-offer spread to 116bps.

Channelling Global Small‑Cap Capital into Singapore Equities

Singapore

LHN is a real estate management services group that specializes in space optimization, property development, facilities management, and energy businesses. The company transforms under-utilized properties into productive spaces, including co-living residences under its Coliwoo brand, and provides integrated facilities management and renewable energy solutions. LHN Group was established in 1991 and is headquartered in Singapore.

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LHN (LHN SP)

ASEAN Builder's Scoop (14Jul21) - LHN Completed Fu Yuen Building Acq

LHN completed Fu Yuen building acq; Hotel SREITs boosted by higher SHN; Jun21 condo resale prices up 0.1% MoM; MDLN restructures its notes; PLIN to...

SCCM Asia Research

ASEAN Builder's Scoop (10Jun21) - Condo/HDB Rents Continue to Rise in May21

Condo/HDB rents continue to rise in May21; LHN on the lookout for more Co-living properties; WHA bets on Phuket reopening; ALI/AREIT property/share...

SCCM Asia Research

ASEAN Builder's Scoop (21May21) - LHN unveils 1557KR Co-living and office space

LHN unveils 1557KR Co-living and office space; SUN rolls out tenant supports; HK starts REIT subsidy to rival SG, Japan; AGI weak 1Q21 results; LBS...

SCCM Asia Research

ASEAN Builder's Scoop (14May21) - LHN Robust 1H21, Boosted by Mgmt Contracts

LHN robust 1H21, boosted by mgmt contracts; UHU riding on US consumer recovery; IREIT attractive 12% EUR yield; RLC eyes REIT listing by 2H21; MEG...

SCCM Asia Research

Channelling Global Small‑Cap Capital into Singapore Equities

The Avantis International Small Cap Value ETF holds over 1,700 developed ex-US stocks, including 40 SGX-listed stocks. The 40 SGX-listed stocks...

Singapore Exchange Ltd (SGX)

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