Things Investors Should Know About Suntec Real Estate Investment Trust

Suntec Real Estate Investment Trust (SGX: T82U) is a commercial real estate investment trust. The Trust invests in income-producing real estate that is primarily used for retail and/or office purposes. It currently has interests in retail malls and offices in Singapore and Australia. Its portfolio includes Suntec City, a one-third interest in One Raffles Quay, a commercial building in Sydney and a 50% stake in Southgate Complex in Melbourne, just to name a few.

Here Multi Management Future Solutions research two things as per the trader's interest in this Singapore REIT that investors may want to know about right now: its latest financial performance and valuation.

Suntec REIT’s financial performance for the third quarter of fiscal year ending December 2018. The gross revenue of its Q3 in 2017 was S$91,132 and in 2018 its change -2.5% to S$ 88,811. Net Property income its Q3 in 2017 was S$ 63,852 and change -11.4 to S$ 56,544 in 2018 and Income contribution from JVs S$ 22,254, change 4.1 to S$ 23,159 in 2018.

During the quarter, net property income declined year-on-year due to lower income from certain properties, weakened Australian dollar and higher expenses as a result of sinking fund contribution. On the other hand, income from joint ventures increased due to the acquisition of additional interest in Southgate Complex.

As of 30 September 2018, the REIT’s gearing stood at 38.2% while its committed occupancy rates for office and retail properties stood at 98.9% and 98.1% respectively. 

The valuation data of Suntec Real Estate Investment Trust shows two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio and the distribution yield.

The table below shows Suntec REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.

Suntech REIT Average 42 premium is 5.6% distribution yield to book price ratio 0.86% and 7.0% to book price ratio 0.90%.
 Which conclude that Suntec REIT is trading at a premium to market average based on its low distribution yield, offset slightly by its low PB ratio.

The Positives And Negatives That Investors Should Know M1 Ltd’s Latest Earnings Update

M1 Ltd (SGX: B2F) is the smallest player in Singapore’s telecommunications industry. 

M1 Limited, together with its subsidiaries, provides mobile and fixed communications services to consumers and corporate customers in Singapore.

This undervalued stock recently released its 2018 third-quarter earnings update. In this article, Multi Management Future Solutions research some good and not-so-good points from its results announcement.

The positives

M1’s revenue improved by 10.1 % YOY to S$274.6 million. Service revenue also inched up by 1.9% YOY to S$190.2 million.

M1’s balance sheet improved. As of 30 September 2018, the telco’s net debt stood at S$363.5 million and its gearing ratio was 0.7; a year ago, M1’s net debt and gearing were S$397.9 million and 1.0, respectivel. 

The number of postpaid mobile subscribers for M1 increased by 7.1% year-on-year to 1.36 million. Similarly, fiber customer numbers jumped by 12.3% YoY to 204,000.

The average revenue per user (ARPU) for M1’s fiber broadband business increased by 4.3% to S$38.60 compared to a year ago.

The Negatives

The mobile telecommunication and international call segments reported YOY declines in revenue of 0.1% and 29.4%, respectively.

Prepaid mobile subscriber numbers fell by 20.7% to 584,000. This resulted in a decline in the segment’s market share from 22.3% a year ago to 19.8%.

ARPUs for postpaid, prepaid, and data plan were down by 2.6%, 2.8%, and 16.5%, respectively, compared to 2017’s third quarter.

Genting Singapore Strong Profit Growth In Its Latest Earnings Update

Genting Singapore PLC (SGX: G13) is a Singapore-based regional leisure, hospitality and integrated resorts development specialist listed on the main board of the Singapore Exchange Securities Trading Limited. The Company undergoes in Singapore undervalued stock segment has casinos and integrated resorts in different parts of the world, including Australia, the Americas, Malaysia, the Philippines, and the United Kingdom.                                                                                                                                                                           

Genting Singapore PLC recently reported its 2018 third-quarter earnings update. Here Multi Management Future Solutions research some key points from Genting Singapore’s latest results from different sources, let's take a look-

1. The third quarter revenue of Genting Singapore is increased by 1% YOY to S$639.1 million in 2018. Strong growth of 9% to S$192.8 million was seen in non-gaming revenue, while gaming revenue decreased by 1% to S$445.4 million.

2. The gross profit for the quarter coming in at S$305.3 million, while net profit credited to shareholders rose 46% year-on-year to S$210.4 million. 

3. Similarly, the earnings per share were by 46% from a year ago to 1.75 cents.

4. The other operating income was seen 17 % jump to S$22.3 million, and a significant 97% decline in other operating expenses to S$1.2 million, led to Genting Singapore’s outstanding profit growth despite its flat gross profit.

5. The operating cash flow of S$248.2  million in 2018’s third quarter while capital expenditures came in at S$54.7 million which resulted in free cash flow of S$193.5 million, down 53.8% from S$418.7 million a year ago.

6. Genting Singapore’s borrowings stood at S$1.03 billion while its cash and bank balances stood at S$3.89 billion, giving it a net cash position of S$2.86 billion.

Singapore REITs That Increased Their DPU Last Quarter

Singapore REITs are the center point of attraction among Singapore stock market.

Multi Management Future Solutions choose the two important REITs to invest at the end of 2018 as per the trader's interest. 

EC World Real Estate Investment Trust and Manulife US Real Estate Investment Trust are two REITs that delivered strong growth in distributions per unit in the last quarter. Here we are presenting some financial facts which will help you to invest in these Singapore REITs.

EC World Real Estate Investment Trust invests in real estate assets. The Trust focuses on properties in the People's Republic of China. being used for supply-chain management, e-commerce, and logistical purposes. The latest quarter report of REIT recorded growth in all its core figures. Gross revenue and net property income increased by 0.1% and 0.5% respectively. Due to the contribution from its maiden acquisition of the Wuhan property the growth of REIT become larger. 

The DPU and distributable income grew at a much faster pace than its top line, increasing 10.0% and 9.0% respectively. The trust gets an advantage from the absence of a 5% withholding tax that was charged in 2017 and lower expenses. The REIT also has one of the lowest gearing ratios among the REITs listed in Singapore, with a gearing ratio of 30.7%. 

EC World REIT has one of the highest yields in the market at a tasty 8.67%.

Manulife US Real Estate Investment Trust is US Real Estate Investment Trust invests in real estate properties. The Company focuses on office properties located in the United States. The companies most recent quarter, gross revenue and net property income increased by 75.3% and 74.9% respectively from to the new accession. The distribution per unit increased by a whopping 33.6% to US$0.0151.

The performance of this REIT amaze the investors as the two new accessions would have diluted DPU based on a pro forma results of 2017. On the other side, with the two latest accessions, the REIT’s gearing now stands at 37.4%, just a few percentage points shy of the 45% regulatory limit.

At the time of writing, units of Manulife REIT exchange hands at S$0.775. If its DPU is annualized, the REIT will have a yield of 7.8%.

How SATS Ltd Shares Have Soared 2X Higher Than The Market’s Returns

The Airline caterer SATS Ltd (SGX: S58) delivered total returns of 30% over the period, a performance that is two times better than the STI, which posted 14% in total returns over the same period. SATS is one of the leading Singapore undervalued stock and leading provider in gateway services and food solutions.

Here Multi Management Future Solutions research closer look at the company’s performance over the past three years from different sources. Let's take a look closer look at SATS performance statistics over the past three years-

SATS Lim. has increased its revenue from S$1.69 billion in the financial year ended 31 March 2016 (FY15/16) to S$1.72 billion in FY17/18. The net income increased by a compound annual growth rate (CAGR) of around 9% rising from S$220.6 million to S$261.5 million over the same period. The increase in net income led to its EPS increasing from S$0.20 to $0.23. 

	FY17/18	FY16/17	FY15/16
Cash From Operation	245.5	308.9	273.1
Capital Expenditure	92.8	85.5	51.2
Free Cash Flow	152.7	223.4	221.9
Shares Outstanding	1,125.10	1,20.70	1,11.40
Free Cash Flow Per Share	0.14	0.2	0.2

According to the report of S&P Global Market Intelligence (above table) cash flow performance generated by SATS are stable free cash flow per share for FY15/16 and FY16/17 followed by a drop in FY17/18. The downtrend was due to changes in working capital which dragged its operational cash flow lower, coupled with an increase in capital expenditure. 

SATS Dividend

Now we can analyze the SATS’s dividends per share and payout ratio to see if its dividend sustainable. SATS has grown its dividend per share from S$0.13 in FY13/14 to S$0.18, the average increase is 8.5A% per year. In spite of the increase in dividends, the company’s payout ratio hasn’t changed much moving from around 71% in FY15/16 to about 73% in FY17/18. The stable payout ratio suggests that SATS is not extended itself when it comes to paying out dividends, which should allow the company to sustain its dividend into the future.

SAT’s income, cash-flow, and balance sheets are on strong footing. As such, it should not come as too much of a surprise to see the company outpacing the market two times.