Comprehensive Analysis of Listed Companies – November 2024

Broker: Lim & Tan Securities

Date: November 5, 2024

Overview of Financial Markets

On a day where the FSSTI Index closed at 3,572.0, up by 0.5%, we witnessed a varied performance across different indices and commodities. The Dow Jones and S&P 500 showed no significant changes, while the NASDAQ saw a slight uptick of 0.3%. Key commodities such as Gold and Crude Oil exhibited distinct trends, with Gold slightly down by 0.3% and Crude Oil up by 2.8%. The Baltic Dry Index, however, marked a significant decline of 34.2% year-to-date.

Netlink Trust: A Defensive Play with Decent Dividend Yield

Netlink Trust reported a Distribution Per Unit (DPU) of 2.68 Singapore cents for H1 FY25, marking a 1.1% increase from the previous period. Despite a slight revenue decrease of \$0.5 million compared to H1 FY24, the trust maintained a healthy EBITDA margin of 70.1%, albeit a reduction from 72.6% in H1 FY24 due to higher operating expenses and the absence of one-off gains. The number of residential and non-residential connections saw a year-on-year growth, reflecting a resilient business model bolstered by predictable revenue streams. With a market cap of S\$3.6 billion, Netlink Trust currently trades at 34x PE and 1.5x PB with a dividend yield of 5.8%.

AIMS APAC REIT: Strong Financial and Operational Results

AIMS APAC REIT (AA REIT) reported a 5.0% year-on-year increase in distributions to S\$38.0 million for 1H FY2025. Gross revenue rose by 7.7% to S\$93.5 million, and Net Property Income increased by 5.1% to S\$67.6 million. The REIT executed 11 new and 29 renewal leases, contributing to a strong rental reversion rate of 16.9%. The portfolio occupancy was 95.0%, with a weighted average lease expiry of 5.0 years. With an aggregate leverage of 33.4% and substantial undrawn committed facilities, AA REIT is well-positioned for future growth and acquisitions.

Macroeconomic Insights: US, Hong Kong, and China

The US economic landscape shows a deceleration in growth, with credit card usage growing at a decreasing pace. Leading indicators point to a potential downside in the labor market, supporting a bearish outlook on equities. Meanwhile, China’s anti-graft agency punished 589,000 people for discipline violations in the first nine months of 2024. The crackdown on the finance industry indicates a push for more permanent oversight.

Fund Flow Data and Sector Analysis

Institutional investors showed a net sell of -S\$369.3 million for the week of 28 October 2024, while retail investors net bought +S\$306.0 million. The financial services sector saw significant institutional net sells, particularly DBS at -S\$116.0 million. Conversely, retail investors showed strong net buys in the same sector, with DBS at +S\$119.1 million.

Upcoming Dividends and Special Distributions

Several companies are set to distribute dividends and special distributions in November 2024. Notable mentions include Netlink NBN Trust with an interim dividend of 2.68 cents and SGX with an interim dividend of 9.0 cents. Investors can look forward to these payouts, reflecting the companies’ strong financial health and commitment to returning value to shareholders.

SGX Watch-List and Latest Additions

The SGX Watch-List currently includes 34 companies, with recent additions like Addvalue Technologies and Renaissance United. These companies are being monitored for performance and compliance with listing requirements, highlighting the regulatory environment’s vigilance in maintaining market integrity.

Conclusion

Overall, the financial markets exhibit a mix of defensive plays and growth opportunities. Companies like Netlink Trust and AIMS APAC REIT demonstrate resilience and strategic foresight in navigating economic uncertainties. Investors are advised to maintain a balanced portfolio, leveraging both stable dividend-yielding stocks and growth-oriented investments.