Digital Core REIT: Strong Fundamentals and Growth Opportunities
Digital Core REIT, a leading pure-play data center REIT listed in Singapore, declared a distribution per unit (DPU) of 1.80 U.S. cents for the six months ended 31 December 2024, payable on 28 March 2025. The portfolio comprises ten mission-critical facilities valued at US\$1.6 billion, with properties located across the United States, Canada, Germany, and Japan. The REIT reported a cash rental rate reversion of 4.3% on renewal leases, with an impressive portfolio occupancy of 96.7% as of 31 December 2024. Weighted average lease expiration stands at 4.8 years.
In 2024, Digital Core REIT achieved US\$74 million in annualized rent through new and renewal leases. The REIT also undertook significant investment activity, including the sale of two Silicon Valley properties for US\$178 million and acquisitions in Osaka and Frankfurt, reflecting confidence in its long-term growth.
On the financial side, the REIT repurchased 27 million units in 2024, generating a DPU accretion of 1.8%. Aggregate leverage stood at 34% with a weighted average cost of debt at 4.2%, and 86% of total interest exposure was hedged. Digital Core REIT is currently trading at 7% yield and 0.8x book value. With a 50% upside to the consensus target price of US\$0.78, the recommendation remains an “Accumulate.”
iFast Corporation: Record Performance and Bright Prospects
iFast Corporation delivered an outstanding performance for FY2024, with its assets under administration (AUA) growing 26.2% YoY to a record-high S\$25.01 billion. The company reported net inflows of S\$3.30 billion for the year, supported by enhancements to its wealth management platform and a turnaround at iFAST Global Bank (iGB).
For 4Q2024, total revenue increased 26.7% YoY to S\$104.14 million, while net revenue rose 13.6% YoY to S\$64.90 million. Net profit for the quarter surged 46.3% YoY to S\$19.28 million. For the full year, total net revenue increased 53.6% YoY to S\$248.38 million, while net profit soared 135.7% YoY to S\$66.63 million. Non-banking operations also performed well, with profit before tax growing 89.9% YoY to S\$88.19 million.
iFAST Global Bank achieved profitability in 4Q2024, marking a major milestone since its acquisition in March 2022. Customer deposits crossed S\$1.01 billion, growing 182.6% YoY. The company’s ambitious three-year plan (2025-2027) includes scaling its platform to target AUA of S\$100 billion by 2028-2030, enhancing digital banking services, and ramping up its ePension division. Despite its strong growth story, iFast’s valuation appears high, trading at 20.7x forward PE and 7.2x P/B. The recommendation is a “Hold.”
Other Companies: Performance Highlights and Insights
Huawei: Strong Revenue Performance
Huawei achieved annual revenue of 860 billion yuan in 2024, marking a 22% YoY growth. The company’s consumer business recovered strongly, driven by locally-made chipsets. Huawei also captured a 16% share of the Chinese smartphone market, overtaking Apple.
Frasers Logistics Trust
Frasers Logistics Trust reported a forward dividend yield of 7.59%, reflecting its robust performance in the logistics sector.
Mapletree Pan Asia Commercial Trust
Mapletree Pan Asia Commercial Trust demonstrated a dividend yield of 6.86%, positioning itself as a strong player among REITs.
DBS Bank
DBS Bank continues to be a top pick among retail investors, with a net buy flow of S\$94.3 million during the week of 3 February 2025. The bank declared a final dividend of 60 cents per share, payable in April 2025.
Jardine Matheson
Jardine Matheson reported a forward dividend yield of 7.83%, maintaining its attractiveness for dividend-focused investors.
Sembcorp Industries
Sembcorp Industries, with a forward dividend yield of 9.91%, continues to appeal to investors seeking high returns.
Market Trends and Observations
The FSSTI Index closed at 3,874.6, up 0.4% for the day. Globally, the U.S. and other major markets showed mixed performances due to macroeconomic uncertainties. Institutional investors reported a net sell of S\$130.6 million for the week, while retail investors showed a net buy of S\$256.6 million, indicating a potential shift in sentiment.
Key sectors such as REITs and technology experienced divergent trends, with retail investors showing strong interest in these areas. Companies like SGX and Singtel were among the top institutional net buys, while DBS and OCBC led retail net purchases.
Dividend Announcements
Several companies announced dividends, including:
- Capland India Trust: 3.2 cents
- Paragon REIT: 2.2 cents
- Digital Core REIT: 1.8 U.S. cents
- DBS Group Holdings: 60 cents
- iFAST Corp: 1.6 cents
