Brokers' take
Compiled by Rachel Mui
KEPPEL REIT | BUY
OCT 16 CLOSE: $1.12 TARGET PRICE: $1.35
UOB Kay Hian, Oct 16
Results came in broadly in line, with 9M 2018 DPU of 4.2 S cents/share at 72 per cent of our full-year estimate.
Third-quarter net property income declined 10.9 per cent y-o-y due to lower contributions from Ocean Financial Centre, 275 George Street and 8 Exhibition Street; partly mitigated by increased contributions from Bugis Junction Towers.
Nonetheless, conditions in its Singapore office portfolio remain firm with high overall committed occupancy at 98 per cent.
The committed occupancy of Singapore office stood at 97.8 per cent (vs core CBD's average of 94.6 per cent) and committed occupancy of its Australian portfolio was 98.9 per cent (vs Australia's CBD average of 90.6 per cent).
During the quarter, K-Reit saw take-ups by HSBC at MBFC Tower 2, and government agencies at Bugis Junction Towers and One George Street in Australia.
In Singapore, new demand came mainly from the finance, insurance and flexible working space industries.
Prospects for its Australia portfolio also look promising, and the trust's Q3 gearing is stable at 39.1 per cent.
Maintain "buy" with target price of $1.35.
MINDCHAMPS PRESCHOOL | BUY
OCT 16 CLOSE: $0.60 TARGET PRICE: $0.94
RHB Research Institute, Oct 16
MindChamps is continuing its expansion overseas as the Singapore market matures.
Year-to-date, it has acquired six centres in Sydney, bringing its total preschools in Australia to 10.
As the six acquisitions were completed between June and September, the new centres are expected to contribute positively to H2 2018 results.
With 10 company-owned and operated schools in Sydney, we believe MindChamps will be able to build brand awareness in the city.
The management guided that the group is ready to expand via the franchisee model.
MindChamps has also appointed a new master franchisee in Malaysia, which is expected to open 20 preschool centres by 2024.
The first of these schools is slated to commence operations in JB next year. The sale of the 20 franchise licences will result in a one-off gain in Q4, which is in line with our full-year estimate.
Separately, management expects to commence the acquisition of preschools in China through the China Preschool Fund in November.
The group will be running two brands there - the main brand, MindChamps, which will have the full set of curriculum, and a sub-brand, Powered by MindChamps, which will have a normal curriculum plus enrichment courses.
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