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><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/000/238/456/original/image_76502934321635528996334.png?1635528999" class="editor-image img-responsive" data-smartkarma-image-id="238456"></figure><h3><a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> 1Q22 Business Updates; Little help from VTL leading up to festive season</h3><ul><li>1Q22 revenue and NPI rose by +4.0% and +15.1% YoY, respectively, to S$44.8m (22.8% of BB est.) and S$34.3m (25.3% of BB est.), respectively, mainly due to lower rental assistance and lower operating expenses, which was partially offset by lower contributions from Wisma Atria (Revenue: -8.9%, NPI: -8% YoY). No DI nor DPU was disclosed</li></ul><div style="display: none;"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/455/original/blobid0.png?1635528963" class="editor-image img-responsive" data-smartkarma-image-id="238455"></figure></div>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Starhill Global REIT (SGREIT SP) 1Q22 Business Updates; Little help from VTL leading up to festive season1Q22 revenue and NPI rose by +4.0% and +15.1% YoY, respectively, to S$44.8m (22.8% of BB est.) and S$34.3m (25.3% of BB est.), respectively, mainly due to lower rental assistance and lower operating expenses, which was partially offset by lower contributions from Wisma Atria (Revenue: -8.9%, NPI: -8% YoY). No DI nor DPU was disclosed

<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: 97.4pt;"> </td><td style="width: 97.4pt;">KDCREIT</td><td style="width: 97.45pt;">MAGIC</td><td style="width: 97.4pt;">ART</td><td style="width: 97.45pt;">KORE (US$)</td><td style="width: 97.4pt;">PREIT</td><td style="width: 97.45pt;">LMRT</td></tr><tr><td style="width: 97.4pt;">Period</td><td style="width: 97.4pt;">2Q21</td><td style="width: 97.45pt;">1Q22</td><td style="width: 97.4pt;">1H21</td><td style="width: 97.45pt;">1H21</td><td style="width: 97.4pt;">2Q21</td><td style="width: 97.45pt;">2Q21</td></tr><tr><td style="width: 97.4pt;">Gross Revenue (S$ m)</td><td style="width: 97.4pt;">68.5 (+7.5% YoY)</td><td style="width: 97.45pt;">103 (+10.0% YoY)</td><td style="width: 97.4pt;">185.0 (-11.2% YoY)</td><td style="width: 97.45pt;">68.38 (-3% YoY)</td><td style="width: 97.4pt;">29.6 (-2.3% YoY)</td><td style="width: 97.45pt;">49.65 (+81.3% YoY)</td></tr><tr><td style="width: 97.4pt;">NPI (S$ m)</td><td style="width: 97.4pt;">62.8 (+6.9% YoY)</td><td style="width: 97.45pt;">78.3 (+14.3% YoY)</td><td style="width: 97.4pt;">82.1 (-7.3% YoY)</td><td style="width: 97.45pt;">40.58 (-3.1% YoY)</td><td style="width: 97.4pt;">27.4 (-2.8% YoY)</td><td style="width: 97.45pt;">31.8 (+148% YoY)</td></tr><tr><td style="width: 97.4pt;">DPU (S$ c)</td><td style="width: 97.4pt;">2.462 (+7.5% YoY)</td><td style="width: 97.45pt;">Not Disclosed</td><td style="width: 97.4pt;">2.050 (+95.2% YoY)</td><td style="width: 97.45pt;">3.16 (+1.9% YoY)</td><td style="width: 97.4pt;">3.38 (+0.7% YoY)</td><td style="width: 97.45pt;">0.09 (-18.2% YoY)</td></tr><tr><td style="width: 97.4pt;">NAV per Unit (S$)</td><td style="width: 97.4pt;">1.21</td><td style="width: 97.45pt;">1.238</td><td style="width: 97.4pt;">1.19</td><td style="width: 97.45pt;">0.82</td><td style="width: 97.4pt;">1.98</td><td style="width: 97.45pt;">0.0955</td></tr><tr><td style="width: 97.4pt;">P/B (x)</td><td style="width: 97.4pt;">2.12</td><td style="width: 97.45pt;">0.83</td><td style="width: 97.4pt;">0.85</td><td style="width: 97.45pt;">0.95</td><td style="width: 97.4pt;">2.38</td><td style="width: 97.45pt;">0.64</td></tr><tr><td style="width: 97.4pt;">Occupancy (%)</td><td style="width: 97.4pt;">98.0</td><td style="width: 97.45pt;">99.8 (Festival Walk)92.9 (Gateway Plaza)99.7 (Sandhill Plaza)98.2 (Japan Properties)95.7 (The Pinnacle Gangnam)</td><td style="width: 97.4pt;">Mid-50</td><td style="width: 97.45pt;">90.5</td><td style="width: 97.4pt;">99.7</td><td style="width: 97.45pt;">83.4</td></tr><tr><td style="width: 97.4pt;">Reversion (%)</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">-34 (Festival Walk)-27 (Gateway Plaza)-4 (Sandhill Plaza)+0.2 (Japan Properties)</td><td style="width: 97.4pt;">Portfolio RevPAU: S$60 (-14% YoY)</td><td style="width: 97.45pt;">+5.4</td><td style="width: 97.4pt;">Not Disclosed</td><td style="width: 97.45pt;">3.4</td></tr><tr><td style="width: 97.4pt;">Gearing (%)</td><td style="width: 97.4pt;">36.7</td><td style="width: 97.45pt;">41.8</td><td style="width: 97.4pt;">35.9</td><td style="width: 97.45pt;">37.1</td><td style="width: 97.4pt;">37</td><td style="width: 97.45pt;">42.5</td></tr><tr><td style="width: 97.4pt;">Cost of Debt (%)</td><td style="width: 97.4pt;">1.5</td><td style="width: 97.45pt;">1.87</td><td style="width: 97.4pt;">1.6</td><td style="width: 97.45pt;">2.82</td><td style="width: 97.4pt;">0.56</td><td style="width: 97.45pt;">6.47</td></tr><tr><td style="width: 97.4pt;">1 Yr Fwd Yield (%)</td><td style="width: 97.4pt;">3.91</td><td style="width: 97.45pt;">6.8</td><td style="width: 97.4pt;">4.16</td><td style="width: 97.45pt;">7.77</td><td style="width: 97.4pt;">2.97</td><td style="width: 97.45pt;">5.5 (annualized 1H21)</td></tr><tr><td style="width: 97.4pt;">Debt Hedged (%)</td><td style="width: 97.4pt;">67</td><td style="width: 97.45pt;">82</td><td style="width: 97.4pt;">50</td><td style="width: 97.45pt;">84.7</td><td style="width: 97.4pt;">82</td><td style="width: 97.45pt;">80.6</td></tr><tr><td style="width: 97.4pt;">Target Price</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">N/A</td><td style="width: 97.45pt;">N/A</td></tr><tr><td style="width: 97.4pt;">Rating</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">N/A</td><td style="width: 97.45pt;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) KDCREITMAGICARTKORE (US$)PREITLMRTPeriod2Q211Q221H211H212Q212Q21Gross Revenue (S$ m)68.5 (+7.5% YoY)103 (+10.0% YoY)185.0 (-11.2% YoY)68.38 (-3% YoY)29.6 (-2.3% YoY)49.65 (+81.3% YoY)NPI (S$ m)62.8 (+6.9% YoY)78.3 (+14.3% YoY)82.1 (-7.3% YoY)40.58 (-3.1% YoY)27.4 (-2.8% YoY)31.8 (+148% YoY)DPU (S$ c)2.462 (+7.5% YoY)Not Disclosed2.050 (+95.2% YoY)3.16 (+1.9% YoY)3.38 (+0.7% YoY)0.09 (-18.2% YoY)NAV per Unit (S$)1.211.2381.190.821.980.0955P/B (x)2.120.830.850.952.380.64Occupancy (%)98.099.8 (Festival Walk)92.9 (Gateway Plaza)99.7 (Sandhill Plaza)98.2 (Japan Properties)95.7 (The Pinnacle Gangnam)Mid-5090.599.783.4Reversion (%)NA-34 (Festival Walk)-27 (Gateway Plaza)-4 (Sandhill Plaza)+0.2 (Japan Properties)Portfolio RevPAU: S$60 (-14% YoY)+5.4Not Disclosed3.4Gearing (%)36.741.835.937.13742.5Cost of Debt (%)1.51.871.62.820.566.471 Yr Fwd Yield (%)3.916.84.167.772.975.5 (annualized 1H21)Debt Hedged (%)67825084.78280.6Target PriceNAN/ANAN/AN/AN/ARatingNAN/ANAN/AN/AN/A

ASEAN Builder's Scoop (27Jul21) - KDCREIT Maiden China Acq

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ascott-residence-trust" target="_blank" data-smartkarma-citation="entities:6560" rel="noopener">Ascott Residence Trust (ART SP)</a> acquires three Japan rental housings for JPY6.78bn (S$85.2m); DPU accretive by +2.6%</h3><ul><li>ART has entered into agreements to acquire three freehold rental housing properties in central Sapporo for a total of JPY6.78bn (S$85.2m). The three rental housing properties – City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo came from unrelated third parties. The average EBITDA yield of the three acquisitions is ~4%. On a FY2020 pro forma basis, this transaction is expected to be DPS accretive by +2.6% with expected completion by end Jun21. This transaction will be funded by debt and part of the net proceeds from recent divestments of Somerset Xu Hui Shanghai. The exit yield was ~2% and ART has received net proceeds of RMB953.9m (~S$196.8m) and realized a net divestment gain of RMB582.6m (~S$120.2m)</li><li>The three rental housing properties with a total of 411 units will increase ART’s portfolio in Japan to over 4,500 units in 22 serviced residences, hotels and rental housing properties in nine cities. ART will have a total of 14 rental housing properties in Japan including four in Sapporo. The three rental housing properties will be managed by a local property manager, Kabushiki Kaisha Big Service, which is also the current property manager for ART’s rental housing property in Sapporo, Big Palace Kita 14 jo.</li></ul>

SingaporeAscott Residence Trust (ART SP) acquires three Japan rental housings for JPY6.78bn (S$85.2m); DPU accretive by +2.6%ART has entered into agreements to acquire three freehold rental housing properties in central Sapporo for a total of JPY6.78bn (S$85.2m). The three rental housing properties – City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo came from unrelated third parties. The average EBITDA yield of the three acquisitions is ~4%. On a FY2020 pro forma basis, this transaction is expected to be DPS accretive by +2.6% with expected completion by end Jun21. This transaction will be funded by debt and part of the net proceeds from recent divestments of Somerset Xu Hui Shanghai. The exit yield was ~2% and ART has received net proceeds of RMB953.9m (~S$196.8m) and realized a net divestment gain of RMB582.6m (~S$120.2m)The three rental housing properties with a total of 411 units will increase ART’s portfolio in Japan to over 4,500 units in 22 serviced residences, hotels and rental housing properties in nine cities. ART will have a total of 14 rental housing properties in Japan including four in Sapporo. The three rental housing properties will be managed by a local property manager, Kabushiki Kaisha Big Service, which is also the current property manager for ART’s rental housing property in Sapporo, Big Palace Kita 14 jo.

ASEAN Builder's Scoop (1June21) - ART Acquires 3 JP Rental Housings

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> to acquire HP Tokyo HQ building for S$474.7m; DPU accretive by +2.4%</h3><ul><li>MAGIC has entered into an agreement to buy 98.47% effective interest in a freehold single-tenanted office building in Tokyo at an agreed property value of JPY38.8bn (S$474.7m). The property is now used as Hewlett-Packard Japan headquarters from Hulic Co, an unrelated third party vendor. The balance effective interest of 1.53% in the property will be held by Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly-owned subsidiary of Mapletree Investments, MAGIC’s sponsor</li><li>The property is 100% leased to Hewlett-Packard Japan and has a lease expiry of 8.8 years. The AUM of the enlarged portfolio will stand at S$8.4bn, or an increase of 6% from existing portfolio of S$7.9bn. Contribution from Japan will increase from 16.6% to 21.3% by AUM, or an increase from 22.4% to 26.7% by NPI</li><li>MAGIC intends to finance the purchase and relevant costs through a combination of debt financing and issuance of perpetual securities. The estimated NPI yield is 3.7%. On a FY21 pro-forma basis, the acquisition is expected to be DPU accretive by +2.4%</li><li>Aggregate leverage post acquisition is expected to be 41.9%, up marginally from 41.5%. Completion is subject to the conditions being fulfilled and is expected to take place by 30Jun.</li></ul><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/210/110/original/image003.png?1622425518" class="editor-image img-responsive" data-smartkarma-image-id="210110"></figure></section>

SingaporeMapletree North Asia Commercial Trust (MAGIC SP) to acquire HP Tokyo HQ building for S$474.7m; DPU accretive by +2.4%MAGIC has entered into an agreement to buy 98.47% effective interest in a freehold single-tenanted office building in Tokyo at an agreed property value of JPY38.8bn (S$474.7m). The property is now used as Hewlett-Packard Japan headquarters from Hulic Co, an unrelated third party vendor. The balance effective interest of 1.53% in the property will be held by Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly-owned subsidiary of Mapletree Investments, MAGIC’s sponsorThe property is 100% leased to Hewlett-Packard Japan and has a lease expiry of 8.8 years. The AUM of the enlarged portfolio will stand at S$8.4bn, or an increase of 6% from existing portfolio of S$7.9bn. Contribution from Japan will increase from 16.6% to 21.3% by AUM, or an increase from 22.4% to 26.7% by NPIMAGIC intends to finance the purchase and relevant costs through a combination of debt financing and issuance of perpetual securities. The estimated NPI yield is 3.7%. On a FY21 pro-forma basis, the acquisition is expected to be DPU accretive by +2.4%Aggregate leverage post acquisition is expected to be 41.9%, up marginally from 41.5%. Completion is subject to the conditions being fulfilled and is expected to take place by 30Jun.

ASEAN Builder's Scoop (31May21) - MAGIC Acquires HP Tokyo HQ Building

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

Singapore

Operates as a real estate investment trust which invests in commercial properties

Mapletree North Asia Commercial Trust (MAGIC SP)

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Mapletree North Asia Commercial Trust (MAGIC SP)

ASEAN Builder's Scoop (29Oct21)

SGREIT little help from VTL; CDREIT QoQ improvements across the board; FEHT stabilizing QoQ hotel metrics; FHT signals worst is over; MAGIC weak...

SCCM Asia Research

ASEAN Builder's Scoop (27Jul21) - KDCREIT Maiden China Acq

KDCREIT maiden China acq; MAGIC improvements seen at FW; ART recovery momentum continues; KORE occupancy weakness; PLIFE flattish quarter; LMRT...

SCCM Asia Research

ASEAN Builder's Scoop (1June21) - ART Acquires 3 JP Rental Housings

ART acquires 3 JP rental housings; MAGIC inaugural 3.5% perps; PropertyGuru expands further in MY, TH; MSGB on-track to meet FY21 sales target

SCCM Asia Research

ASEAN Builder's Scoop (31May21) - MAGIC Acquires HP Tokyo HQ Building

MAGIC acquires HP Tokyo HQ building; CIT is not pressured to sell assets; Keppel Land expands in HCM; Indo 1Q21 resi sales +14% YoY; EAST dips back...

SCCM Asia Research

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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