Compiled by Navin Sregantan
STARHILL GLOBAL REIT | BUY (MAINTAINED)
APRIL 29 CLOSE: $0.755
FAIR VALUE: $0.80
OCBC Investment Research, April 29
Starhill Global Reit's results met our expectations.
Distribution per unit rose 0.9 per cent to 1.1 cents; this was the first positive year-on-year growth since Q2 2016, albeit from a low base.
Operationally, management offered more competitive rents to boost the committed occupancy of Wisma Atria Property (Retail) to 99 per cent.
As most of the committed leases would commence in Q4 2019, this should provide sequential improvement ahead.
Management also highlighted its intention to deploy its 100,000 sq ft of unutilised floor area at Wisma Atria.
More concrete plans will be released over the next six months, pending discussions with the relevant authorities. This would provide further upside in the medium-to-longer term.
With regards to the Starhill Global Reit's new conditional master tenancy agreements with its sponsor for its two Malaysia properties, we are largely positive as this lifts the overhang surrounding the Reit (assuming unitholders' approval is obtained), and will also provide strong earnings visibility.
SHENG SIONG GROUP | BUY (MAINTAINED)
APRIL 29 CLOSE: $1.04
TARGET PRICE: $1.25
DBS Equity Research, April 29
First-quarter earnings of $19.4 million (up 5.9 per cent year on year) and revenue of $251 million (up 10.1 per cent year on year) were in line with our expectations.
Sheng Siong's growth will continue to be led by new stores.
Ten new stores opened last year, and will contribute for the full 12 months this year; three new stores will contribute from Q2.
A second store in Kunming, China will also open in the second half of the year.
We do not think online grocery retail will pose a serious threat to Sheng Siong for now.
We believe that, with its decent store network and logistics chain, it could be a takeover target for online players eventually.
There is scope for higher dividend payout if there is excess cash on its books.
We continue to like the stock for its defensive qualities including stable earnings, net cash balance sheet, cash generating abilities, and decent dividend yield.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision.
The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.