Path to prosperity

The airline industry has been one of the most badly hit by the Covid-19 pandemic as international air travel ground to a halt. Even as there are green shoots of recovery in the economy and green lanes are opening up, air travel is still >90% down from pre-Covid levels. In light of this, investors have been reconsidering their stakes in the industry. I...

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As the world experiences an uneven recovery from the Covid-19 virus, investors continued to pile into markets driving the S&P and NASDAQ indices to all-time highs. The divergence between reality and stock markets have been explained by some as the lack of any viable alternatives for return as interest rates have plummeted. On the S-REITs front, industrial REITs have continued their outperformance while hospitality...

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PropNex released its 1H20 financial results and reported a 151% surge in net profit after tax to $16.0m. According to PropNex the key driver of earnings growth was the project marketing services segment, which had revenue growth of $75.1m vs total revenue growth of $75.2m. As this is a higher margin segment relative to the resale market, there was an increase in gross...

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Ascendas REIT announced their results about 2 weeks ago and reported a 3.7% growth in distributable income but a 10.8% yoy decline in 1H20 DPU. Broadly speaking results were seen as positive despite the Covid-19 pandemic raging on in other sectors. Positive rental reversions, especially in business parks, were encouraging and gearing of 36.1% continues to provide AREIT with a healthy debt headroom...

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Frasers Logistics & Commercial Trust (FLCT) announced its 3QFY21 business update last evening. This is the first set of 'results' announced after the completion of the merger between FLT and FCOT. Due to the larger entity and mix, most of the yoy comparisons are not that meaningful since all show a huge increase due to the merger. To better assess how FLCT performed,...

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Singapore Airlines (SIA) released its 1QFY21 results this evening. SIA reported a 99.5% decline in passenger volumes which led to the headline $1bn net loss. While passenger volumes across its different segments fell by >99%, cargo performed better with a 55% fall in cargo and mail carried. Quite interesting to have your volumes decline by >50% but still be the best performing segment....

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Ascott announced its results earlier today and it wasn't pretty. Ascott had earlier set out profit guidance that distributable income could drop between 55-65% and DPU could decline by 65-75% for 1H2020. Looking at the actual results, the guidance was fairly accurate as DI declined by 56% while DPU dropped by 69%. I believe the decline would have been even worse if Ascott had...

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Yesterday both Keppel DC REIT (KDCREIT) and Mapletree Industrial Trust (MINT) released their results for the quarter ending Jun2020. Both REITs have performed strongly after their end-Mar lows due to their exposure to data centres. MINT has performed more strongly even though it only has a 32% exposure (by AUM) to data centres vs KDCREIT's 100% exposure. I think this could be due...

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Today in addition to Keppel REIT releasing results, CCT also released the minutes of their AGM. Both events can help give investors an insight into what has happened in the office market and what we can expect going forward. This article will attempt to summarize some of the key points from the two releases. 1. Slower leasing and a shift to renewalsThe pace of...

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In the past week or so we have had companies coming out to give profit guidance. A profit guidance is issued when a company feels that the market expectations of its financials are significantly over or understated and needs analysts to realign their forecasts. This article will focus on the 3 travel-related companies that had such announcements. Ascott REITAscott issued a profit warning at...

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This morning ESR REIT announced a proposed merger with Sabana REIT. Transaction details0.94 new ESR REIT units for every 1.0 Sabana units held. This is an all-stock deal with no cash consideration to be paid out (unlike the previous ESR-Viva deal). ESR units would be issued at an indicative price of $0.401 (vs last traded at $0.39) while this implies a $0.377 price (vs...

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SPHREIT released its 3QFY20 Business Update this evening. This comes after it shifted to half-yearly reporting; the link to the presentation can be found here. Would like to highlight a few things to take note of:1. DPU continues to be low but may not be because of a low payout ratioSPHREIT declared a DPU of 0.5 Scts for the quarter representing an increase...

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Following the private placement by MINT to acquire the remaining 60% of its first US Data Centre portfolio, other REITs with strong balance sheets made moves recently. Ascendas REITAREIT announced the acquisition of a yet-to-be-built logistics property in Sydney today (1 Jul 2020) for A$23.5m. The property will be developed by the Vendor and completed by 2Q2021. In the press release, AREIT mentioned that...

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Frasers Centrepoint Trust (‘FCT’) is a REIT that owns and operates 7 suburban malls in Singapore. FCT generates rental income from its malls that have a total of 1.4m sqft of net lettable area. The REIT is sponsored by Frasers Property Limited, which develops and manages a wide range of properties globally. While its share price has somewhat recovered, I think there is...

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