Brokers' take

Compiled by Claire Huang

SUNTEC REIT | HOLD

JULY 27 CLOSE: $1.925
TARGET PRICE: $1.95

UOB Kay Hian, July 27

The office segment and contributions from new acquisitions offset weakness from the retail segment.

Management expressed their commitment to increasing utilisation rates for Suntec City Mall by subdividing units and raising rents, while keeping the overall quantum affordable.

Suntec also expanded their footprint in Australia to 12 per cent from 8 per cent (in terms of gross asset value) with the distribution per unit or DPU-accretive acquisition of 477 Collins Street.

Maintain "hold" with a higher target price of $1.95.

MAPLETREE INDUSTRIAL TRUST | ACCUMULATE

JULY 27 CLOSE: $1.915
TARGET PRICE: $1.98

Phillip Securities Research, July 27

Its Q1-2018 gross revenue is in line with our forecast.

Q1-2018 DPU exceeded our forecast by 6.6 per cent from slower increase in property expenses.

It noted the portfolio weighted average rental reversion of -2 per cent for the quarter.

Raised FY18e/FY19e DPU forecast by 2.1 per cent/1.2 per cent, as we revised our property expense assumptions.

VIVA INDUSTRIAL TRUST | HOLD

JULY 27 CLOSE: $0.93
TARGET PRICE: $0.895

OCBC Investment Research, July 27

Viva Industrial Trust's (VIT) solid set of Q2-2017 results were within expectations. Q2-2017 DPU increased 6.3 per cent year on year to 1.861 Singapore cents, or 24.1 per cent of our full-year forecast.

We lower our cost of equity from 8.5 per cent to 8 per cent, following the successful completion of asset enhancement initiative (AEI) at Viva Business Park and the positive rental reversions expected for upcoming lease expiries in FY18 and FY19.

After adjustments, our fair value increases from $0.83 to $0.895. VIT currently enjoys an FY17F yield of 8.3 per cent.

Given that current price levels have exceeded our fair value, we downgrade VIT from "buy" to "hold".

SINGAPORE AIRLINES | HOLD

JULY 27 CLOSE: $10.15
TARGET PRICE: $10.85

Maybank Kim Eng, July 26The long-haul market is brutal; perhaps the worst since the great financial crisis and, we cut our FY18-20 forecast earnings by 40 per cent, 39 per cent and 17 per cent to factor in the latest guidance on capacity growth, yield and fuel price assumptions.

We roll over our base valuation year to FY18 and peg to its long-term historical mean of 0.93 times price-to-book value. Our new fair value is $10.85. Maintain "hold".

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