REIT Watch – Hospitality S-REITs’ DPU Rebound 32% in 2022Author: SGX As the earnings season conclude, REITs and Property Trusts listed in Singapore have announced financial results or published business updates for the period ending 31 Dec 2022. Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y). By sub-segments, the Hospitality segment saw the highest median increase of 31.6 per cent while Healthcare and Diversified segments were resilient at 1.6 per cent, 1.5 per cent respectively. The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent). ARA US Hospitality Trust (ARA H-Trust) declared a Distribution per Staped Security (DPS) of 3.054 US cents for FY22, up 760 per cent from FY21’s 0.355 US cents. This came on the back of stronger operating performing as the US lodging market continued to recover. ARA H-Trust achieved higher revenue of US$169.0 million and Net Property Income (NPI) of US$41.4 million in FY22, up 29.3 per cent and 66.4 per cent y-o-y respectively. This contributed to the 767.6 per cent y-o-y growth in FY22 distributable income. Paragon REIT announced a change in its financial year-end from 31 Aug 2022 to 31 Dec 2022. It’s latest FY22 reporting period was therefore a 16-month period from 1 Sep 2021 to 31 Dec 2022 and comparison of y-o-y DPU change was based on the current 16-month period in FY22 to a 12-month period in FY21. Its FY22 DPU was up 34.1 per cent to 7.24 Singapore cents from 5.40 Singapore cents in FY21. DPU for the 4-month period ended 31 Dec 2022 was 1.72 Singapore cents, unchanged from the same period a year ago. CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y. Accelerated global travel recovery saw most of CDLHT’s portfolio markets experience robust performance growth in FY22. Driven by higher revenue achievement, its FY22 NPI increased by 43.7 per cent to S$123.7 million. The higher NPI was largely attributed to the Singapore portfolio and UK Hotels. In FY22, Revenue per Available Room (RevPAR) for its Singapore portfolio increased 104 per cent to S$166 from S$82 in FY21. CapitaLand Ascott Trust (CLAS) announced a FY22 DPS of 5.67 Singapore cents, up 31 per cent y-o-y. The trust saw strong operating performance as international travel recovers, lifting FY22 Revenue Per Available Unit (RevPAU) to $120, up 74 per cent y-o-y. As a result, FY22 revenue and gross profit increased 58 per cent and 63 per cent respectively. The trust noted that to further enhance income stability, CLAS invested S$420 million in 15 accretive acquisitions in FY22, predominantly in the longer-stay segment. Far East Hospitality Trust (Far East H-Trust) declared a FY22 DPS of 3.27 Singapore cents, up 24.3 per cent y-o-y. NPI for FY22 increased by 2.9 per cent while total distributions increased by 25 per cent to S$65 million on the back of higher NPI, lower finance expenses, and sharing of gains from the Central Square divestment. The trust noted that with the recovery of the hospitality sector, its hotels and serviced residences benefited from the increased flow of business and tourist traffic into Singapore. RevPAR for its hotel portfolio grew 64.3 per cent in FY22 to S$92 while RevPAU for its serviced apartment portfolio increased 39.3 per cent to S$195 in FY22. REIT Watch is a weekly column on The Business Times, read the original version Recent AI Spotlight Saw UMS & AEM Average 8.5% Gains on the WeekAuthor: SGX
Semiconductor Megatrends The Technology Sector comprises 22% of the FTSE All-World Index and 55% of the FTSE Taiwan RIC Capped Index, and has been a key driver of the Indices respective YTD SGD price gains of 9% and 17%. During this time, the Semiconductor Industry has contended with an inventory correction that began in 2H22, while persistent inflation and decelerating growth have reduced consumer electronics demand. Recently, semiconductor companies have been increasingly contrasting the 2023 overcapacity and chip glut with the potential demand for semiconductors and semiconductor services spurred by Artificial Intelligence (“AI”) applications in 2024 and 2025. Deloitte maintain that Generative AI has “diverse applications across all industries, ranging from market research and note-taking, to enhancing customer support interactions” and that “specific use cases have been identified in various sectors, such as personalised financial planning for wealth management, medical diagnosis in healthcare, creating immersive worlds and experiences in media and entertainment, and outfit curation for retailers”. Gartner noted in April that the “memory industry is dealing with overcapacity and excess inventory, which will continue to put significant pressure on average selling prices in 2023” with “the memory market projected to total $92.3 billion, a decline of 35.5% in 2023, however, it is on pace to rebound in 2024 with a 70% increase”. As of 28 April, Nvidia was the fourth largest weight of the FTSE All-World Index and Taiwan Semiconductor Manufacturing Company (“TSMC”) was the largest weight of the FTSE Taiwan RIC Capped Index.
UMS & AEM Average 8.5% Gains on the Week The 10 most traded stocks of Singapore’s Technology Sector are tabled below.
Source: SGX, Refinitiv (Data as of 26 May) UMS Holdings and AEM Holdings generated comparatively symmetrical returns of 8.6% and 8.4% last week, with respective net institutional inflow of S$4.3 million and S$5.6 million.
As noted in the table above, the 10 most traded stocks of the Singapore-listed Technology Sector maintain a combined market capitalisation of close to S$10 billion, while averaging close to S$40 million in average daily turnover. The 10 stocks have averaged a 6.0% decline in total return over the past 21 weeks on S$62.6 million of net institutional outflow. Meanwhile, the Lion-OCBC Securities Hang Seng TECH ETF has been the most traded Exchange Traded Fund in Singapore so far this year. The longer term 5-year total returns and average valuations of the 10 most traded stocks of the Singapore-listed Technology Sector are tabled below.
Note Total Returns for companies listed within the 5 year period, are taken from debut date. Source: SGX, Refinitiv (Data as of 26 May). Ongoing Growth & Geoeconomic Fragmentation Risks With Singapore’s 1Q23 GDP report last week, the MTI cautioned the electronics downcycle is likely to be deeper and more prolonged than earlier projected. The downturn in the electronics cycle has seen Singapore NODX, Taiwan and South Korea exports print YoY contractions since October 2022. The IMF also noted in its first staff discussion note for 2023 that rising geopolitical tensions have led to more protectionism and increasing use of cross-border restrictions on the national security grounds. For instance the US National Strategy (October 2022) which setting a goal to “maintain as large a lead as possible” in selected technologies such as computing, biotech, and clean tech with China-related measures announced on October 7, 2022, seeking to restrict China’s access to these technologies, with a focus on technologies that could be used in the military sector. The IMF maintain that this has seen companies increasingly focus on the resilience of their supply chains, with production location decisions by firms may be guided by government policies rather than efficiency considerations. Gartner have noted that COVID-19 and the US and China trade tensions have precipitated the deglobalisation trend and the rise of techno nationalism noting that “semiconductors today are seen as a national security issue” and that “governments around the world are scrambling to build self-sufficiency in the semiconductor and electronics supply chain, which is leading the incentivization of onshoring initiatives across the world”. UOB Leads Buybacks; PropNex’s Kelvin Fong Adds to StakeAuthor: SGX ![]() For the trading sessions that spanned May 19 to 25, the Straits Times Index (STI) gained 0.8 per cent while the Hang Seng Index fell 4.6 per cent and the FTSE Bursa Malaysia KLCI declined 3.2 per cent. Institutions were net buyers of Singapore stocks over the five sessions with S$4 million of net inflow following the preceding five sessions which recorded S$270 million of net outflow. DBS, UOB, Singapore Airlines, Jardine Matheson Holdings, and ST Engineering led the net institutional inflow for the five sessions. Meanwhile, Thai Beverage, Yangzijiang Shipbuilding (Holdings), City Developments, OCBC and Seatrium led the institutional outflow over the five sessions. Share buybacksThere were 18 companies conducting share buybacks over the five trading sessions through to May 25, with a total consideration of S$22.1 million, following the S$40.6 million filed for the preceding five sessions. UOB led the five-session consideration tally, buying back 360,000 shares acquired at an average price of S$27.92 per share. Between May 8 and 25, UOB has bought back 1,008,000 shares, representing 0.06 per cent of its issued shares (excluding treasury shares). UOB noted in March that its buyback mandate provides it the flexibility to undertake the purchase or acquisition of its issued shares as and when appropriate to help achieve three objectives. Firstly, the buybacks provide a means to assist the management of the capital structure of the company, with a view to achieving an efficient capital mix. Secondly, the mandate enables UOB to manage surplus capital, such that the surplus capital and funds which are more than the company’s requirements may be returned to shareholders in an expedient and cost-efficient manner. Thirdly, the buybacks also provide a means to improve return on equity, which is also one of the key objectives of the company. UOB also operates share-based compensation plans. The bank added that the purchase mandate would be exercised by the directors only in circumstances that are in the best interests of the company and no purchase or acquisition of shares would be made in circumstances which would or are likely to have a material adverse effect on the financial position of the company and its subsidiaries. Director and substantial shareholder transactionsThe five trading sessions saw close to 80 changes to director interests and substantial shareholdings filed for fewer than 30 primary-listed stocks. This included seven company director acquisitions with two disposals filed, while substantial shareholders filed seven acquisitions and four disposals. PropNexBetween May 19 and 22, PropNex executive director Kelvin Fong Keng Seong acquired 748,200 shares at an average price of S$1.02 per share. This increased his direct and deemed interest in Singapore’s largest listed real estate group from 8.75 per cent to 8.85 per cent. His preceding acquisitions were in July 2022, with 72,100 shares acquired at S$1.52 per share. Fong oversees the group’s training development curriculum and also administers the development of IT strategies and technology innovations to improve the group’s competitive edge in the industry. Prior to joining the management team, Fong was one of the top team leaders and his team of salespersons has a strong track record for outstanding sales performance and excellent customer service. Fong also spearheads the sales and leadership training programmes. In a presentation on Apr 6, Fong noted that with its regional reach, PropNex maintained a salesforce of close to 15,000 salespersons. In 2022, PropNex launched its fifth overseas brand presence in Australia. PropNex’s real estate brokerage services are operated by its wholly owned flagship subsidiary PropNex Realty Pte Ltd. PropNex Realty derives commission-based fees through the provision of property brokerage. In Singapore, the group maintains a substantial market share in the residential segments of new project launches, private resale, HDB resale and rental including commercial and industrial properties. On the recent round of cooling measures directed at the Singapore property market, PropNex maintained that the government is moving early to rein in any exuberance that may be building up in the residential property market, seeing that overall private home prices rose by 3.3 per cent in Q1 2023 compared to Q4 2022, as shown by the URA property price index flash estimates. LY CorporationOn May 22, LY Corporation founder and executive director Tan Kwee Chai acquired 490,000 shares of the Catalist-listed company via an off-market transaction. At an average price of 6.0 cents per share, the consideration of the acquisition was S$29,400. This took his total interest in the manufacturer and exporter of wooden bedroom furniture from 73.17 per cent to 73.27 per cent. His preceding acquisition was on Nov 29, with 200,000 shares acquired at 7.8 cents per share. Tan, who started furniture making in 1976, has been a director of LY Furniture since its incorporation and has been instrumental in the group’s growth, leading to the expansion of its business and operations. Tan is responsible for the group’s overall management and operations, including formulating the group’s strategic directions and expansion plans. In FY22 (ended Dec 31), the group reported a net profit of RM12.4 million (S$3.6 million), a significant improvement from the RM7.2 million loss in the previous year. This performance was primarily driven by a 23.9 per cent increase in revenue to RM234.5 million, due to changes in the product mix and a stronger US dollar to ringgit exchange rate. The group operates from 25 factories and warehouses, occupying a combined built-up area of approximately 1.9 million square feet. Its products are sold mainly to overseas dealers such as furniture wholesalers and retailers who generally resell the products to end-users through their respective retail networks and domestic customers who are primarily third-party agents who typically export and resell its products outside Malaysia, such as to the United States. Enviro-Hub HoldingsOn May 22, Enviro-Hub Holdings executive chairman Raymond Ng acquired 550,600 shares of the company at S$0.032 cents per share. This took his total interest in the environmental management solutions group from 28.42 per cent to 28.46 per cent. Ng is responsible for the group’s overall management, business development, investment decisions as well as strategic direction and planning. He has accumulated over 35 years of experience in the recycling and e-waste management & recovery business. He is also a property developer with more than 20 years of industry experience. Enviro-Hub Holdings maintains a diverse portfolio that includes trading, recycling, and refining of e-waste/metals, piling contracts, construction, rental and servicing of machinery, property investments and management, and the manufacturing and trading of health-care products. For its FY22 (ended Dec 31), the group’s revenue grew 9 per cent from FY21, reaching S$44.1 million. This was primarily due to growth in its e-waste recycling business and contributions from the health-care segment following the completion of the acquisition of Pastel Glove in October 2021. Inside Insights is a weekly column on The Business Times, read the original version.
Labels: UOB, OCBC Bank, StarHub, Food Empire, ComfortDelGro, Comba, Nanofilm, Global Inv, Sin Heng Mach, Oxley, UOB Kay Hian, PanUnited, PEC, Japan Foods, PSC Corporation, GHY Culture, Digilife Tech, LY Corp, Enviro-Hub, PropNex REIT Watch - Mapletree S-Reits See Strong Performance Amid Active AcquisitionsAuthor: SGX Among the constituents of the Straits Times Index, three S-Reits are members of the Mapletree family – Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, and Mapletree Industrial Trust – and they make up a third of S-Reits’ representation in the index. REIT Watch is a weekly column on The Business Times, read the original version Tourism and Hospitality Stocks Benefit From Recovery MomentumAuthor: SGX
Rebound in tourist arrivals The World Economic Forum noted that global tourism rebounded strongly in 2022, with international tourist arrivals more than doubled when compared to the previous two years. As international travel continues to pick up, Singapore’s tourism sector has seen similar growth momentum. Data from the Singapore Tourism Board (STB) showed that Singapore’s visitor arrivals in April 2023 surpassed 1.1 million, the highest in a month since the pandemic, bringing the total number of visitor arrivals in 2023 to over 4 million as of 30 April. This result coincided with gains being seen in hospitality S-REITs, which were among April’s top S-REITs performers, as elaborated here. With China’s reopening and the increase in international flight capacities, STB estimated that international visitor arrivals to Singapore would be in the range of 12 to 14 million in 2023, with full tourism recovery expected by 2024. Tourism receipts are anticipated to net $18 billion to $21 billion accordingly. This forecast coincided with the latest air traffic statistics provided by Changi Airport Group (CAG), which reported that the airport handled over 4.6 million passenger movements in April, or around 82% of pre-pandemic levels; while aircraft movements totalled 26,300, which was around 83% of April 2019 levels. CAG is set to reopen the northern wing of Terminal 2 in October this year, bringing the total passenger capacity to 90 million passengers per annum, higher than the pre-pandemic levels of 85 million passengers per annum.
Recovery momentum in travel & hospitality industries Singapore’s 10 most traded stocks that represent the travel and hospitality industries have returned an average 1.3% gain over the first 20 weeks of 2023 ending 18 May, outperforming the STI’s YTD total return of 0.3%. The 10 stocks booked a combined net institutional inflow of S$186.7 million in the YTD, which was in contrast to the broader Singapore stock market, which booked over S$2.3 billion of net institutional outflow. Amongst the 10 stocks, Genting Singapore and Singapore Airlines led the net institutional inflow YTD. Together, the 10 stocks have contributed 9% of the day-to-day turnover of all stocks listed on SGX over the past 20 weeks of 2023. The 10 stocks span across three sectors – Industrials, Consumer Cyclicals and REITs – with Singapore Airlines (SIA), Genting Singapore (Genting) and CapitaLand Ascott Trust (CLAS) being the most traded stock in each sector. The 3 stocks generated a total return of 10.1%, 7.7% and 3.0% respectively in the YTD ending 18 May.
Source: SGX, Bloomberg (data as of 18 May 2023)
Singapore Airlines
Genting Singapore
CapitaLand Ascott Trust
10 Most Traded Tourism & Hospitality Related Stocks Sorted by highest average traded turnover in the 2023 YTD ending 18 May.
Source: SGX, Bloomberg (data as of 18 May 2023) Industrial Sector Recently Led by Marco Polo Marine, YZJSH & SIAAuthor: SGX
Across all sectors of the Singapore stock market, the past 20 weeks have seen the Industrials Sector book the highest increase in daily trading turnover (in absolute SGD terms) as compared to 2022. Seatrium has been a key driver of the increase in the Sector-level increase in trading activity, following the completion of the combination of Sembcorp Marine and Keppel Offshore & Marine in February. The combined entity was formed to create a premier global player with its deep engineering heritage, to offer products, services and solutions to meet today and tomorrow’s energy needs. According to the 1QFY23 business update, renewables and cleaner/green solutions currently comprise approximately 39% of the Seatrium group’s net order book. Seatrium has ranked among the five most traded Singapore stocks this year, with S$41.1 million of average daily turnover, compared to S$14.6 million in 2022, while Keppel Corporation has averaged S$29.6 million of average daily turnover compared to S$26.3 million in 2022. Singapore’s 20 most traded Industrial stocks have booked net institutional fund outflows of S$54.5 million over the past 20 weeks, however last week saw S$33.6 million of net institutional fund inflows. Seatrium led the net institutional inflows of the 20 industrials last week, in addition to Keppel Corporation, YZJ Shipbuilding (Holdings) (“YZJSH”), ST Engineering and Singapore Airlines (“SIA”). Both YZJSH and SIA were also among the three strongest performing stocks last week along with Marco Polo Marine. Meanwhile, among the 20 stocks, Jubilee Industries Holdings, Singapore Post and ComfortDelGro Corporation led the decliners last week.
Source: SGX, Refinitiv, Bloomberg (Data as of 19 May 2023). On 11 May, Marco Polo Marine reported 102% YoY revenue growth for its 1HFY23 (ended 31 Mar), while on 16 May, SIA reported FY22/23 (ended 31 Mar) revenue growth of 133%. SIA also highlighted its average PAX load factor reached 85% compared to 30% in FY21/22. YZJSH’s share price gain from S$1.18 to S$1.27, coincided with the USD/CNY returning to Dec 2022 levels, above the 7.00 threshold. The Group noted in it its FY22 Annual Report has hedged over 40% of its currency exposure to USD using forward contracts to mitigate risks as most of its contract wins are denominated in USD. Globally, the Industrial Sector has been among the four strongest performing sectors for the first 20 weeks of 2023. Much of these gains have extended to the Asia Pacific, with the Industrial Sector seeing less fragmentation and bifurcation than the Technology Sector. The 20 most traded stocks of Singapore’s Industrial Sector maintain a combined market S$90 billion, while averaging combined daily trading turnover of just over S$200 million. This means the 20 stocks have comprised 19% of the daily trading turnover in Singapore so far this year, while maintaining around 11% of the combined market capitalisation or market value of the Singapore stock market. The recent performances and net institutional flows of Singapore’s 20 most traded Industrial stocks over the past 20 weeks are tabled below.
Source: SGX, Refinitiv, Bloomberg (Data as of 19 May 2023). Note table excludes stocks which have announced privatisation offers. Singapore’s five actively traded industrial stocks that have booked the highest net institutional inflows so far this year proportionate to the current market capitalisation includes Beng Kuang Marine, Dyna-Mac Holdings, Acesian Partners, Seatrium and Marco Polo Marine. The five stocks are trading at a premium to their book value, with mixed moves in the 2023 year to 19 May, ranging from a 69% total return for Dyna-Mac to an 8% decline for Seatrium. On 12 April, Beng Kuang Marine announced that the Group had entered into a conditional land sale and purchase agreement to sell a part of its Batam waterfront shipyard property for S$8.64 million to a subsidiary. Prior the announcement, Beng Kuang Marine was trading at S$0.04. On 16 May, Beng Kuang Marine reported 1QFY23 (ended 31 March) gross profit increased 26.4% from 1QFY22 to S$3.18 million, with improvement in cost management and productivity initiatives, and in total the Group had an order book of S$24 million as at 31 March. On 11 May, Dyna-Mac Holdings reported it had won New Orders of S$270 million, bringing Net Order Book to S$608.1 million after reporting 1QFY23 (ended 31 March) revenue increased by S$19.8 million from $67.5 million in 1QFY22 to $87.3 million for 1QFY23. The increase was mainly due to higher progressive recognition achieved for the projects carried out in 1QFY23. Meanwhile, on 27 April, Catalist-listed Acesian Partners received approval from its shareholders for the diversification of the existing business of the Group to include the proposed investment business. |