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>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 363.047px;"> </td><td style="width: 362.953px;">MLT</td></tr><tr><td style="width: 363.047px;">Period</td><td style="width: 362.953px;">1Q22</td></tr><tr><td style="width: 363.047px;">Gross Revenue (S$ m)</td><td style="width: 362.953px;">163.7 (+23.7% YoY)</td></tr><tr><td style="width: 363.047px;">NPI (S$ m)</td><td style="width: 362.953px;">144.2 (+21.3% YoY)</td></tr><tr><td style="width: 363.047px;">DPU (S$ c)</td><td style="width: 362.953px;">2.161 (+5.7% YoY)</td></tr><tr><td style="width: 363.047px;">NAV per Unit (S$)</td><td style="width: 362.953px;">1.32</td></tr><tr><td style="width: 363.047px;">P/B (x)</td><td style="width: 362.953px;">1.59</td></tr><tr><td style="width: 363.047px;">Occupancy (%)</td><td style="width: 362.953px;">97.8</td></tr><tr><td style="width: 363.047px;">Reversion (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">Gearing (%)</td><td style="width: 362.953px;">38.2</td></tr><tr><td style="width: 363.047px;">Cost of Debt (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">1 Yr Fwd Yield (%)</td><td style="width: 362.953px;">4.14</td></tr><tr><td style="width: 363.047px;">Debt Hedged (%)</td><td style="width: 362.953px;">75%</td></tr><tr><td style="width: 363.047px;">Target Price</td><td style="width: 362.953px;">NA</td></tr><tr><td style="width: 363.047px;">Rating</td><td style="width: 362.953px;">NA</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) MLTPeriod1Q22Gross Revenue (S$ m)163.7 (+23.7% YoY)NPI (S$ m)144.2 (+21.3% YoY)DPU (S$ c)2.161 (+5.7% YoY)NAV per Unit (S$)1.32P/B (x)1.59Occupancy (%)97.8Reversion (%)2.2Gearing (%)38.2Cost of Debt (%)2.21 Yr Fwd Yield (%)4.14Debt Hedged (%)75%Target PriceNARatingNA

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

<h2>Singapore</h2><h3><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> looks to acquire a Changi logistics property for S$24.5m; Stabilized NPI yield of ~6.2% </h3><ul><li>MLT has been granted an option to acquire 9 Changi South Street 2 from RSH Holdings for a purchase price of S$24.5m (vs. independent valuation of S$24.6m as at 25Jun21). The property, a purpose-built facility comprising a part 3-storey, part 4-storey temperature-controlled warehouse with ancillary office and other amenities, has a GFA of 11,506sqm. It is located at a prime location and a relatively long remaining land tenure of ~33.3 years. The property is also adjacent to its existing property at 15 Changi South Street 2, thus presenting the opportunity for potential economies of scale</li><li>Its favourable location should attract demand from industries involved in high-value and time-sensitive goods such as electronics and pharmaceutical, as well as e-commerce firms and third-party logistics players (“3PLs”) looking to expand in the Changi South/East region. The Property will be sold with vacant possession and the Manager is in talks with an international 3PL to lease it as the anchor tenant</li><li>The Proposed Acquisition is subject to, among others, approval from JTC Corporation and exercise of the OTP by MLT. The total purchase consideration of S$27.2m (including transaction costs of c.S$2.7m) will be funded by debt and is expected to be completed by 3QFY21/22</li><li>Upon completion, MLT’s aggregate leverage ratio will be ~38.5%, while MLT’s total portfolio will comprise 164 properties with total AUM of S$10.8bn. The proposed acquisition is expected to generate a stabilised NPI yield of ~6.2% based on the purchase price and initial land premium, and it is also expected to be DPU accretive.</li></ul>

SingaporeMapletree Logistics Trust (MLT SP) looks to acquire a Changi logistics property for S$24.5m; Stabilized NPI yield of ~6.2% MLT has been granted an option to acquire 9 Changi South Street 2 from RSH Holdings for a purchase price of S$24.5m (vs. independent valuation of S$24.6m as at 25Jun21). The property, a purpose-built facility comprising a part 3-storey, part 4-storey temperature-controlled warehouse with ancillary office and other amenities, has a GFA of 11,506sqm. It is located at a prime location and a relatively long remaining land tenure of ~33.3 years. The property is also adjacent to its existing property at 15 Changi South Street 2, thus presenting the opportunity for potential economies of scaleIts favourable location should attract demand from industries involved in high-value and time-sensitive goods such as electronics and pharmaceutical, as well as e-commerce firms and third-party logistics players (“3PLs”) looking to expand in the Changi South/East region. The Property will be sold with vacant possession and the Manager is in talks with an international 3PL to lease it as the anchor tenantThe Proposed Acquisition is subject to, among others, approval from JTC Corporation and exercise of the OTP by MLT. The total purchase consideration of S$27.2m (including transaction costs of c.S$2.7m) will be funded by debt and is expected to be completed by 3QFY21/22Upon completion, MLT’s aggregate leverage ratio will be ~38.5%, while MLT’s total portfolio will comprise 164 properties with total AUM of S$10.8bn. The proposed acquisition is expected to generate a stabilised NPI yield of ~6.2% based on the purchase price and initial land premium, and it is also expected to be DPU accretive.

ASEAN Builder's Scoop (12Jul21) - MLT Acquires Changi Logistics at 6.2% Yield

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/gke-corp-ltd" target="_blank" data-smartkarma-citation="entities:15893:1" rel="noopener">GKE Corp Ltd (GKEC SP)</a> is an integrated provider of warehousing and logistics solutions that include general cargo storage, dangerous cargo storage, bonded and license warehousing services, amongst others.</li>
<li>It also has strategic investments, which includes an infrastructural materials and services business in China, as well as agriculture and retail and distribution in Singapore. </li>
<li>We initiate non-rated coverage on GKE Corporation. Since listing, the company has progressively broadened its service offerings to encompass marine and chemical logistics, and the storage of dangerous goods (DGs). </li>
</ul>



GKE Corp Ltd (GKEC SP) is an integrated provider of warehousing and logistics solutions that include general cargo storage, dangerous cargo storage, bonded and license warehousing services, amongst others.
It also has strategic investments, which includes an infrastructural materials and services business in China, as well as agriculture and retail and distribution in Singapore. 
We initiate non-rated coverage on GKE Corporation. Since listing, the company has progressively broadened its service offerings to encompass marine and chemical logistics, and the storage of dangerous goods (DGs). 


GKE Corporation Initiation - Firing on Multiple Cylinders

<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

Singapore

Mapletree Logistics Trust is a Singapore-based real estate investment trust (REIT) that invests in a diversified portfolio of income-producing logistics real estate and related assets across Asia Pacific. It provides logistics spaces and offers services such as leasing, sale & leaseback, asset enhancement, and development. The company is headquartered in Singapore and was founded in 2004.

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Mapletree Logistics (MLT SP)

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

MLT steady occ and reversions support 1.6x P/B; DASIN extends credit facilities for 5mo; FIRT exits South Korean market; LMRT extends malls...

SCCM Asia Research

ASEAN Builder's Scoop (12Jul21) - MLT Acquires Changi Logistics at 6.2% Yield

MLT acquires Changi logistics at 6.2% yield; FRAG privatization offer; Selo Group enters Malaysian market; AWC bets on tourism rebound; BI to...

SCCM Asia Research

GKE Corporation Initiation - Firing on Multiple Cylinders

GKE Corp is an integrated provider of warehousing and logistics solutions that include general cargo storage, dangerous cargo storage, bonded and...

Evolve Capital Advisory Pte Ltd

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

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