REIT-vitalisation of China\u2019s economy.<\/strong><\/p>\n\n\n\n Recent asset enhancement initiatives (AEIs) at the Kunming and Hefei outlets, including improving retail layouts and adding parking spaces, have enhanced the shopping experience and increased foot traffic. Plans to install energy-efficient air-conditioning systems at the Chongqing Liangjiang Outlet between 2025-2027 are expected to improve operational efficiency and cost savings.<\/p>\n\n\n\n China\u2019s one-year loan prime rate (LPR) and over-five-year LPR remained unchanged at 3.1% and 3.6%, respectively. Although rates have remained flat recently, cumulative reductions in 2023 totaled 35 basis points for the one-year rate and 60 basis points for the over-five-year rate, marking the largest annual cuts on record. Further LPR reductions could be introduced as part of China\u2019s counter-cyclical monetary policies aimed at supporting economic growth. These policies would benefit Sasseur REIT by lowering borrowing costs for both onshore and offshore RMB-denominated loans, creating a more accommodative monetary environment, enhancing Sasseur REIT\u2019s ability to refinance at lower interest rates, and improving its overall financial flexibility.<\/p>\n\n\n\n We maintain our OUTPERFORM<\/strong> rating on Sasseur REIT with a target price of S$0.90<\/strong>, derived from a Dividend Discount Model (DDM) incorporating an 8.7% cost of equity and a 1.5% terminal growth rate. Our confidence in Sasseur REIT\u2019s ability to deliver stable and resilient returns is underpinned by its strong management team, effective tenant mix strategy, and a 3% annual escalation in fixed rental income, which collectively support its long-term growth and income stability.<\/p>\n\n\n\n A higher-than-expected drop in DPU could occur if the sponsor is unable to support the 60% to 70% fixed income component. RMB depreciation is another risk factor given that 100% of sales are derived from China\u2019s retail spending.<\/p>\n\n\n\n China Sunsine Chemical Holdings is a leading specialty rubber chemicals producer selling accelerators, anti-oxidant, vulcanizing agent<\/p>\n","protected":false},"author":16,"featured_media":64237,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_uag_custom_page_level_css":"","footnotes":""},"categories":[14],"tags":[],"class_list":["post-64236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-reports"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n
\n\n\n\nStrategic asset enhancements driving value<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n
China\u2019s interest rate stability and potential for future cuts<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n
Valuation & Action<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n
Risks<\/strong><\/strong><\/strong><\/strong><\/strong><\/h2>\n\n\n\n
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