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CGS INTERNATIONAL |
CGS INTERNATIONAL |
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ESR-REIT Core DPU recovery underway
■ EREIT posted 4.5% yoy growth in 1H26 core DPU to 11.250 Scts, with gross DPU up 2.4% yoy to 11.510 Scts, despite income loss from divestments. ■ Portfolio occupancy stood at 91.3% (-0.3% pt) in 1H26, while EREIT reported strong positive yoy reversion of +9.2%, led by its logistics segment (+13.2%). ■ Maintain Add. Capital recycling is now visible, with redeployment into its Melbourne logistics portfolio at +5.1% pro forma DPU accretion.
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CapitaLand Ascott Trust Weathering the transition
■ We deem 1H26 DPU of 2.53 Scts as in line at 41% of our FY26F forecast. ■ CLAS reiterated that FY26F distributions are expected to remain stable, even with near-term AEI drag, acquisition and divestment timing mismatches. ■ Maintain Add as we expect FY26F dividend yield of 6.7%, with an unchanged DDM based TP of S$1.13 (COE: 7.4%).
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| CGS INTERNATIONAL | CGS INTERNATIONAL |
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DFI Retail Group Re-rating likely on raised guidance
■ 1H26 underlying net profit of US$117m was in line with our estimates, supported by improved operations and lower finance costs. ■ DFI tightened and raised its FY26 net profit guidance to US$285m-305m, signalling its confidence amid a challenging macro environment. ■ Strong results could assuage investor concerns on execution, likely re-rating the stock following recent weakness. Reiterate high conviction Add call.
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Singapore Airlines Net loss in Apr-Jun 2026 as fuel cost spiked
■ SIA reported 1QFY3/27 EBIT of S$106m and net loss of S$76m vs. our preview expectations of S$650m EBIT and S$150m net profit. ■ The unfavourable gap against our expectations was due to a lower-thanexpected yield passthrough of higher jet fuel prices. ■ Retain Hold with S$7.65 TP (1.45x P/BV, +2 s.d. above mean since 2001). ■ We think SIA will deliver a sequential recovery in 2QFY27F as fuel prices have corrected while travel demand has remained strong.
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| UOB KAYHIAN | UOB KAYHIAN |
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Aztech Global (AZTECH SP) 2Q26: Weak Results And Outlook As Competition Heats Up; Downgrade To HOLD
Highlights • 2Q26 earnings of S$5.4m (-36% yoy; +35% qoq) are below our expectation, bringing 1H26 earnings of S$9.4m to form 22% of our full-year estimate. • Revenue declined by 40% yoy in 2Q26 due to reduced customer demand from higher competition. Aztech expects near-term demand softness in 2H26. • Downgrade to HOLD with a 45% lower target price of S$0.73. We cut 2026 and 2027 EPS by 54% and 41% to reflect the challenging business outlook.
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UI Boustead REIT (UIBREIT SP) 1QFY27: Yen Weakness Offset By Lower Electricity Tariff Highlights
• Lease commencement for a global e-commerce player was delayed by one month but occupancy at UIB Konan Phase 2 has improved to 100% since Jun 26. We trim our DPU forecast by 0.8% for FY27 and 1.2% by FY28 due to weakness in the Japanese yen against the Singapore dollar. • Investors have reacted violently to a slight miss in 1QFY27. Rent reversion for the Singapore portfolio should improve in 2HFY27. Development projects are scheduled for completion in 2Q27 for UIB Konan Phase 3 in Greater Osaka and 2Q28 for built-to-suit aerospace facility in Seletar Aerospace Park. • Maintain BUY. UIBREIT provides an attractive DPU yield of 9.0% for FY27 and 8.8% for FY28 (CLAR: 5.9%, AAREIT: 6.1%). Our target price of S$1.16 is based on DDM (cost of equity: 7.25%, terminal growth: 1.2%).
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