Singapore

• 5 S-Reits with year-on-year improvements in H1 2023 DPU Among them, 10 S-Reits reported higher year-on-year (yoy) net property income (NPI) for the half-year period ended Jun 30, 2023.
• CDL Hospitality Trusts’ H1 2023 NPI increased by 23.3 per cent yoy, largely attributed to Singapore, Japan, Australia, Europe and UK markets.

• We expect Shopee’s competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.
• Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.
• We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee’s growth expectations for the next 3 years.

• Grab recently announced the acquisition of Trans-cab in Singapore, the 3rd largest taxi operator there. This will help to solve driver shortage issues and improve cost efficiencies.
• Taxis pay the lowest COE prices plus Grab can improve the productivity of taxi drivers through access to the Grab app. Trans-cab gives Grab access to street hailing. 
• Grab‘s Singapore digital bank recently raised new capital but has also seen its deposit cap lifted significantly, which is helping to significantly boost deposit growth.

• NEU Battery Materials, a Singapore-based lithium-ion battery recycling startup, has secured US$3.7 million in an oversubscribed seed funding round led by SGInnovate.
• ComfortDelGro Ventures, Shift4Good, Paragon Ventures I, and other angel investors also joined.
• These funds will accelerate the deployment of NEU Battery Materials’s automated recycling line, which will lower operational manpower requirements.

• NodeFlair, a Singapore-based career advancement platform for tech talents, announced today that it has raised US$2 million Series A funding.
• The funding round was led by Iterative with participation from 500 Global and PERSOL VENTURE PARTNERS, the corporate venture capital arm of HR management group PERSOL.
• Prominent angel investors Quek Siu Rui (CEO & Co-founder of Carousell), JJ Chai (CEO & Co-founder of Rainforest), and Siew Kum Hong (Former COO of AirBnB China) also participated in the funding round.

• Needle, an AI-powered marketing platform from Singapore, has raised US$1.2 million in its pre-seed round led by Iterative, with participation from Ethos Fund and Goldbell Financial Services. Angel investors, including Rainforest founder JJ Chai, also joined the round.
• The fresh capital will be used to expand Needle’s team, consisting of data scientists, AI trainers, and engineers.
• Needle helps ecommerce brands optimize their marketing activities. By analyzing data from various platforms, Needle provides personalized recommendations and automates campaign creation, helping firms reduce costs and improve return on investment.

• SINGAPORE-LISTED real estate investment trusts (S-Reits) continue to hold up despite decelerating global growth, with the iEdge S-Reit Index generating 2.1 per cent in total returns in the first half of 2023, outperforming the Straits Times Index’s 1.2 per cent and the FTSE EPRA Nareit Asia ex Japan Index’s -1.7 per cent.
• The 10 S-Reits were Keppel DC Reit, Cromwell European Reit (Cromwell E-Reit), Frasers Logistics & Commercial Trust, Frasers Hospitality Trust, Paragon Reit, Frasers Centrepoint Trust, Aims Apac Reit, ParkwayLife Reit, CapitaLand India Trust, and CapitaLand Ascott Trust.
• Outperformance was driven across specialised, healthcare and hospitality sub-sectors at 7.5 per cent, 5.2 per cent, and 4.1 per cent total returns respectively.

• Union Gas Holdings’ Teo Hark Piang ups stake to 8.05% Seatrium, Wilmar International, Singapore Airlines (SIA), UOL Group and DBS Group led the net institutional inflow for the five sessions.
• With over 40 years of operating track record, Union Gas Holdings’ three key businesses comprise liquefied petroleum gas (LPG), natural gas, and diesel.

• It attracts investors when a company’s 15-year ROCE averages over 25% (and has never gone below 20%). Sheng Siong (SSG SP) is one of those companies.
• With 13% of the market capitalization in net cash (283 mn SGD) and a payout ratio averaging 70%, the stock trades at a yield of almost 4%.
• We believe the store expansion of 3-4 stores/year ( on a base of 67) in Singapore is possible, given the pipeline of HDB tenders.

• The Monetary Authority of Singapore (MAS) recently launched a public consultation regarding a Code of Conduct for ESG ratings providers and ESG data product providers in Singapore.
• It is the right approach for Singapore – a voluntary best-practices framework furthering one of the world’s most credible “green” economies, not a regulatory force-fix of something broken.
• No surprise ratings methodology changes. No en masse upgrades/downgrades. No acute shocks to the system. Just slow and steady progress for ESG investing and finance in Singapore.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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