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PHILLIP SECURITIES |
PHILLIP SECURITIES |
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Lendlease Global Commercial REIT DPU is bottoming out
• Gross revenue for FY24 surged by 7.8% YoY to S$220.9mn, in line with our estimates which includes the €10mn pre-termination fee recognized from SKY Complex Building 3. • NPI and DPU missed our expectations by 6% due to elevated property operating expenses (which increased by 9.2% YoY), and rising financing costs (+32.8% YoY). Although the onetime €10mn pre-termination fee has been recognized, the distributable income will be adjusted to reflect amortization over a 2-year period. As a result, NPI and DPU stood at S$165.3mn (+7.4% YoY) and 3.87 cents (-17.7% YoY), respectively
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Keppel Ltd Real estate and legacy depressed earnings
▪ 1H24 revenue and adjusted PATMI was below expectations at 42%/37% of our FY24e forecast. Adjusted PATMI declined 25% YoY to S$346mn due to losses in the real estate division. Headline earnings was dragged down by legacy assets including fair value losses at Seatrium, Rigco notes receivables and Floatel associate losses. ▪ Asset management profits more than doubled in 1H24 from S$30mn to S$75mn. All the growth came from an 11-fold jump in fee income from the infrastructure division largely due to Keppel Infrastructure Trust's performance and management fees.
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UOB KAYHIAN |
UOB KAYHIAN |
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Lendlease Global Commercial REIT (LREIT SP) 2HFY24: Bumpy Contribution From Sky Complex But Backfilling In Progress
LREIT was hit by higher property tax and utilities costs. Distributable income was also affected by tenant incentives for Sky Complex apportioned to FY24. Management has secured new electricity tariff contracts for Jem and 313@Somerset, which reduces utilities expenses by 30% or S$4m-5m per year. Rents for the office block at Jem could be adjusted higher by 20% during a rent review at end-24. LREIT provides FY25 distribution yield of 6.9%. Maintain BUY. Target price: S$0.73.
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Sembcorp Industries (SCI SP) 1H24: A Resilient Performance That Beat Expectations
The resiliency of SCI’s business model came through in 1H24, with the company reporting a net profit of S$540m (+2% yoy) that beat our and market expectations. This was despite the maintenance shutdown of its Singapore cogeneration plant and weakness in its renewables business in China. SCI’s outlook remains robust with the reaffirmation of its renewables business’ targets and a new strategic plan to grow its integrated urban solutions business in SE Asia. Maintain BUY. Target price: S$7.47.
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| UOB KAYHIAN | CGS CIMB |
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Venture Corporation (VMS SP) 2Q24: Slight Earnings Miss Amid Sequential Improvement; Expect A Better 2H24
VMS’ 2Q24 earnings of S$64m (-4% yoy/+6% qoq) are slightly below our expectation of S$68m. The 1H24 earnings of S$124m (-12% yoy) met 44% of our full-year estimate. The sequential growth in 2Q24 was driven by the Advanced Industrial Technology, Semiconductor Related Products and Networking & Communications domains. VMS maintains its expectation that revenue will be stronger in 2H24 compared with 1H24. Maintain BUY with a 1% lower target price of S$16.17.
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Sembcorp Industries Diversified portfolio resilience
■ SCI revised its FY28F ROE target to 13% (from 12%) following a new target for its IUS business on improved recurring income and less capital in China. ■ We think the gas segment’s normalised profit could reach c.S$740m p.a. and RE curtailment risk can be cushioned by the 2.3GW new capacity in FY24F. ■ We raise TP to S$7.32 on EPS upgrade. Interim dividend payout ratio raised to c.20%, from c.15% a year ago, but we keep our 25% target payout.
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