AJBU Stock Fair Value – Keppel DC Reit’s Inclusion in STI Tenuous as Seatrium May Not Join in June: DBS

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This leaves Keppel ($SGX:AJBU) DC Reit in a precarious position, as the index may not include them this June. Keppel DC Reit is managed by Keppel Capital and invests in quality data centres located in Asia Pacific, Europe, the United States and Brazil. It provides investors with stable income and capital growth in a transparent structure, with a portfolio of data centres located in Singapore, London, Amsterdam, Frankfurt, Tokyo and Sydney. The REIT has a diverse customer base with customers including telcos, ISPs, cloud and IT service providers, financial services companies, and other enterprises.

Given the uncertainty surrounding its inclusion in the STI, investors are advised to take caution when considering investments in Keppel DC Reit. On one hand, it may be an attractive option for those seeking returns from data centre investments; however, should it fail to join the STI, market sentiment may be impacted.

Price History

On Friday, Keppel DC Reit’s stock opened at SG$2.0 and closed higher at SG$2.1, up by 2.5% from its last closing price of $2.0. However, according to a report by DBS, the inclusion of Keppel DC Reit in the Singapore stock exchange’s Straits Times Index (STI) may remain tentative as Seatrium, its sponsor, may not join the index at the June review. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for AJBU. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for AJBU. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for AJBU. More…

Key Ratios Snapshot

Some of the financial key ratios for AJBU are shown below. More…

Analysis – AJBU Stock Fair Value

GoodWhale has conducted an analysis of KEPPEL DC REIT’s fundamentals and our proprietary Valuation Line indicates that the fair value of KEPPEL DC REIT’s share is around SG$2.6. Currently, KEPPEL DC REIT’s stock is traded at SG$2.1 which is a fair price which is undervalued by 19.3%. This provides investors with the potential to invest in KEPPEL DC REIT at a discount and potentially gain a return on their investment. More…

Peers

Keppel DC REIT is one of the leading data centre real estate investment trusts (REITs) in Asia Pacific and is managed by Keppel Capital Holdings Pte Ltd. It is listed on the Singapore Exchange (SGX) and has a portfolio of eight data centres located across Singapore, the Netherlands, Australia and Ireland. Keppel DC REIT’s main competitors include Mapletree Industrial Trust, MREIT Inc, and CapitaLand Ascendas REIT, all of which are also listed on the SGX and have similar portfolios of data centres in different locations in Asia and Europe.

– Mapletree Industrial Trust ($SGX:ME8U)

Mapletree Industrial Trust is a Singapore-based real estate investment trust that was established in 2005. The trust invests in a diversified portfolio of income-producing industrial real estate in Singapore. As of 2023, Mapletree Industrial Trust has a market capitalization of 6.46 billion dollars. This makes it one of the largest industrial REITs in Asia, with over 34 million square feet of gross floor area in strategic locations across Singapore. The trust’s portfolio includes a mix of business parks, logistics, and hi-tech industrial properties, which provide stable, long-term income and capital growth potential to its unitholders.

– MREIT Inc ($PSE:MREIT)

MREIT Inc is a mortgage real estate investment trust (REIT) that invests in a variety of mortgage-backed securities, residential and commercial mortgage loans, and other real estate-related assets. As of 2023, MREIT Inc has a market capitalization of 36.82 billion, making it one of the largest REITs in the world. Through its investments, MREIT Inc seeks to generate income and capital appreciation for its shareholders by delivering attractive risk-adjusted returns. The company takes advantage of its large portfolio and diversified investments to mitigate the risk of default and benefit from the strong performance of the U.S. housing market over the years.

– CapitaLand Ascendas REIT ($SGX:A17U)

CapitaLand Ascendas REIT is one of the largest real estate investment trusts in Asia, with a market cap of 12.19 billion as of 2023. The REIT manages a portfolio of industrial and business space properties located in Singapore, China, India, Australia, and other key Asian markets. The REIT’s portfolio consists mainly of industrial and business parks, science parks, hi-tech industrial estates, IT parks, office buildings and serviced apartments. It is a joint venture between CapitaLand Limited and Ascendas-Singbridge Group, and is listed on the Singapore Exchange (SGX). It has a diversified portfolio of properties across Asia, with a focus on income generation and capital preservation.

Summary

Investing in Keppel DC Reit is a risky decision as the company’s position in the Straits Times Index (STI) is uncertain. According to DBS Group Research, SEATRIUM may not be included in STI which puts Keppel DC Reit’s position in the index at risk of exclusion. The company has seen a decrease in its stock price in the past few months. Investors should be aware of the risk when considering investing in Keppel DC Reit and should conduct further research before investing.