Two days ago, I shared my views on iFAST, FCT and MLT latest earnings. After watching the web presentations, today I am going to write my brief take on UOB and Mapletree Industrial Trust. It is definitely worth your time to listen to the webcast as you can hear how the management responsed to the various questions. You can then decide if you are aligned to their thinking and approach, and whether you want to invest in these businesses.
UOB
“Prudent management is our hall mark”
CEO Wee Ee Cheong
You can sense that throughout the presentation from both CEO and CFO. Going into a bumpy future, the group decided to give up some profit and took steps to protect their balance sheet. Despite that, Q3 result still looks good to me, especially considering that there’s the one-off cost of Citi integration.
The following is my anyhow projection. Do not believe in it.
IF I project Q4’s net profit to be the same as Q3, then total net profit for the year will be $5690 mil, which will be 24% higher than last year’s $4573 mil. Paying 50% of that out as dividend would mean 85 cents final dividend.
What about 2024? Just annualising $1382 mil would give $5528 mil. However, Citi integration cost will be tapered off and they are still projecting good growth for 2024 as shown below.
What will it be in the end? None of us will know as it really depends on the market. However, given that both CEO and CFO have been in the business for so long and they are known to be prudent, I do believe that they will not be too far off.
From the web presentation, I also learnt that UOB has invested $800 mil over the last 5 years in the region to get more fees businesses, which provide them another avenue of income beyond loan. If they can continue to grow this, then it will make their earning more resilient and reduce the impact of decreasing NIM in the future.
Finally, they have centralised technology platforms and it is not outsource as they believe that they need to have internal control over a crucial part of their operation.
Mapletree Industrial Trust
It’s a resilient quarter for MIT but it does look like quite a bit of work to do going forward.
- Continue to find tenants to fill up the space vacated by AT&T
- Increase occupancy at Mapletree Hi-Tech Park @ Kallang Way
- On-going divestment of assets such as flatted factories
While there will be a void in rental from the vacated space from AT&T, it should be at least partially mitigated from the new contribution from Osaka data centres and positive rental reversion. Also, the financing cost for the remainder of this financial year will be around 3.2% to 3.5%, hence the impact should be muted.
The group aims to get the occupancy at Mapletree Hi-Tech Park @ Kallang Way to hit 75% in the next 12 months. Hopefully, they can achieve that and also report some other good progress in other areas for the remaining two quarters. If not, then it would be more challenging for the next financial year as financing cost is likely to be higher.
Referral
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Moomoo (additional $20 reward)
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Keppel Electric
StocksCafe (code: TFI)
Webull
Web Cast
iFAST
UOB
Frasers Centrepoint Trust
Mapletree Logistics Trust
Mapletree Industrial Trust