First REIT (FIRT SP): A Portfolio Refresh on the Horizon

First REIT faced challenges in FY24, reporting a 5.9% decline in rental income and a 6.5% drop in net property income (NPI) year-on-year, amounting to SGD102.2 million and SGD98.5 million, respectively. The performance was hindered by forex headwinds, particularly the depreciation of JPY and IDR against SGD. Despite these setbacks, local currency rental income from Indonesia and Singapore saw growth of 4.7% and 2%, respectively, while Japanese nursing homes remained stable.

An uptick in gearing ratio from 39.3% to 39.6% due to portfolio revaluation losses was noted. The portfolio experienced a 1.9% revaluation dip, with Indonesia and Japan declining by 1.1% and 4.3%, respectively. The Singapore portfolio showed a 4.1% decline due to decreasing land tenure.

In January 2025, Siloam, an existing tenant, submitted a non-binding letter of intent (LOI) to acquire First REIT’s Indonesian assets. This announcement could potentially align with First REIT’s 2.0 Growth Strategy. However, the outcome and implications of this strategic review remain uncertain.

Given the ongoing forex challenges and a risk-free rate adjustment to 2.75%, the fair value (FV) estimate has been lowered to SGD0.27. The recommendation for First REIT is HOLD.

ESG Highlights

First REIT has committed SGD1.12 million to environmental CAPEX for energy-efficient upgrades. Additionally, it emphasizes workplace diversity, with women making up 65% of its workforce and exceeding training targets in FY23. The REIT also prioritizes regulatory compliance and data protection.

Suntec REIT (SUN SP): Navigating Negative Tax Impacts

The analysis highlights that Suntec REIT is grappling with negative tax impacts, which have been a key consideration for its performance. Despite these challenges, the REIT continues to display resilience and remains under a HOLD recommendation with a fair value of SGD1.14.

BYD Co Ltd (1211 HK, 002594 CH): Smart Driving Goes Mass Market

BYD’s progress in smart driving technology has positioned it as a leader in the automotive sector. The company’s focus on mass-market adoption of advanced driving features underpins its growth potential. With a fair value of HKD405.00 and CNY425.00, the recommendation is BUY.

DBS Group Holdings Ltd (DBS SP): A Dividend Seeker’s Haven

DBS Group continues to attract dividend seekers with its robust financials. The stock is recommended as a BUY with a fair value of SGD50.00, reflecting its strong performance and reliable returns.

China Aviation Oil (CAO SP): Looking Past Near-Term Turbulence

Despite near-term challenges, China Aviation Oil remains a promising investment with a recommendation of BUY and a fair value of SGD1.10. The company’s strategic positioning supports its long-term prospects.

Xiaomi Corp (1810 HK): Riding the Wave of AI

Xiaomi’s advancements in artificial intelligence continue to drive its growth. The stock is a BUY with a fair value of HKD57.60, demonstrating the company’s ability to capitalize on AI-driven opportunities.

Amazon.com Inc (AMZN US): Heavy Investment Looks Promising

Amazon’s strategic investments in key areas, including technology and logistics, are expected to yield significant returns. The stock is rated as a BUY with a fair value of USD274.00, reflecting strong growth expectations.

Alphabet Inc (GOOGL US, GOOG US): Higher CAPEX Supports AI Expansion

Alphabet’s increased capital expenditure in artificial intelligence showcases its commitment to innovation. The stock is a BUY with a fair value of USD233.00, highlighting its leadership in cutting-edge technology.

CapitaLand Ascendas REIT (CLAR SP): Portfolio Rejuvenation Continues

CapitaLand Ascendas REIT is actively rejuvenating its portfolio, which positions it for sustained growth. The stock is a BUY with a fair value of SGD3.30, reflecting its strong fundamentals and strategic initiatives.