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Despite the positives, the valuation is not compelling, with the stock trading at 1.4 times price-to-book value (P/BV) and a dividend yield of 5%.
SEE: Ascendas REIT declares 0.9% drop in 2H20 DPU to 7.418 cents, 6.1% lower FY2020 DPU of 14.688 cents
Maybank’s Chua Su Tye has also maintained his target price of $4. “Management has stayed with the rental reversion guidance into FY2021. Fundamentals remain strong, backed by its scale, rising DPU visibility, growth levers from a strong balance sheet, and further overseas diversification,” he writes in a Feb 3 report. As the REIT’s management has guided for a low single-digit positive reversion for 2021, Chua remains optimistic on its rental growth, which is likely to be led by its business parks, suburban office and logistics space.