Keppel Pacific Oak US REIT (KORE SP)
New Name, Yet Same Attractive 8% Yield; BUY
Maintain BUY and USD0.88 TP, 19% upside plus c.8% yield. Despite concerns over the rising US China trade tensions, we believe KORE’s office portfolio, which mainly focuses on US technology hubs, will stay resilient and continue to outperform the broader market. The changes announced in name and trust structure are more cosmetic in nature, and should not have any operational impact. Valuations are attractive at 0.9x P/BV and 8.3% yield – healthy at >300bps spread compared to Singapore Office REITs.
Clearbridge Health Limited
SINGAPORE | HEALTHCARE | 2Q19 RESULTS
1H19 revenue made up 23% of our full-year estimates.
Healthcare system revenue surged 407% YoY due to higher revenue contribution from TMJ (acquired Apr’18) and IGM (acquired May’19).
Medical centre revenue grew 26% YoY as the Group expanded its Philippines, Hong Kong and Malaysia businesses.
Loss attributable to shareholders rose by S$1.3mn QoQ, dampened by a S$1.16mn rise in operating expenses, of which S$1.11mn is non-recurring.
Maintain BUY with a lower TP of S$0.26 (prev TP: S$0.28). The lower target price is due to the increase in number of shares after the recent share placement. We expect higher revenue contribution from the new acquisitions and business expansions to flow into 2H19. We kept of FY19e forecast relatively unchanged.
Born to fly
• Making waves in Bangkok
• CapitaLand and family of REITs are well positioned to weather market uncertainties
• Be ready to pounce on opportunities; its REITs remain on an acquisition path
Check out our compilation of Target Prices