FSMOne SG - Research Highlights

2021-08-24 13:03:32 This industrial REIT has a well-diversified tenant base, high occupancy rates and an increase in Y-o-Y gross revenues. Now, its latest NC5 perpetual notes also boasts one of the highest yields amongst its peers: https://bit.ly/3kfn2C3

In this week’s Bond Market Monitor, the Fed is considering to taper asset purchases this year, and more updates: https://bit.ly/3gp69Ui

Following its default last year, ecological fertilizer producer Century Sunshine has provided an update on its possible debt restructuring. The plan includes key elements from repayment to interest and term: https://bit.ly/3y9f7Ly Open / Comment

2021-08-24 03:40:07 ETF Idea

Ride on the rapidly growing demand for food with this ETF

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• The global agribusiness industry includes the entire spectrum of businesses related to food production.

• Broader secular trends such as population growth and rising income levels, underpin the industry’s long-term growth prospects.

• Additionally, climate change and shortage of arable land means there is a greater need for agricultural innovations and technologies to ensure food and nutritional security.

• Commodity prices, including agricultural commodities, have been rising steadily since last summer. Rising prices of commodities have been a boon to agriculture stocks, with companies supporting production benefitting.

• Investors looking to tap into this megatrend should consider the VanEck Vectors Agribusiness ETF. Our 2023 target price is USD 115, and this offers investors an upside potential of about 27%

: Read the full article here
: VanEck Vectors Agribusiness ETF (NYSE: MOO) Open / Comment

2021-08-23 12:53:54 Stock Idea

With the red-hot residential market, here's a property developer to watch

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• Since its incorporation in 2010, property developer Oxley Holdings has launched portfolio of 48 projects spanning across Singapore as well as international markets.

• With a substantial amount of unbilled sales, Oxley is expected to generate a steady income stream over the next three years.

• The strong generation of cash flow generation has supported Oxley’s deleveraging efforts. We believe that the continuous reduction in its net gearing ratio could drive a re-rating in its share price.

• We expect the streamlining of Oxley’s portfolio to focus on its core competency – property development – to deliver greater value to shareholders and further support its deleveraging.

• We value Oxley at a target price of SGD 0.28, derived from a 50% discount to our estimated revalued net asset value (RNAV). This represents a potential upside of 17%.

: Read the full article here
: Oxley (SGX:5UX) Open / Comment

2021-08-20 12:37:20 Fund Idea

Fund Friday – Are Asian High Yield Bonds Still Worth Investing In?

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• Bonds of China real estate developers, especially Evergrande, were sold off heavily on concerns over credit stress. The sell-off implicated the performance of Asian High yield (HY) credits, which recorded a -1.9% decline YTD – one of the worst-performing credit segments in 2021 so far.

• While Asian HY credits seem priced for further negative development, China’s credit situation is starting to show signs of Improvement – namely, the Huarong crisis averted and Evergrande’s debt-reduction program.

• Three reasons why Asia HY bonds are worth investing now – (i) highest yields in the bond market today; (ii) attractive valuations, both historically and relative to peers; and (iii) resiliency to Interest Rate changes.

• For exposure to the Asian HY sector, investors can consider adding to our recommended Asian High Yield bond fund, the Eastspring Investments - Asian High Yield Bond ASDM SGD-H.

• While the fund’s overweight on China's high yield real estate sector has contributed to its recent underperformance, it is well-positioned for a recovery play in the Asian HY/China real estate sector, particularly as credit concerns start to wane.

: Read the full article here
: Eastspring Investments - Asian High Yield Bond ASDM SGD-H Open / Comment

2021-08-19 03:31:23 Stock Idea

We believe this stock is on track for a dividend resumption this year, with a yield of close to 5%

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• In 1H 2021, ARA US Hospitality Trust recorded a turnaround in net property income of USD 9.1 million, coming in line with our estimates and reversing from a loss of USD 2.0 million in the same period last year.

• We maintain our expectations that the Trust will record a distributable income at the end of FY2021. This paves way for a dividend resumption – which could be a major share price catalyst.

• With an increase in leisure demand, it is projected that the US hotel market will further strengthen and rebound closer to pre-pandemic levels.

• Corporate travellers have also been returning to the Trust’s hotels, helping with the progress to the next leg of the recovery.

• We maintain our target price of USD 0.63, representing an upside potential of 27%.

: Read the full article here
: ARA US Hospitality Trust (SGX:XZL) Open / Comment

2021-08-17 03:49:51 It’s not over yet for Evergrande. Having collected 320 billion yuan in sales for the first half of the year, it looks feasible for the group to repay their debts with incoming cash from sales: https://bit.ly/3yLZavX Open / Comment

2021-08-16 15:53:17 ETF Idea

Here’s one segment that could benefit from the crackdown on China’s Big Tech firms

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• China’s regulatory crackdown has intensified in recent months, with major crackdowns hitting the edtech, online music streaming, and food delivery industries.

• The semiconductor industry is unlikely to see any regulatory tightening as the government has declared its development as a national priority.

• Those who are uncomfortable with the growing regulatory risk in China’s tech sector may look towards the semiconductor industry for investment ideas.

• For exposure to the industry, investors can consider adding a position in SMIC or the Global X China Semiconductor ETF.

: Read the full article here
: Global X China Semiconductor ETF (HKEX:3191), SMIC (HKEX:981) Open / Comment

2021-08-13 12:40:44 ETF Idea

With attractive dividend yields and longer-term catalysts, China’s Big Four banks are hard to ignore

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• Chinese banks have continued to lag behind their international peers due to a couple of negative developments in this industry. This includes new loan curbs, uncertainty over Huarong’s debt situation, and increasing competition in the industry.

• The latest property loan curbs are likely to result in slower property-related loan growth but the overall impact would be manageable as there are several other sectors, including infrastructure and manufacturing, that are expected to support growth in loan volumes.

• While the Huarong saga will translate to higher loan loss provisions and investment losses, we believe that the impact on their balance sheets should not be material. Besides, the Big Four banks are well-capitalised to withstand any potential shocks.

• The opening up of China’s financial sector could lead to increased competition, but efforts to create domestic banking behemoths could lead to new revenue streams for Chinese banks.

• Trading at less than 0.5X price-to-book ratio, the valuations of the Big Four banks are near their historical lows. With an average dividend yield of about 8.5%, they are also attractive yield-plays for income-seeking investors.

: Read the full article here
: ChinaAMC Hong Kong Banks ETF (HKEX:3143), Global X MSCI China Financials ETF (NYSE:CHIX) Open / Comment

2021-08-10 03:30:07 Despite COVID-19 restrictions remaining in place for most of 2021, Starhill Global REIT has sufficient liquidity in the short term to tide through the current economic backdrop.

With its prudent capital profile and long portfolio lease expiry profile, we have two SGREIT bonds to recommend: https://bit.ly/2VyztAy Open / Comment

2021-08-10 03:30:07 Despite COVID-19 restrictions remaining in place for most of 2021, Starhill Global REIT has sufficient liquidity in the short term to tide through the current economic backdrop.

With its prudent capital profile and long portfolio lease expiry profile, we have two SGREIT bonds to recommend: https://bit.ly/2VyztAy Open / Comment