Schneider Electric SE (SU FP): Riding Secular Trends

Recommendation: BUY

Fair Value Estimate: EUR 271

Schneider Electric SE stands poised to benefit from numerous secular trends, despite temporary headwinds. While the artificial intelligence (AI) sector has been under scrutiny due to concerns over energy intensity, Schneider Electric’s diverse portfolio enables it to remain resilient. Its exposure extends beyond AI to critical areas like grid modernisation and building decarbonisation, ensuring it remains a vital player in the market.

Recent CAPEX announcements from hyperscalers suggest no major negative impacts for Q4 2024, though later quarters in 2025 could show some effects from the DeepSeek AI model’s energy concerns. Schneider does not report orders directly but provides annual backlog data, giving investors a glimpse into its operational health. Proxies like ABB’s Electrification division and Siemens Smart Infrastructure division will be closely monitored for industry trends.

For 2025, management is likely to project 6-9% organic growth and 40-60 basis points in adjusted EBITA margin progression. With no anticipated negative foreign exchange effects, the consensus aligns with a 7.9% organic growth forecast and 60bps margin improvement. High inflation and macroeconomic uncertainties remain risks, but Schneider’s strong ESG framework and sustainable offerings solidify its position as a quality investment.

AIMS APAC REIT (AAREIT SP): A Steady Performer

Recommendation: BUY

Fair Value Estimate: SGD 1.49

AIMS APAC REIT continues to demonstrate stability in its financial performance. For the financial year ending March 2025, its distribution per unit (DPU) rose by 1.1% year-on-year to 7.07 Singapore cents, aligning with expectations. Strong rental reversions were a key highlight, with an average of 28.2% recorded in Q3FY25, although management anticipates moderation in rental growth as signing rents align with market rates.

Despite a slight decline in portfolio occupancy from 96.7% to 96.4%, management remains optimistic, describing the drop as transitory. The REIT successfully backfilled 80% of vacated space at 20% higher rents, showcasing its operational resilience. However, net property income (NPI) margins have compressed due to higher property taxes and energy costs, falling to 71.6% from 74.3% in the prior year.

AAREIT also clinched an opportunistic divestment of its property at 3 Toh Tuck Link, achieving a 32.5% premium to the last valuation. The sale is expected to complete in Q4FY25. The REIT’s debt profile remains strong, with an average cost of debt at 4.4% and no maturing debt for FY25 and FY26. ESG initiatives, such as rooftop solar panel installations, have further enhanced its environmental score, making AIMS APAC REIT an attractive investment.

Keppel DC REIT (KDCREIT SP): A Solid Turnaround Story

Recommendation: BUY

Fair Value Estimate: SGD 2.43

Keppel DC REIT has emerged as a solid turnaround story, gaining investor confidence. The REIT’s focus on data centres aligns with increasing digitalisation trends, and it continues to deliver strong operational performance. While specifics on recent financial metrics were not disclosed in this report, its consistent performance underscores its stability. Investors can look forward to continued growth driven by its strategic positioning in the digital infrastructure sector.

CapitaLand Ascott Trust (CLAS SP): Stability Returns

Recommendation: BUY

Fair Value Estimate: SGD 0.99

CapitaLand Ascott Trust is transitioning from exceptionalism to stability, reflecting its robust fundamentals. The trust remains well-positioned in the hospitality sector, leveraging its global footprint and diversified asset base. Its ability to maintain stable distributions despite market fluctuations highlights its resilience and operational efficiency.

Starhill Global REIT (SGREIT SP): Steady Performance

Recommendation: HOLD

Fair Value Estimate: SGD 0.50

Starhill Global REIT delivered steady results with no major surprises. Its diversified portfolio of retail and office assets continues to provide consistent income streams. The “HOLD” recommendation reflects a balanced risk-reward profile, with limited upside potential in the near term.

OUE REIT (OUEREIT SP): Preparing for the Future

Recommendation: BUY

Fair Value Estimate: SGD 0.345

OUE REIT is gearing up for the future with strategic initiatives aimed at enhancing its portfolio. Its focus on asset enhancements and operational improvements positions it well for long-term growth. Investors are advised to consider this REIT for its potential to deliver steady returns.

Mapletree Pan Asia Commercial Trust (MPACT SP): Mixed Results

Recommendation: BUY

Fair Value Estimate: SGD 1.48

Mapletree Pan Asia Commercial Trust continues to exhibit resilience in its Singapore portfolio, although overseas weakness remains a drag. The trust’s ability to navigate challenging market conditions underscores its strong management and strategic foresight.

Mapletree Industrial Trust (MINT SP): A Mixed Quarter

Recommendation: BUY

Fair Value Estimate: SGD 2.71

Mapletree Industrial Trust reported a mixed quarter, balancing challenges with opportunities. The trust remains a strong contender in the industrial and logistics space, with a focus on long-term growth and sustainability.

Frasers Centrepoint Trust (FCT SP): Healthy Outlook

Recommendation: BUY

Fair Value Estimate: SGD 2.45

Frasers Centrepoint Trust continues to demonstrate a clean bill of health, with stable operations and a strong portfolio of retail assets. Its focus on suburban malls provides a defensive edge in uncertain times.

Mapletree Logistics Trust (MLT SP): Subdued Yet Stable

Recommendation: BUY

Fair Value Estimate: SGD 1.61

Mapletree Logistics Trust delivered subdued results as expected, reflecting the challenging market environment. However, its diversified portfolio and strong management continue to make it an attractive investment.

Apple Inc. (AAPL SP): Pricing in Challenges

Recommendation: BUY

Fair Value Estimate: USD 259

Apple remains a market leader despite challenges in the tech sector. Its ability to innovate and maintain a loyal customer base positions it for continued success. The “BUY” recommendation reflects confidence in its long-term growth prospects.