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PHILLIP SECURITIES |
CGS INTERNATIONAL |
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Frasers Centrepoint Trust Back to 99.9% occupancy
▪ No financials were provided in the 1Q26 business update. Retail portfolio occupancy was unchanged QoQ at 98.1% but improved to 99.9% post-1Q26 following the backfilling of cinema spaces at Causeway Point and Century Square.
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ST Engineering Scarcity premium, sizeable defence win
■ We estimate the latest Terex s5 Infantry Fighting Vehicles contract that STE won from Singapore Ministry of Defence to be in the range of S$1bn-S$2bn. ■ This adds to its latest order book of S$32.6bn (as of 3Q25) and should sustain its earnings visibility delivery schedule beyond 2028F, in our view. ■ Maintain Add and raise our TP to S$10.20, now based on 30x FY27F P/E, or 3 s.d above its 17-year mean, in line with global peers.
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CGS INTERNATIONAL |
CGS INTERNATIONAL |
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Suntec REIT Singapore continues to outperform
■ 2H/FY25 DPU of 3.88/7.035 Scts was above expectations at 61.9%/112.2% of our FY25F forecast. ■ FY26F DPU growth will be driven by positive rental reversions for Singapore office and retail and moderated debt cost, in our view. ■ Upgrade to an Add rating with a higher DDM-based TP of S$1.58.
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Mapletree Logistics Trust Business as usual
■ 3Q/9MFY26 DPU of 1.816/5.443 Scts was broadly in line with expectations, at 24.3%/72.8% of our FY26F forecast. ■ Rental reversion remained at +1.7% (ex-China) while China’s negative reversion trajectory is moderating. ■ Reiterate an Add rating with an unchanged TP of S$1.68.
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| LIM & TAN | LIM & TAN |
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Nvidia Corp, the dominant maker of artificial intelligence chips, invested an additional $2 billion in the cloud computing fi rm and key customer CoreWeave Inc., marking the latest example of the circular fi nancing deals that have lifted valuations of AI companies and fueled concerns about a bubble.
Locally, Innotek is plugged into Nvidia’s supply chain as it is now a first tier supplier for Nvidia’s GPU components and also attempting to be qualified into Super-Micro’s liquid cooling GPU servers. Due to the fast growing AI GPU server market we had included Innotek as one of our top 2026 “Alpha” pick in Nov’25 when it was trading at 70 cents level, targeting it to hit $1 in 1 year. Yesterday, Innotek had surged 16% to hit a high of 94 cents, before closing at 92 cents giving it a market value of $215mln. While we are still optimistic on the mid-longer term outlook for Innotek, we are downgrading it to a “HOLD” given that it is closing in on its 2021 high of $1 as well as our 12 month target price of $1 and its FY2026 PE is now quite fair trading at 22x, putting it on par with Singapore’s largest manufacturing company Venture Corp ($4.8bln) now trading at 22x PE. Innotek’s yield is 2.2% versus Venture’s 4.5% at current price. Venture is only up 10% versus Innotek’s 42% year to date surge.
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OUE REIT (S$0.365, down 0.5cts) wishes to announce that the Distributi on per Unit (“DPU”) increased by 10.6% year-on-year (“YoY”) to 1.25 Singapore cents for the financial period 1 July 2025 to 31 December 2025 (“2H 2025”). The robust performance was mainly driven by continued resilient operating performance across the portf olio, alongside a strengthened capital structure, which allowed OUE REIT to benefit from the lower interest rate environment. Excluding the capital distributi on released in the second half of 2024 (“2H 2024”), core DPU increased by 15.7% YoY. OUE REIT’s market cap stands at S$2.0bln, and trades at 0.65x P/B with a dividend yield of 6.1%. Performance remains resilient with its stronger commercial segment complemented by a recovering hospitality segment, in particular the second half of 2025. Despite the divestment of Lippo Plaza Shanghai in 2024, OUE REIT sees an 8% growth in full year FY25 DPU to 2.23 cts as it benefi ts from an 18% drop in finance costs. Possible expansion opportunities in key gateway cities include prime CBD properties in Australia. Consensus TP of $0.39 represents a potenti al 6.8% upside. We upgrade from “Accumulate on Weakness” to “Accumulate” in view of its decent yield, low P/B and beneficiary of a lower interest-rate environment. |
