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/straits-trading-co-ltd" target="_blank" data-smartkarma-citation="entities:15745" rel="noopener">Straits Trading (STRTR SP)</a> acquires 2 freehold office buildings in Melbourne</li><li><a href="https://www.smartkarma.com/entities/first-sponsor-group-ltd" target="_blank" data-smartkarma-citation="entities:19779" rel="noopener">First Sponsor (FSG SP)</a> FY21 net profit up 18% YoY; Led by property development segment, hotels’ recovery underway in CN and EUR</li><li>SREIT ETFs picks up retail investors as net buy continues into 2022</li></ul>

Straits Trading (STRTR SP) acquires 2 freehold office buildings in MelbourneFirst Sponsor (FSG SP) FY21 net profit up 18% YoY; Led by property development segment, hotels’ recovery underway in CN and EURSREIT ETFs picks up retail investors as net buy continues into 2022

ASEAN Builder's Scoop (14Feb22) - STRTR Buys 2 Melbourne Offices

<ul><li><a href="https://www.smartkarma.com/entities/sabana-industrial-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:911" rel="noopener">Sabana Industrial REIT (SSREIT SP)</a> 2H21 DPU fell 31.4% YoY; Delivering on turnaround story  </li><li>Oakwood plans to open 20 new properties in 2022; Targets to double portfolio by 2025</li><li><a href="https://www.smartkarma.com/entities/hong-lai-huat-group-ltd" target="_blank" data-smartkarma-citation="entities:9115" rel="noopener">HLH Group (HLHG SP)</a> optimistic on Cambodian market recovery in 2022</li></ul>

Sabana Industrial REIT (SSREIT SP) 2H21 DPU fell 31.4% YoY; Delivering on turnaround story  Oakwood plans to open 20 new properties in 2022; Targets to double portfolio by 2025HLH Group (HLHG SP) optimistic on Cambodian market recovery in 2022

ASEAN Builder's Scoop (20Jan22) - SSREIT Delivering on Turnaround Story

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/aims-amp-capital-industrial" target="_blank" data-smartkarma-citation="entities:933" rel="noopener">AIMS APAC REIT (AAREIT SP)</a> to acquire Woolworths headquarters at 5.17% NPI yield; Accretive to DPU by 4.7%</h3><ul><li>AAREIT has acquired Woolworths headquarters for a purchase consideration of AUD463.25m (~S$454.0m) from Inmark Asset Management. The property is fully leased to Woolworths Group – Australia’s largest supermarket retailer, top 10 ASX listed companies. Woolworths HQ property is a corporate campus with a total site area of 90,010sqm and a total NLA of 44,972sqm. The current NLA provides for significant development potential to circa 180,000sqm based on the maximum allowable GFA. The purchase consideration of AUD463.25m excludes transaction costs of ~AUD31.0m. As such, the total acquisition cost is AUD494.25m (~S$484.4m)</li><li>The property has a long-term lease balance of 10 years and built-in rental escalation of 2.75% pa. Portfolio value will be enlarged by 26.6% to over S$2.28bn, while WALE will rise to 4.92 years. Portfolio occupancy will rise to 95.9% (from 95.7%) and master lease will represent 48% of total portfolio (from 38%)</li><li>The initial NPI yield is 5.17% and AAREIT plans to funding this acquisition through a combination of debt financing, recently issued S$250m perpetual securities, and potentially EFR. The funding structure utilising local debt financing (56%) and perpetual securities (44%) will bring aggregate leverage to 38.6% and result in DPU accretion of 4.7% on FY21 pro-forma basis. Upon settlement, the Manager has elected to receive the acquisition fee in AAREIT units</li><li>Following the completion of the proposed acquisition, AAREIT will have a total of 29 properties, of which 26 properties are located throughout Singapore (62%) and the remaining in Australia (38%).</li></ul>

SingaporeAIMS APAC REIT (AAREIT SP) to acquire Woolworths headquarters at 5.17% NPI yield; Accretive to DPU by 4.7%AAREIT has acquired Woolworths headquarters for a purchase consideration of AUD463.25m (~S$454.0m) from Inmark Asset Management. The property is fully leased to Woolworths Group – Australia’s largest supermarket retailer, top 10 ASX listed companies. Woolworths HQ property is a corporate campus with a total site area of 90,010sqm and a total NLA of 44,972sqm. The current NLA provides for significant development potential to circa 180,000sqm based on the maximum allowable GFA. The purchase consideration of AUD463.25m excludes transaction costs of ~AUD31.0m. As such, the total acquisition cost is AUD494.25m (~S$484.4m)The property has a long-term lease balance of 10 years and built-in rental escalation of 2.75% pa. Portfolio value will be enlarged by 26.6% to over S$2.28bn, while WALE will rise to 4.92 years. Portfolio occupancy will rise to 95.9% (from 95.7%) and master lease will represent 48% of total portfolio (from 38%)The initial NPI yield is 5.17% and AAREIT plans to funding this acquisition through a combination of debt financing, recently issued S$250m perpetual securities, and potentially EFR. The funding structure utilising local debt financing (56%) and perpetual securities (44%) will bring aggregate leverage to 38.6% and result in DPU accretion of 4.7% on FY21 pro-forma basis. Upon settlement, the Manager has elected to receive the acquisition fee in AAREIT unitsFollowing the completion of the proposed acquisition, AAREIT will have a total of 29 properties, of which 26 properties are located throughout Singapore (62%) and the remaining in Australia (38%).

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<p>We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.</p>

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.

The Stocks to Own in Thailand – Vol. 32

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Bottom-Up

<p><em><strong>Property Grid</strong></em> is a new product from <em>MCorp Review</em> in 2021 to focus on Thai property. In our debut piece, we start off by visit two property companies, namely Pruksa (the leader in low-end housing) and Noble, a high-end developer touted by several brokers in late 2020.</p><ul>
<li>
<strong>Noble reported </strong>9M'20 net income of Bt1.24bn on the back of Bt7.4bn revenue, roughly double of last year's. The company has also been moving down-market into the affordable Nue segment and hopes to deliver Bt10bn by the end of this year.</li>
<li>Noble is also buying a 20% stake in SWP from SAWAD and simultaneously doing a 3-for-1 split and rights issue. Wow! Guess there's no rest for the wicked!</li>
<li>
<strong>Pruksa reported </strong>Q3'20 earnings of Bt603m (up 45% QoQ, down 34% YoY) on the back of Bt6.35bn revenues (up 3% QoQ, down 25% YoY). The developer treaded water as it discounted projects to get sales going, though it managed to check its leverage and cost of debts.</li>
</ul>

Property Grid is a new product from MCorp Review in 2021 to focus on Thai property. In our debut piece, we start off by visit two property companies, namely Pruksa (the leader in low-end housing) and Noble, a high-end developer touted by several brokers in late 2020.

Noble reported 9M'20 net income of Bt1.24bn on the back of Bt7.4bn revenue, roughly double of last year's. The company has also been moving down-market into the affordable Nue segment and hopes to deliver Bt10bn by the end of this year.
Noble is also buying a 20% stake in SWP from SAWAD and simultaneously doing a 3-for-1 split and rights issue. Wow! Guess there's no rest for the wicked!

Pruksa reported Q3'20 earnings of Bt603m (up 45% QoQ, down 34% YoY) on the back of Bt6.35bn revenues (up 3% QoQ, down 25% YoY). The developer treaded water as it discounted projects to get sales going, though it managed to check its leverage and cost of debts.


Property Grid Introduces Pruksa and Noble

Thailand

SC Asset Corporation Public Company Limited develops real estate properties for sale and rental.  The Company owns and manages Shinawatra Tower III office building. Additionally, SC Asset and its subsidiaries own Shinawatra Tower I and Shinawatra Tower II office buildings, develop single house, condominium and office building projects, and provide management consultant services.

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SC Asset Corp (SC TB)

ASEAN Builder's Scoop (14Feb22) - STRTR Buys 2 Melbourne Offices

Retail investors net BUY the SREITs sector; SC targets THB22bn in presales and revs; PRMX to complete San Juan tower; Klang Valley incoming retail...

SCCM Asia Research

ASEAN Builder's Scoop (20Jan22) - SSREIT Delivering on Turnaround Story

SSREIT delivering on turnaround story; Oakwood targets double portfolio by 2025; HLHG bullish on Cambodia; MEG buys 2.2ha MJC property for...

SCCM Asia Research

ASEAN Builder's Scoop (1Oct21)

AAREIT acquires Woolworths HQ, DPU accretive by +4.7%; Luxury condo prices climbing 5.2% YoY in 3Q21; Mapletree buys S$4bn US logistics assets; SC...

SCCM Asia Research

The Stocks to Own in Thailand – Vol. 32

A. Stotz Thai Portfolio: We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology.

A. Stotz Investment Research

Property Grid Introduces Pruksa and Noble

Property Grid is a new product from MCorp Review in 2021 to focus on Thai property. We focus on Noble and Pruksa, Thailand's leader in low-end...

Athaporn Arayasantiparb, CFA

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