Broker: CGS International
Date of Report: June 6, 2025

Keppel DC REIT: Bullish Momentum Builds as Asia’s Data Centre Giant Eyes New Highs – Plus NIO Inc’s Struggle Amid Intensifying EV Competition

Market Overview: Wall Street Gains, Fed Rate Cut Bets Rise, and Global Economic Shifts

Global equities rebounded as hopes rose for easing tensions between the US and China, following a positive call between Donald Trump and Xi Jinping. The S&P 500 neared the historic 6,000 mark, buoyed by renewed trade optimism, especially around rare earth exports. US Treasury yields were steady after a rally, while a spike in jobless claims reinforced expectations for two Federal Reserve rate cuts this year. The US dollar dipped to its lowest since July 2023. Economists anticipate the May employment report will reveal softer payroll growth compared to April, with the unemployment rate expected to hold at 4.2%.

Keppel DC REIT: Asia’s Data Centre Leader Poised for Bullish Breakout

Ticker: Keppel DC REIT (KDC)
Last Price: S\$2.19

Company Overview

Keppel DC REIT stands as Asia’s first pure-play data centre real estate investment trust, listed on the Singapore Exchange. Its core investment strategy is to build a diversified portfolio of income-producing real estate assets, primarily focused on data centres—a sector experiencing robust demand as digital transformation accelerates across industries.

Technical Analysis Snapshot

• Chart Structure: Price action reveals a bullish continuation pattern, with a significant build-up at the upper end of the trading range.
• Patterns: The stock has formed a large expanded wedge formation, indicating strong upside pressure. A bullish pennant within this wedge supports the potential for further gains.
• Resistance Levels: S\$2.25 (tested multiple times and now weakened), with next resistance seen at S\$2.38.
• Support Levels: S\$2.03 (first support), S\$1.87 (second support).
• Entry Points: S\$2.19, S\$2.12, S\$1.97.
• Stop Loss: S\$1.80.
• Target Prices: S\$2.50, S\$2.86, S\$3.05, S\$3.30.

Technical Indicators & Market Sentiment

• Ichimoku Cloud: Signals a bullish trend.
• MACD: Both MACD and signal lines are above zero; histogram remains positive.
• Stochastic Oscillator: Continues to rise, confirming bullish momentum.
• Rate of Change (ROC): 23-period ROC declined slightly but has not shown any strong reversal—suggesting a minor correction could occur without disrupting the major uptrend.
• Volume: Healthy expansion, supporting the bullish setup.

Overall, Keppel DC REIT exhibits strong technical signals for a bullish continuation. The combination of a robust chart pattern, positive momentum indicators, and supportive fundamental trends in the data centre space positions the REIT for potential outperformance.

NIO Inc: Rising Competition Weighs on EV Innovator’s Profitability

Ticker: NIO Inc
Market: Hong Kong (HKG)

Quarterly Financial Performance

• 1Q25 Non-GAAP Net Loss: Rmb6.3 billion, widening from Rmb4.9 billion in 1Q24. The loss was primarily attributed to increased operating expenses amid an intensifying competitive landscape in the electric vehicle (EV) sector.

Strategic Positioning and Outlook

• Product Pipeline: NIO has a robust pipeline, notably with the NIO, ONVO, and Firefly brands, which could drive future sales growth.
• Competitive Pressures: Despite a strong lineup, heightened competition is likely to dampen shipment growth and further challenge profitability.
• Valuation: The broker reiterates a Hold rating, with a lower discounted cash flow (DCF)-based target price of HK\$30.62, reflecting cautious optimism but acknowledging the risks ahead.

Regulatory & Compliance Disclosures

This research is prepared by CGS International and is intended for circulation only among clients, subject to strict confidentiality. The report covers various regulatory jurisdictions, compliance requirements, and investor suitability standards across markets, including Singapore, Hong Kong, Malaysia, Indonesia, South Korea, Thailand, Australia, Canada, China, France, Germany, Ireland, New Zealand, Spain, Sweden, Switzerland, the UAE, the UK, and the US.

Stock Rating and Recommendation Framework

• Add: Total return expected to exceed 10% over 12 months.
• Hold: Total return expected between 0% and +10% over 12 months.
• Reduce: Total return expected to fall below 0% over 12 months.

As of March 31, 2025, the distribution of stock ratings for 551 companies under coverage is as follows:

Conclusion: Key Takeaways for Investors

• Keppel DC REIT is technically poised for a bullish breakout, driven by strong sector fundamentals and robust technical indicators. Investors may consider entry within the S\$2.19–S\$1.97 range, with clear upside targets and defined risk-managed stop loss levels.
• NIO Inc’s widening losses underscore the fierce competition in the EV sector, despite a promising product pipeline. The Hold rating and revised DCF-based target price reflect a balanced outlook, mindful of competitive risks.

Investors are advised to conduct independent evaluations and consider their own risk profiles before making investment decisions, as market conditions and company fundamentals continue to evolve.