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><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/236/273/original/image_54776601321634694560432.png?1634694565" class="editor-image img-responsive" data-smartkarma-image-id="236273"></figure><ul><li><h3></h3><a href="https://www.smartkarma.com/entities/ascendas-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:39" rel="noopener">Ascendas Real Estate Investment Trust (AREIT SP)</a> 3Q21 Business Updates; Robust reversions while on virtuous cycle of inorganic growth (BUY; TP S$3.55/unit)</li><li>3Q21 revenue, NPI and DPU were undisclosed. AREIT has completed the development of the Grab Headquarters, with a total development cost of S$184.6m. Divestment of two Australian logistics properties has also been completed at a price of S$104.5m (AUD101.6m)</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Ascendas Real Estate Investment Trust (AREIT SP) 3Q21 Business Updates; Robust reversions while on virtuous cycle of inorganic growth (BUY; TP S$3.55/unit)3Q21 revenue, NPI and DPU were undisclosed. AREIT has completed the development of the Grab Headquarters, with a total development cost of S$184.6m. Divestment of two Australian logistics properties has also been completed at a price of S$104.5m (AUD101.6m)

<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%).

<h2>Singapore</h2>
<h3>Ang Mo Kio 99-year private housing plot draws 15 bids while EC plot in Tengah draws seven bids</h3>
<ul>
<li>A 99-year leasehold private housing site in Ang Mo Kio Avenue 1, opposite the Bishan-Ang Mo Kio Park, has drawn 15 bids in a state tender. The highest bid of S$381.38m, or nearly S$1,118psf ppr, came from a 60:20:20 joint venture between UOL Group Ltd (UOL SP), Singapore Land Group Limited (SPLG SP) and Kheong Leong Company. This was 6.3% higher than the second highest bid of S$358.89m or S$1,052psf ppr from Titus Residential SG, a tie-up between City Developments Ltd (CIT SP) and MCL Land. Also bidding for the site was a tie-up between Far East Organisation, Sino Group and Sekisui House, which offered S$353.33m or $1,036psf ppr. UOL plans to develop a 24-25 storey project of more than 370 units that will enjoy unblocked views of the Bishan-Ang Mo Kio Park, Lower Peirce Reservoir Park and Shangri-la Park landed housing estate. It is also a timely replenishment for UOL’s land bank</li>
<li>Also closing was the tender for the maiden EC housing site in the Tengah estate. The 99-year leasehold plot in Tengah Garden Walk drew seven bids. The highest offer of S$400.3m, or S$603.17 psf ppr, was from a tie-up between CIT and MCL Land; it was just a tad higher than the nearly S$400.2m or S$602.99psf ppr from the second highest bid, from CSC Land Group. The top bid marks a record land rate for an EC site under the GLS programme. The previous high was S$583psf ppr garnered by the Sumang Walk EC site awarded in Mar18.</li>
</ul>

Singapore
Ang Mo Kio 99-year private housing plot draws 15 bids while EC plot in Tengah draws seven bids

A 99-year leasehold private housing site in Ang Mo Kio Avenue 1, opposite the Bishan-Ang Mo Kio Park, has drawn 15 bids in a state tender. The highest bid of S$381.38m, or nearly S$1,118psf ppr, came from a 60:20:20 joint venture between UOL Group Ltd (UOL SP), Singapore Land Group Limited (SPLG SP) and Kheong Leong Company. This was 6.3% higher than the second highest bid of S$358.89m or S$1,052psf ppr from Titus Residential SG, a tie-up between City Developments Ltd (CIT SP) and MCL Land. Also bidding for the site was a tie-up between Far East Organisation, Sino Group and Sekisui House, which offered S$353.33m or $1,036psf ppr. UOL plans to develop a 24-25 storey project of more than 370 units that will enjoy unblocked views of the Bishan-Ang Mo Kio Park, Lower Peirce Reservoir Park and Shangri-la Park landed housing estate. It is also a timely replenishment for UOL’s land bank
Also closing was the tender for the maiden EC housing site in the Tengah estate. The 99-year leasehold plot in Tengah Garden Walk drew seven bids. The highest offer of S$400.3m, or S$603.17 psf ppr, was from a tie-up between CIT and MCL Land; it was just a tad higher than the nearly S$400.2m or S$602.99psf ppr from the second highest bid, from CSC Land Group. The top bid marks a record land rate for an EC site under the GLS programme. The previous high was S$583psf ppr garnered by the Sumang Walk EC site awarded in Mar18.


ASEAN Builder's Scoop (27May21) - AMK Site Drew High 15bids

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106" rel="noopener">Mapletree Commercial Trust (MCT SP)</a> to provide more tenant support amid stricter Covid-19 measures</h3><p>MCT said it is committed to providing the necessary rental and operating assistance to its retail tenants as Singapore tightens its Covid-19 measures till 13Jun. Since the start of the pandemic, MCT has implemented support packages comprising more than S$70m of rental rebates to help eligible retail tenants offset, on average, more than four months of fixed rent. This includes the passing on of property tax rebates, cash grants from the government and other mandated grants to qualifying tenants. MCT's properties have implemented health and safety protocols.</p><p>Comments: Rental rebates are likely returning as F&amp;B tenants grapple with no-dining-in restrictions for ~1mo. We understand few tenants at Paragon have already requested for assistance but SPHREIT is still reviewing. We will keep track for every landlord’s decision and report accordingly.</p>

SingaporeMapletree Commercial Trust (MCT SP) to provide more tenant support amid stricter Covid-19 measuresMCT said it is committed to providing the necessary rental and operating assistance to its retail tenants as Singapore tightens its Covid-19 measures till 13Jun. Since the start of the pandemic, MCT has implemented support packages comprising more than S$70m of rental rebates to help eligible retail tenants offset, on average, more than four months of fixed rent. This includes the passing on of property tax rebates, cash grants from the government and other mandated grants to qualifying tenants. MCT's properties have implemented health and safety protocols.Comments: Rental rebates are likely returning as F&amp;B tenants grapple with no-dining-in restrictions for ~1mo. We understand few tenants at Paragon have already requested for assistance but SPHREIT is still reviewing. We will keep track for every landlord’s decision and report accordingly.

ASEAN Builder's Scoop (17May21) - MCT to provide more tenant supports

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>We initiate coverage with a Buy recommendation for OKJ, with a 2025E fair value of Bt8.69, using the earnings yield method, based on the projected earnings per share, discounted by a required rate of return of 5.4%.</li><li>OKJ operates a business focusing on providing premium food, beverages, and health products while building an environmentally conscious organic agricultural supply chain.</li><li>We expect OKJ's net profit to grow at a CAGR of 37%, increasing from Bt141mn in 2023 to Bt365mn in 2026E.</li></ul>

We initiate coverage with a Buy recommendation for OKJ, with a 2025E fair value of Bt8.69, using the earnings yield method, based on the projected earnings per share, discounted by a required rate of return of 5.4%.OKJ operates a business focusing on providing premium food, beverages, and health products while building an environmentally conscious organic agricultural supply chain.We expect OKJ's net profit to grow at a CAGR of 37%, increasing from Bt141mn in 2023 to Bt365mn in 2026E.

Ideology That Can Be Consumed - Fair Value 2025E: Bt8.69

Malaysia

Sunway Bhd. is a property development and construction company. The Company's other business divisions include quarrying and building materials trading and manufacturing, hospitality, leisure, and healthcare.

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Sunway Bhd (SWB MK)

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Ideology That Can Be Consumed - Fair Value 2025E: Bt8.69

We initiate coverage with a Buy recommendation for OKJ, with a 2025E fair value of Bt8.69, using the earnings yield method, based on the projected...

Krungthai XSpring

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