Broker: Maybank Research Pte Ltd
Date of Report: 10 June 2025

ASEAN Market Movers: CapitaLand’s Strategic Expansion, Grab-GoTo Update, Emperador’s Whisky Growth, and Key Singapore Equity Insights

Market-Shaping Developments Across ASEAN

CapitaLand Investment’s Bold Japan Expansion Fuels Asset-Light Strategy

CapitaLand Investment (CLI) has announced a significant stride in its asset-light growth plan by securing additional investor commitments for its value-add lodging private fund, CapitaLand Ascott Residence Asia Fund II (CLARA II). CLI retains a 20% stake in the fund, ensuring robust alignment with capital partners as it pursues new opportunities.

The fund, together with co-investors, has acquired a high-profile mixed-use asset in Tokyo’s strategic Shinjuku district for over JPY30 billion. This 22-storey property marks CLARA II’s third asset and its second in Japan, featuring a blend of hotel, residential, office, and retail components.

• Transformation Plan: The hotel and residential spaces will be upgraded and converted into a 179-unit serviced residence, managed by Ascott, and rebranded as Citadines Shinjuku Tower Tokyo.
• Launch Timeline: The revamped property is scheduled to open in phases starting from the second half of 2026.
• Target Market: The new serviced residence will cater to corporate guests seeking extended stays, as well as domestic and international travelers.
• Financial Impact: The acquisition will boost CLI’s funds under management (FUM) by approximately SGD470 million.

Grab and GoTo: M&A Talks on Hold Amid Regulatory Scrutiny

Grab has clarified that it is not currently engaged in acquisition talks with Southeast Asia’s GoTo Group, signaling a pause or potential halt in the much-anticipated USD7 billion deal. Previous discussions had made progress on deal structure, but momentum slowed due to regulatory uncertainties.

• Regulatory Concerns: Indonesia’s antitrust agency raised concerns in May regarding monopolistic risks and stressed the importance of market competition if any deal proceeds.

Emperador Targets Global Whisky Demand with Major Capex Commitment

Emperador has outlined plans to invest PHP4 billion in capital expenditure this year, primarily to expand its whisky business in response to surging international demand.

• Dalmore Distillery Expansion: Most of the capex will drive the ongoing expansion at Dalmore distillery, targeting completion in the second half of 2025.
• Invergordon Distillery Upgrade: Emperador is also doubling the whisky maturation complex at its Invergordon facility, expanding from 45.4 hectares to 92 hectares. This will increase storage capacity by 1.5 million casks of maturing whisky.

Kim Heng Partners with SGEI to Support ASEAN Power Grid Connectivity

Kim Heng has signed a non-binding memorandum of understanding (MOU) with Singapore Energy Interconnections (SGEI) to operate, repair, and maintain submarine power cable systems within the ASEAN region.

• SGEI’s Role: Recently incorporated and government-linked, SGEI focuses on developing and running cross-border power interconnectors to enable electricity trade and support the ASEAN power grid vision.
• Investment and Operations: SGEI plans to invest in, develop, own, and operate interconnectors for electricity importation, as highlighted in recent media reports.
• MOU Validity: The agreement is effective until 1 June 2028 or until definitive agreements are signed or mutually terminated.

Singapore Equity Strategy: Top Picks and Market Outlook

ASEAN Equity Strategy: Navigating Negotiation Apprehension

Maybank’s ASEAN Equity Strategy remains bullish on Singapore, driven by domestic resilience, capital returns, and AI exposure. The strategy favors:

• Singapore: Companies such as SCI, STE, CICT, and ST are highlighted for their stability and growth potential.
• Malaysia: Positive outlook on PBK, GAM, ECW, and ITMAX, supported by an ongoing investment upcycle.
• Indonesia: Rebounding rate-sensitive banks (BBCA, BRIS) and developers (PWON, CTRA) are rated attractive.
• Vietnam: Anticipated tariff negotiation success may extend recent outperformance, with structural reforms and a potential market upgrade bolstering sentiment. Key picks include VHM, HPG, ACV (infrastructure); TCB, MBB (banks); MWG (consumer).

CapitaLand Ascendas REIT: Strategic Acquisitions Deepen Singapore Footprint

CapitaLand Ascendas REIT (CLAR) has announced the acquisition of a high-quality data centre and business park for SGD724.6 million, further strengthening its presence in Singapore’s vital technology and commercial property sectors.

• Asset Quality: The new properties are modern, well-located, and host technology tenants.
• Financing: The deal will be funded with SGD500 million in equity and SGD275 million in debt.
• Financial Impact: Pro-forma dividend accretion is expected at 1.36%, while net asset value (NAV) accretion is projected at 3.5%. Gearing remains relatively unchanged.
• Investment Call: The recommendation remains a BUY, citing CLAR’s diversified portfolio, exposure to value-added manufacturing/R&D, and strong credit profile.

Key Disclosures and Risk Considerations

Investment Ratings Overview

Maybank IBG Research applies the following rating system:

• BUY: Expected return above 10% in the next 12 months (including dividends).
• HOLD: Expected return between 0% and 10% in the next 12 months.
• SELL: Expected return below 0% in the next 12 months.

Ratings are assigned to companies actively covered by the analysts. Companies outside the coverage universe do not carry investment ratings.

Conclusion: Navigating Opportunities Amid Market Volatility

The latest insights from Maybank Research highlight a dynamic landscape for investors across ASEAN, with CapitaLand’s strategic deployment in Japan, Emperador’s targeted whisky expansion, and robust plays in Singapore’s tech and property sectors. Regulatory headwinds are shaping M&A activity, and infrastructure partnerships like Kim Heng’s are paving the way for greater regional energy connectivity. Investors are encouraged to remain vigilant, leverage diversified opportunities, and consult professional advisers to navigate evolving market conditions.