Mapletree Industrial Trust (MIT)

Mapletree Industrial Trust, trading at \$2.21 as of January 23, 2025, delivered robust financial results in the third quarter of FY2024/2025. The company reported a distribution per unit (DPU) increase of 1.5% year-on-year to 3.41 cents, driven by revenue contributions from its Tokyo acquisition and data center expansions in Osaka. Gross revenue rose by 2.0% to S\$177.3 million, while net property income grew by 2.6% to S\$133.2 million. These gains were supported by new leases and renewals across MIT’s property clusters.

The company’s CEO, Ms. Ler Lily, emphasized their commitment to capital management and tenant retention amidst macroeconomic uncertainties. Rental rates in Singapore increased to S\$2.28 per square foot per month from S\$2.26 in the previous quarter, with a strong weighted average rental reversion rate of 9.8%.

MIT also strengthened its geographical diversification, with the Tokyo acquisition contributing to its portfolio alongside assets in North America and Singapore. Borrowing costs decreased slightly to 3.1% from 3.2% in the prior quarter. However, the company faces risks such as rising property operating expenses and elevated borrowing costs. Analysts recommend an “Accumulate” on MIT, citing its stable rental reversions, resilient DPUs, and an 18.6% potential upside with a Bloomberg consensus target price of \$2.62.

BRC Asia

BRC Asia, a leading player in the steel reinforcement supply and fabrication sector in Singapore, maintains its dominance through integration and innovation. The company trades at \$2.72 with a market cap of S\$746.2 million, a forward P/E of 9.1x, and a dividend yield of 7.4%. Despite its strong market position, the company faces challenges related to provisions for onerous contracts due to steel price volatility. To mitigate these risks, BRC Asia employs hedging strategies and manages its sales order book effectively.

The company recently commenced operations in Thailand, marking a milestone in its regional expansion strategy. It aims to diversify revenue streams by targeting markets such as Malaysia, Hong Kong, and Australia. The group uses financial and operational metrics like return on investment, market potential, and operational efficiency to evaluate overseas opportunities. While its expertise in customizing and supplying steel products is transferable to other markets, the company remains cautious about local regulatory and competitive dynamics.

Analysts have a “Hold” recommendation on BRC Asia, as its share price has surpassed the consensus target price of \$2.67. However, the company is well-positioned to benefit from Singapore’s robust construction demand, which is estimated to reach S\$31 billion to S\$38 billion annually from 2025 to 2028.

Other Highlights

Dividend Yields

Frasers Logistics Trust, Mapletree Pan Asia Commercial Trust, and others are highlighted for their attractive forward dividend yields. Mapletree Industrial Trust stands out with a 6.06% yield, while Frasers Logistics Trust tops the list at 7.66%.

Valuation Metrics

Jardine Matheson, City Developments, and Hongkong Land have the lowest trailing price-to-book (P/B) ratios among FSSTI components, making them attractive for value investors. Genting Singapore and Jardine Cycle & Carriage offer compelling valuations with low EV/EBITDA multiples.

Macro Market Insights

Hong Kong faces budgetary challenges, with officials considering raising taxes on the top income bracket to address deficits. Meanwhile, the U.S. market experiences a shift in stock-bond correlation, driven by inflation and growth concerns. China’s economic policies remain a key focus, as Hong Kong seeks to recover from a talent drain and political upheaval.

Share Transactions and Buybacks

Significant insider transactions and share buybacks were observed. Notable acquisitions include Tuan Sing Holdings by William Liem and Indofood Agri Resources by First Pacific Investments Ltd. Companies like Singtel and Seatrium executed substantial share buybacks, demonstrating confidence in their stock valuations.

What Lies Ahead

Upcoming events include earnings releases from prominent companies like Mapletree Logistics Trust, Sabana REIT, and Keppel DC REIT. Investors should monitor these developments for potential market-moving insights.