Compiled by Lynette Tan
MAPLETREE INDUSTRIAL TRUST | BUY
TARGET PRICE: $2.75
SEPT 25 CLOSE: $2.49
DBS Equity Research, Sept 25
We are firm believers of Mapletree Industrial Trust's (MINT) inorganic growth strategy, especially in the US, coupled with a focus on redevelopments in Singapore. The manager's well-timed acquisitions and completions/initiation of new development projects underpin a steady growth profile.
Most importantly, the constant upgrading and refreshing of the portfolio will enable MINT to be more resistant to business cycle fluctuations. Over time, with a pipeline of data centres from the sponsor, we estimate that about 82 per cent (versus 71 per cent currently) of its portfolio will be derived from high-specification/business parks and data centres.
We like MINT for its pipeline of acquisitions (data centres) and ongoing portfolio upgrades through well-timed developments initiatives. We see the redevelopment of the Kolam Ayer flatted factory cluster into a high-specification building driving medium-term growth in distributions and net asset value. We see further opportunities to extract gross floor area from its portfolio (Kaki Bukit cluster the next property) which should continue to keep valuations at a premium.
MINT's resilience is a valued trait in this market which will keep its valuations higher. We maintain our "buy" call and raise our target price to $2.75 to reflect recent acquisitions. The key risk to our view is rising interest rates, where an increase in refinancing rates will be negative to distributions.
TARGET PRICE: $0.31
SEPT 25 CLOSE: $0.225
RHB Research Institute, Sept 25
ISOTeam recently secured $31.04 million worth of contracts involving project works from the different divisions within the group. The various contracts are expected to be completed between Nov 2019 and Mar 2021.
As at July 31, 2019, the orderbook was $113.5 million, a slight drop from $132.8 million as at Jan 31, 2019.
However, the intake this quarter has already surpassed four out of six half-year intakes during the FY2016-2018 period.
In addition, ISOTeam could be a key beneficiary of the Singapore general election as volume usually picks up pre- and post-election. We believe there will be upcoming initiatives to improve and enhance the liveability of the environment for residents.
We see more resilient earnings from ISOTeam as it is poised to ride on government initiatives, as well as the expansion plans of the two integrated resorts from the group's recent acquisition of Pure (if completed).
The acquisition of Pure has also turned ISOTeam into a turn-key commercial fitting-out solutions provider, improving the chances of winning more projects.
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