Featured Reports

Singapore REITs Monthly – More clarity as the dust settles

Natalie Ong | Phillip Securities Research | May 19, 2020 290

FTSE S-REIT Index gained +1.4% MTD after rebounding from the lows seen on 23 March 2020. Strongest gains MoM were from the industrial subsector (+3.0%) and weakest performance at the hospitality subsector (-18.5%).
Sector yield spread of 442bps over the benchmark 10-year SGS (10YSGS) yield was at the +1.4 standard deviation (SD) level.
Remain OVERWEIGHT on SREITs sector with sub-sector preferences in Office and Industrial portfolios.

PropNex Ltd – Earnings almost tripled but outlook cloudy

Paul Chew | Phillip Securities Research Pte Ltd | May 20, 2020 160

1Q20 PATMI jumped almost 3x YoY to S$7.6mn. It beat our expectations. The growth came from three-fold spike in project marketing (i.e. new launches) revenue.
The outlook will be weak for this year. The circuit breaker, weaker economic conditions and higher priced projects will lead to a contraction in the number of transactions. We cut our FY20e earnings by 19%. Earnings impact will only be registered in 2H20e.
Net cash continues to pile up to S$89.8mn (+S$10mn YoY) in 1Q20 and almost 50% of the market capitalisation.
We maintain our BUY recommendation. Our target price is lowered to S$0.60 (previously S$0.70). The outbreak has tempered any growth expectations we had for the company. PropNex retains a healthy market share of around 50% and we expect dividends (S$13mn p.a.) can be maintained with the large cash hoard of S$89.8mn.

ComfortDelGro Corp Ltd – Pain everywhere

Paul Chew | Phillip Securities Research Pte Ltd | May 26, 2020 81

Revenue and PATMI were below expectations. 1Q20 PATMI fell 49% YoY, dragged down by taxi profits declining 92% YoY. The full impact of circuit breaker and rental rebates to taxi drivers in Singapore will occur in the following quarter.
Comfort will be providing a total of S$116mn worth of taxi rental rebates. Rebates started in mid-February and will end in September. The bulk of the rebates will occur in 2Q20 when 100% waiver of rent is given for almost two months.
The taxi operations will be loss-making in FY20 due to the rebates. The rental relief from Comfort will help retain taxi drivers longer than competitors. We expect the path to recovery will be gradual. Social distancing behaviour, working from home and the decline in tourist will all weight on passenger volumes. We downgrade to NEUTRAL with a lower target price of S$1.50 (prev: $2.20). Our PATMI for FY20e is slashed by 62%. It excludes the job support scheme to be received from the government.

CapitaLand Limited – Building resilience and looking for opportunities

Natalie Ong | Phillip Securities Research | May 11, 2020 296

Recurring income from fees to provide stable cashflows.
COVID19 impact mitigated by diversification - Commercial and Industrial sectors showing resilience while Lodging and Retail sectors were impacted the most.
Maintain BUY with lower TP of S$3.94 (prev. $4.20), after incorporating the lower revised valuations for the REITs. We lower our FY20e revenue by 14.1% as we factor in the lower earnings from the rental rebates offered and weaker lodging revenues.

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Featured Reports

Singapore REITs Monthly – More clarity as the dust settles

PropNex Ltd – Earnings almost tripled but outlook cloudy

ComfortDelGro Corp Ltd – Pain everywhere

CapitaLand Limited – Building resilience and looking for opportunities

Singapore REITs Monthly – More clarity as the dust settles

PropNex Ltd – Earnings almost tripled but outlook cloudy

ComfortDelGro Corp Ltd – Pain everywhere

CapitaLand Limited – Building resilience and looking for opportunities

Singapore REITs Monthly – More clarity as the dust settles

PropNex Ltd – Earnings almost tripled but outlook cloudy

ComfortDelGro Corp Ltd – Pain everywhere

CapitaLand Limited – Building resilience and looking for opportunities

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