United Hampshire US REIT (UHU SP): Continued growth and expansion
BUY Entry – 0.48 Target– 0.52 Stop Loss – 0.46
United Hampshire US REIT operates as a real estate investment trust. The Company owns and operates shopping, storage, grocery, and necessity-based retail properties.
Favorable interest rate environment. The Federal Reserve cut interest rates by 25bps in December 2024, bringing the target range to 4.25% to 4.50%. Lower borrowing costs are expected to enhance United Hampshire US REIT’s financial flexibility and support growth. Projections for the Fed funds rate indicate a range of 3.50% to 3.75% by the end of 2025 and 3.25% to 3.50% by the end of 2026.
Strategic divestments. United Hampshire US REIT successfully divested properties, including Lowe’s and Sam’s Club in 2H24 and Supermarket at Albany in January 2025, at over 4% above valuation, demonstrating strong capital recycling efforts.
Strong demand for grocery-anchored strip centers amid limited new supply. Grocery-anchored retail properties remain highly resilient, with grocery store foot traffic increasing 12% from 2019 to 2024, according to Green Street. Service-based tenants, such as coffee shops, salons, and medical centers, further boost footfall, reinforcing the sector’s long-term stability. Hybrid work arrangements have also shifted consumer behavior, increasing demand for localized shopping experiences. Market rent growth for strip centers remained above historical averages in 2024, with a projected 3% annual growth from 2025 to 2029. Investment activity underscores confidence in the sector, Blackstone made its largest retail investment since 2011, acquiring 90 shopping centers for US$4bn, while CBRE expects US$10bn in open-air retail transactions in 2025. Despite strong demand, new strip mall construction remains constrained due to high costs, requiring a 65% rent increase to justify development. This gives existing landlords, including UHU REIT, strong pricing power to negotiate rent increases, securing long-term income growth. With a 97.5% committed occupancy rate and WALE of 8.1 years, UHU REIT is well-positioned to capitalize on these market dynamics.
2H24 results review. Revenue increased 0.4% YoY to US$36.4mn, while net property income dipped 1.6% to US$24.4mn, mainly due to divestments and higher property expenses. DPU declined 4.2% to 2.05 US cents, reflecting higher finance costs.
We have fundamental coverage with a BUY recommendation and a TP of S$0.60. Please read the full report here.
Market Consensus.
(Source: Bloomberg)
Singapore Airlines Ltd (SIA SP): Poised for growth
Singapore Airlines Limited provides air transportation, engineering, pilot training, air charter, and tour wholesaling services. The Company’s airline operation covers Asia, Europe, the Americas, South West Pacific, and Africa.
Jet fuel price to remain low. The jet fuel market is expected to maintain relatively low prices in early 2025, continuing the trend from late 2024. The International Air Transport Association (IATA) projects an average jet fuel cost of US$87/bbl, or US$2.0714/gal, with total fuel expenditures expected to drop to US$248 billion nearly 5% lower than in 2024. While refinery disruptions could temporarily impact prices, overall stability is expected. Additionally, fuel costs are projected to comprise 26.4% of total airline expenses, down from 28.4% in 2024, contributing to improved profitability for airlines. As of the week ending 28 February 2025, the global average jet fuel price fell 3.9% compared to the week before to US$91.46/bbl.
SIA to Benefit from Changi Airport’s Growth in 2025. Changi Airport is on track for continued growth in 2025 after handling 67.7 million passengers in 2024, reaching 99.1% of pre-pandemic levels. With a projected 3%-5% increase in passenger traffic this year, the airport is set to capture a larger share of regional aviation growth, supported by strong demand, new routes, and airline expansions. Ongoing S$3 billion infrastructure upgrades will further enhance its position as a leading global hub. Singapore Airlines (SIA) is well-positioned to benefit from Changi’s expansion, particularly through transit traffic growth, which is expected to offset softer visitor arrivals. As competition among regional hubs intensifies, SIA’s strategic expansion, premium offerings, and focus on transit passengers will help strengthen its market position. The airline’s efficient hub operations, strong brand, and expanding long-haul network will reinforce its leadership in the Asia-Pacific aviation market.
Scoot Expands European Network with New Vienna Route. Scoot, the low-cost subsidiary of Singapore Airlines Group, will launch direct flights between Singapore and Vienna starting June 3rd, operating three times weekly on Boeing 787-8 Dreamliners. Vienna will become Scoot’s second European destination after Athens, further expanding its footprint in the region. To optimize network efficiency, Scoot will suspend services to Berlin, which were previously operated via Athens. The new Vienna route reflects the airline’s strategy to adjust capacity based on demand, while maintaining connectivity between Singapore and key European cities.
1H24 results review. Revenue rose S$335 million, a 3.7% YoY increase to S$9,497 million, with passenger flown revenue up S$118 million and cargo flown revenue higher by S$42 million. Increased competition and higher passenger capacity in key markets exerted pressure on yields, which fell 5.6%. On the cargo front, yield was 13.4% lower amid the continued recovery in bellyhold capacity. The demand for air travel remained healthy in the first six months, with SIA and Scoot carrying 19.2 million passengers, a 10.8% YoY increase. However, passenger traffic growth of 7.9% trailed the SIA Group’s passenger capacity expansion of 11.0%, resulting in a 2.4 percentage point decline in Group passenger load factor (PLF) to 86.4%. SIA and Scoot achieved PLFs of 85.7% and 88.6% respectively. The Group posted a net profit of S$742 million, a 48.5% YoY decline, primarily due to the weaker operating performance.
Market Consensus.
(Source: Bloomberg)
Alibaba Group Holdings Ltd. (9988 HK): Driving China’s digital future
BUY Entry – 138 Target – 160 Stop Loss – 127
Alibaba Group Holding Ltd provides technology infrastructure and marketing platforms. The Company operates through seven segments. China Commerce segment includes China retail commerce businesses such as Taobao, Tmall and Freshippo, among others, and wholesale business. International Commerce segment includes international retail and wholesale commerce businesses such as Lazada and AliExpress. Local Consumer Services segment includes location-based businesses such as Ele.me, Amap, Fliggy and others. Cainiao segment includes domestic and international one-stop-shop logistics services and supply chain management solutions. Cloud segment provides public and hybrid cloud services like Alibaba Cloud and DingTalk for domestic and foreign enterprises. Digital Media and Entertainment segment includes Youku, Quark and Alibaba Pictures, other content and distribution platforms and online games business. Innovation Initiatives and Others segment include Damo Academy, Tmall Genie and others.
Strong government support. At the recent National People’s Congress, China announced a 10% increase in science and technology spending, allocating RMB398bn (US$55bn). The government aims to foster AI model applications, quantum computing, and 6G technologies, alongside publishing an AI education White Paper to expand its tech talent pool. The government aims to create a more innovation-friendly environment by fostering national laboratories, supporting young scientists, and improving data systems. AI development is a key focus, with increased backing for large-scale models and intelligent manufacturing. This supportive environment is expected to accelerate Alibaba’s AI innovations, enhance its cloud offerings, and solidify its role in China’s digital transformation.
Unveiling its AI model. Alibaba announced its QwQ-32B AI reasoning model, which it claims performs comparably to DeepSeek’s R1 despite having far fewer parameters. Accessible via Qwen Chat, the model enhances Alibaba’s chatbot services and strengthens its AI leadership. With China pushing AI adoption across industries, Alibaba is poised to benefit from rising demand for AI-powered solutions, boosting its cloud business and investor confidence.
AI and cloud investment roadmap. Alibaba’s RMB380bn (US$70bn) investment in cloud computing and AI infrastructure over the next three years surpasses its decade long spending in the sector. As China’s top cloud provider with a 36% market share as of 3Q24 and 13% YoY cloud revenue growth in 4Q24, mainly driven by the double-digit revenue growth of public cloud products, Alibaba’s investment is expected to enhance its AI and cloud capabilities, attract enterprise customers, and drive long-term growth.
4Q24 results review. Revenue increased 8% YoY to RMB280.2bn in 4Q24, compared with RMB260.3bn in 4Q23. Net income rose by 333% YoY to RMB46.4bn in 4Q24, compared to RMB10.7bn in 4Q23. Diluted earnings per share increased to RMB2.55 in 4Q24, compared to RMB0.71 in 4Q23.
Market consensus.
(Source: Bloomberg)
China Resources Power Holdings Co Ltd (836 HK): Continued growth in electricity demand
China Resources Power Holdings Company Limited is a Hong Kong-based investment holding company principally engaged in the investment, development and operation of power plants. The Company operates through three segments. Thermal Power segment is engaged in the investment, development, operation and management of coal-fired power plants and gas-fired power plants, as well as the sales of heat and electricity. Renewable Energy segment is engaged in wind power generation, hydroelectric power generation and photovoltaic power generation, as well as the sales of electricity. Coal Mining segment is engaged in the mining of coal mines, as well as the sales of coal. The Company mainly operates businesses in China.
Robust Electricity Demand Growth in China. According to the IEA’s Electricity 2025 report, global electricity demand is set to accelerate, with emerging and developing economies driving 85% of additional consumption over the next three years. China, in particular, has experienced electricity demand outpacing GDP growth since 2020. Consumption rose 7% in 2024 and is expected to grow at an average rate of 6% annually through 2027. This increase is largely driven by industrial demand, including energy-intensive manufacturing in sectors such as solar panels, batteries, electric vehicles, and associated materials. As China’s power consumption continues to climb, China Resources Power Holdings stands to benefit significantly from sustained demand growth.
Strong Growth in Renewable Energy Generation. Despite an overall decline in energy generation in January—primarily due to an 11.0% YoY drop in thermal power output and the impact of the Chinese New Year holiday—China Resources Power Holdings saw significant growth in its renewable energy segment. Wind power generation increased 14.1% YoY to 4,266,011 MWh, solar (photovoltaic) power generation surged 45.4% YoY to 565,676 MWh, while hydropower generation rose 18.9% YoY to 162,395 MWh. This strong performance underscores the company’s strategic shift towards renewable energy expansion, aligning with China’s clean energy transition goals. As government policies continue to support renewable energy adoption, China Resources Power Holdings is well-positioned to benefit from rising demand and favorable regulatory tailwinds.
Optimizing Capital Structure to Support Future Growth. In late 2024, China Resources Power Holdings raised HK$3.89bn through a share placement aimed at debt repayment and corporate management initiatives. The company placed 198.5mn shares (over 4% of total share capital) at HK$19.70 per share, a 5.1% discount to the last closing price of HK$20.75 on October 22. In a separate transaction, it issued 168.1mn shares to its controlling shareholder, China Resources (Holdings), under a subscription agreement for HK$3.31bn. These capital-raising efforts enhance financial flexibility, optimize the company’s capital structure, and provide resources to fuel future expansion. With a stronger balance sheet, China Resources Power Holdings is well-positioned to support its renewable energy ambitions and long-term growth strategy.
1H24 earnings. Revenue fell marginally by 0.71% YoY to HK$51.1bn in 1H24, compared to HK$51.5bn in 1H23. Net profit increased by 40.6% to HK$9.95bn in 1H24, compared to HK$7.08bn in 1H23. Basic EPS rose to HK$1.95 in 1H24, compared to a basic EPS of HK$1.40 in 1H23.
Market consensus.
(Source: Bloomberg)
Philip Morris International Inc (PM US): Zyn-ergy in action
BUY STOP Entry – 150 Target – 170 Stop Loss – 140
Philip Morris International Inc. operates as a tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The Company offers cigarettes, e-vapor, and oral smoke-less products. Philip Morris International serves customers worldwide.
Potential sale of business. Philip Morris (PM) International’s decision to explore the sale of its U.S. cigar business aligns with its broader strategy to transition away from traditional tobacco products. By divesting this asset, the company can reallocate resources toward its growing smoke-free product portfolio, such as Zyn nicotine pouches and IQOS heated tobacco devices. This shift not only supports long-term revenue growth but also enhances PM’s positioning in the evolving nicotine market. The expected US$1bn sale proceeds could fund further innovation and expansion, accelerating its goal of achieving two-thirds of sales from smoke-free products by 2030.
Decline in smoking rates. With global smoking rates continuing to fall due to health concerns and regulatory pressures, PM’s pivot toward alternative nicotine products is a crucial move. Traditional cigarettes face declining demand, but the company’s strong performance in Zyn and IQOS demonstrates its ability to adapt to changing consumer preferences. By focusing on harm-reduction alternatives, PM ensures revenue stability despite a shrinking cigarette market. This proactive approach not only mitigates risks associated with declining smoking trends but also strengthens the company’s position as an industry leader.
FDA approved. The FDA’s authorization of Zyn nicotine pouches marks a major milestone for PM, validating its harm-reduction strategy and providing a competitive edge in the U.S. market. With official regulatory backing, PM can further promote Zyn as a safer alternative to traditional tobacco, attracting more adult smokers looking to switch. This approval also opens doors for expansion into other regions where similar regulatory acceptance could drive growth. As health-conscious consumers seek alternatives, PM is well-positioned to capitalize on the increasing demand for smokeless nicotine products.
4Q24 results. Revenue grew 7.3% YoY to US$9.71bn, beating estimates by US$270mn. Non-GAAP EPS was US$1.55, beating expectations by US$0.05. The company projected FY25 adjusted annual earnings per share in the range of US$7.04 to US$7.17, above analysts’ estimate of US$7.03. It also forecast ZYN shipments to the U.S. would rise by between 34% and 41% in 2025, while IQOS shipments would also see between 10% and 12% growth.
Market consensus
(Source: Bloomberg)
Waste Management Inc (WM US): Unshaken by inflation
Waste Management Inc, through its subsidiaries, provides environmental solutions for residential, commercial, industrial, and municipal customers in the United States, Canada, Western Europe, and other international regions.
Resilient business model. The company’s operating model is similar to a public utility, providing essential waste management services that maintain consistent demand regardless of economic conditions. This allows the company to sustain stable growth even during economic uncertainty or periods of inflation. While macroeconomic fluctuations (such as tariff policies) may impact broader markets, the necessity of waste management services ensures the company’s importance and resilience.
Synergies from acquisitions. Last year, the company successfully acquired Stericycle for $7.2 billion, making it a leader in the medical waste recycling market. It expects to generate $250 million in synergies over the next three years. For fiscal year 2025, the company anticipates revenue between $25.55 billion and $25.8 billion, demonstrating confidence in its growth potential.
4Q24 results. Revenue grew 12.8% YoY to US$5.89bn, missing estimates by US$20mn. Non-GAAP EPS was US$1.70, missing expectations by US$0.10. The company projected FY25 revenue of between US$25.55bn to US$25.80bn.
