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UOB KAYHIAN |
UOB KAYHIAN |
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Banking Dark Clouds Gathering On The Horizon
Highlights • The US and Japan are confronted with rising bond yields and a surge in interest payments. Both the US and Japan have not entered a fiscal or sovereign debt crisis, but they are starting to feel the financial strains. • The upward pressure on bond yields is exacerbated by elevated energy prices caused by the Middle East conflict, which is likely to be prolonged, as the US finds it increasingly difficult to extricate itself. • Downgrade to MARKET WEIGHT. Our preferred pick is OCBC (BUY/Target: S$32.50) for its diversified growth from wealth management (63% of its fee income), trading income and insurance. We downgraded DBS (HOLD/Target: S$74.70) as valuation is stretched with 2027 P/B at 2.97x.
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NTT DC REIT (NTTDCR SP) 1QFY27: A Journey Of A Thousand Miles Begins With A Single Step
Highlights • Portfolio occupancy would have increased 3.3ppt to 99.2% if we include committed leases that have yet to commence. Majority of these new leases are expected to contribute to revenue starting 3QFY27. • NTTDCR has debt headroom of US$261m based on gearing of 40%, which could be utilised to acquire a hyperscale 24MW DC in Frankfurt, Germany. • Maintain BUY with target price at US$1.31. We raised our weighted risk-free rate based on geographical disposition from 3.6% to 4.1% due to the recent increase in government bond yields.
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| UOB KAYHIAN | CGS INTERNATIONAL |
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United Hampshire US REIT (UHU SP) 1H26: Resiliency From Focus On Essential Services
Highlights • UHU generated DPU growth of 3.4% yoy in 1H26 with contributions from recently acquired Dover Marketplace and Wallingford Fair Shopping Center. • Portfolio occupancy remains high at 97.6%, and WALE was stable at 7.9 years for Grocery & Necessity properties. Tenants providing essential services accounted for 58.5% of gross rental income. • Valuation is attractive with a 2026 DPU yield of 9.0% (Kimco Realty: 4.7% and Regency Centers: 4.0%). Maintain BUY. Target price: US$0.69.
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Property - Overall Improved access to subsidised public flats
■ We do not expect higher income ceilings for the purchase of BTO flats to negatively impact private properties. ■ Reiterate Overweight with Add recommendations on CLI, CDL and UOL.
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| PHILLIP SECURITIES | PHILLIP SECURITIES |
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SATS Ltd Cargo and food strength offsets SoAJV decline
• 1Q27 revenue/PATMI rose 11.3%/5.9% YoY to S$1676.3mn/S$75.1mn, forming 28%/25% of FY27e forecast. Cargo volume rose 8.6% YoY, led by the Americas region, on strong demand for high-value, time-sensitive freight. Food solutions revenue rose 5.4% YoY, driven by a 16% growth in non-aviation food revenue.
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Wee Hur Holdings Ltd Potential dorm lease extension could be the next catalyst
▪ 1H26 revenue was within our expectations, at 55% of our FY26e forecasts. 1H26 adj. PATMI were below our expectations, at 44% of our FY26e forecasts. Property development revenue declined 27% YoY to S$29.6mn as the only outstanding Bartley Vue project achieved TOP in 1H26. The next property development project is the Upper Thomson Road project, with sales launching from 1H27e.
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