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PHILLIP SECURITIES |
PHILLIP SECURITIES |
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Keppel DC REIT Accretive acquisitions power growth
▪ 1Q25 DPU of 2.503 Singapore cents (+14.2% YoY) was in line, forming 25% of our FY25e estimates. The YoY growth in DPU was driven by the acquisitions of KDC SGP 7 & 8 and Tokyo DC 1, as well as lower finance costs from reduced interest rates and loan repayments.
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Singapore REITs Monthly Expect share price volatility ahead
▪ The S-REITs Index gained 4.8% in March 2025, reversing the 2.9% decline in the previous month. The top performer for the month was Frasers Hospitality Trust (FHT SP, nonrated), gaining 14.4%, while the worst performer was Digital Core REIT (DCREIT SP, nonrated), falling 6.2%. Overseas diversified REITs were the top performers in March, gaining 6.6%, while the worst-performing sub-sector was overseas retail, which fell 2.5%.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Keppel DC REIT (KDCREIT SP) 1Q25: Contributions From SGP7 And SGP8 Kick In
KDCREIT reported a solid DPU growth of 14.2% yoy in 1Q25, which is in line with our expectation. Growth would have been more pronounced if not for elevated capex reserve, estimated at S$6m and equivalent to 10% of distributable income. The upsurge in positive rental reversion for colocation leases in Singapore is expected to continue in 2025 and 2026. Management is also mulling enhancing and expanding SGP1 into an AIcapable data centre. Maintain BUY with a target price of S$2.55.
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Singapore Telecommunications (ST SP) A defensive shield
Developed market telcos outshine amid uncertainty YTD, Singtel has outperformed its ASEAN peers and the local STI index by 23%. However, Singtel’s YTD performance is relatively inline with global developed market (DM) telcos (up 14% YTD) which outperformed the global MSCI index by 19ppt. DM telco’s defensive characteristics amid tariff/macro uncertainty and safe haven flows are tailwinds. Despite outperformance, we note that Singtel still has a >25% holdco discount while its 16% NPAT growth outlook and higher capital return potential (on top of 5% yield) remain upside catalysts. We reiterate our BUY on Singtel and raise our SoTP-based TP to SGD3.96, factoring in Bharti’s current market cap and the lift in our AIS and Optus valuations.
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| LIM & TAN | LIM & TAN |
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Oiltek’s market cap stands at $167.3mln and currently trades at 15.6x FY25 PE with a dividend yield of 2.8%. Our current target price stands at $1.50, representing 28.2% upside from current share price. We remain optimistic on Oiltek given it’s order-winning momentum, which enhances its revenue visibility amid Indonesia and Malaysia’s initiatives to increase biodiesel blend ratios. With Oiltek having received approval in principle to transfer its listing to the Mainboard, we believe it can now attract interest from funds that invest exclusively in Mainboardlisted companies, and together with the incoming 2 for 1 bonus issue, this bodes well for Oiltek’s share price moving forward. As such, we continue to maintain a BUY recommendation on Oiltek with a TP of S$1.50, representing a 29.3% upside from current share price.
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At 33.5 cents, Geo Energy is capitalized at $474mln and trades at an undemanding forward consensus PE ratio of 5.3x. Price-to-book stands at 0.8x and dividend yield is 3%. We recommend a “Buy” rating for Geo Energy given that Bloomberg consensus 1 year target price is 59 cents, a 74% increase from its current share price level of 33.5 cents while earnings and dividend trajectory for the company is expected to be “exciting” for FY2025 with a significant expansion of production volumes. Validation of their new road infrastructure with potential injection of US$50-100mln by their substantial shareholder with a potential independent valuation of US$1.5bln by year end could be another re-rating catalyst. |
