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UOB KAYHIAN |
UOB KAYHIAN |
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CapitaLand Integrated Commercial Trust (CICT SP) 3Q25: Steady Execution, Resilient Portfolios
Highlights • Office occupancy improved 1.6ppt qoq to 96.2% in 3Q25, driven by new tenants at 100 Arthur Street in North Sydney and MAC in Frankfurt. • CICT benefits from a full year’s contribution of its 50% stake in ION Orchard in 2025, while CapitaSpring would contribute based on 100% interest starting from 26 Aug 25. • Maintain BUY. Target price: S$2.79
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UMS Integration (UMSH SP) Continued Production Ramp-up For New Customer But Order Slower Than Expected
Highlights • UMS continues to ramp up production and has successfully resolved various production issues for its new semiconductor customer. • UMS has built up sizeable inventories and is awaiting its new customer to pullin more orders in the coming quarter as the demand is slower than anticipated. • UMS expects to benefit from the AI-driven global chip sector rebound and the rising shift of global semiconductor supply chains. Maintain BUY and target price of S$1.73.
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LIM & TAN |
LIM & TAN |
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CapitaLand Ascott Trust / CLAS ($0.955, unchanged) has announced its 3Q 2025 numbers, where gross profit increased 1% year-on-year. Stronger operating performance, portfolio reconstitution and asset enhancement initiatives (AEI) drove the increase, mitigating the impact of depreciation of foreign currencies against the SGD. Capital Management: NAV per Stapled Security of S$1.13, with a low effective borrowing cost of 2.9% per annum. Effective borrowing cost expected to remain stable for the rest of 2025. Following the divestment of Citadines Central Shinjuku Tokyo (CCST) on 2 Oct 2025, CLAS’ gearing will decrease to c.38.8% and is expected to decrease further to c.37.2% when the divestment proceeds are used to pare down debt in 2Q 2026. At 95.5 cents, CLAS is capitalized at $3.6bln and trades at forward div yield of 6.4% and 0.8x price to book. Based on Bloomberg consensus 1 year target price of $1.06, upside potenƟ al is 11%. We continue to like the recycling initiatives from lower yielding matured assets to higher yielding stable and growth-oriented assets. Given its undemanding valuations and ability to benefit from resurgence of global tourism and also lower interest rates ahead, maintain “Accumulate” on CLAS.
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Driven by contribuƟ on from 255 George Street and higher occupancy at 2 Blue Street, Keppel REIT’s ($1.07, up 0.04) property income and NPI increased 5.5% and 8.6% year-on-year to $204.5 million and $161.3 million respecƟ vely for the fi rst nine months of 2025 (9M 2025). Marina Bay Financial Centre and One Raffl es Quay conƟ nued to record higher rentals and lower borrowing costs, liŌ ing the share of results of associates by 15.4% year-on-year to $75.4 million. Distributable income including Anniversary DistribuƟ on stood at $159.6 million for 9M 2025. Assuming management fees for 9M 2025 were fully paid in units, distributable income from operaƟ ons would have increased by 6.7% year-on-year. Keppel REIT’s performance came in within expectaƟ ons, thanks to the overall lower interest rate environment. Keppel REIT is trading at 5.2% yield, 0.9x book and consensus 1 year target price is around current price level. We believe Keppel REIT’s DPU is expected to remain stable given the more favourable interest rate environment and client demand profi les. We maintain our HOLD recommendaƟ on on Keppel REIT. |
| CGS CIMB | MAYBANK KIM ENG |
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Keppel Infrastructure Trust Diversification cushions performance
■ We think KIT's geographical and sectorial diversification helped 3Q25's FFO. ■ Australia Ixom and Ventura (25% of 9M25 FFO) were above our expectations while Korea EMK and the European windfarm portfolio (24%) were below. ■ Reiterate Add on FY25F DPU yield of 8.4%, with a higher TP of S$0.50 (pegged to 10.4x FY25F P/FFO) as we roll forward our P/FFO base.
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OUE REIT (OUEREIT SP) Resilient performance, upgrade to BUY
Stable operations, lower finance cost OUEREIT’s 3Q25 update reflects a stable top line with same-store NPI growth of 2% and a 19.7% decline in finance expenses. Its operating trend is relatively unchanged with stable occupancy for Singapore commercial assets and continued but moderated decline in hotel RevPARs. Gearing was stable while cost of debt declined and guided to further come off. We raise FY25E DPU by 2%, lower cost of equity, raise TP and upgrade to BUY.
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