Compiled by Kenneth Lim
CAPITALAND MALL TRUST | OUTPERFORM
TARGET PRICE: S$2.32
AUG 25 CLOSE: S$2.11
Credit Suisse, Aug 25
After declining for two consecutive years, consumer confidence in Singapore has started rebounding, raising the sentiment from pessimistic to neutral in H1 2017.
CapitaLand has said it will collaborate with Lazada in Singapore - this will include having an online mall on Lazada.sg, which will aggregate the offerings of retailers in the malls of CapitaLand Mall Trust (CT) and CapitaLand and allow for click-and-collect services at their Singapore malls.
This will provide a competitive edge for tenants to be located in CT's malls and improve shopper traffic.
CT trades at a 2017 yield of 5.3 per cent, implying a yield spread of 3.1 per cent, which is 0.5 percentage points above its historical average spread.
We believe that CT will benefit from the improving consumer sentiment, and that the initiative will keep its malls competitive.
GUOCOLAND | BUY
TARGET PRICE: $2.80
AUG 25 CLOSE: $2.29
UOB Kay Hian Research, Aug 25
Guocoland is a key beneficiary of the property sector turnaround and rotational interest.
Overhang linked to litigation on Beijing Dongzhimen project ownership and high gearing has been removed, paving the way for a continued re-rating of the stock. Expect strong recurring earnings going forward, upon stabilisation of Tanjong Pagar Centre.
GuocoLand is trading at a deep 37 per cent discount to its revalued net asset value of $3.63 a share. Resume coverage with "buy".
FIRST REAL ESTATE INVESTMENT TRUST | HOLD
TARGET PRICE: $1.38
AUG 25 CLOSE: $1.34
OCBC Investment Research, Aug 25
PT Siloam International Hospitals TBK has released its H1 2017 operational update, which gave a mixed bag of indications.
Siloam appears to be looking to expand its network from its 31 hospitals to 50 in 25 cities by 2019, so the pool of Right of First Refusal assets for possible injection into First Reit in future will invariably expand.
First Reit is now trading at a FY17 forecast distribution yield of 6.3 per cent and a price-to-book ratio of 1.3 times.
We keep our "hold" rating and fair-value estimate of $1.38.
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