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Top Stock Market Highlights: CapitaLand Investment Limited, Yangzijiang Shipbuilding and Frasers Centrepoint Trust

Welcome to this week’s edition of top stock market highlights.

CapitaLand Investment Limited (SGX: 9CI)

The Ascott Limited, the wholly-owned lodging business unit of CapitaLand Investment Limited, or CLI, saw its fee-related earnings (FRE) jump 28% year on year to S$331 million.

The better performance was announced during CLI’s 2023 earnings which saw Ascott becoming a key contributor to the property giant’s earnings.

2023 also saw a record 9,600 units going operational.

The ongoing travel recovery boosted revenue per available unit (RevPAU), enabling it to grow 20% year on year from higher average daily rates and occupancies.

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A total of 77 new properties were signed in 2023, allowing The Ascott to surpass its year-end target of securing 160,000 units earlier than expected.

CEO of Ascott and CLI Lodging Kevin Goh has outlined plans for 2024.

Ascott will continue to drive asset-light growth organically using a mix of management and franchise agreements.

He also revealed that for 2023, 38% of new agreements signed were with existing owners, which demonstrates confidence in the Ascott brand.

To accelerate Ascott’s expansion, he is on the lookout for transformative deals and is committed to building its portfolio of brands to achieve higher-quality growth.

This positive momentum means that CLI’s lodging division is on track to generate more than S$500 million in FRE by 2028.

Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)

Yangzijiang Shipbuilding, or YZJ, reported a sparkling set of earnings for 2023.

The Chinese shipbuilder’s revenue rose 16.5% year on year to RMB 24.1 billion.

Gross profit leapt 69.2% year on year to RMB 5.4 billion with lower material costs while net profit surged by 57% year on year to RMB 4.1 billion.

YZJ generated a positive free cash flow of RMB 7.2 billion, nearly double the RMB 3.7 billion that was churned out a year ago.

For 2023, the shipbuilder declared a final dividend of S$0.065, 30% higher than the S$0.05 paid out in the previous year.

YZJ’s outstanding order book as of 31 December 2023 came in at US$14.5 billion for 182 vessels.

Demand for clean vessels continues to be a catalyst for the group to snag contracts as industry regulations tighten.

This year, the shipbuilder has seen its order win momentum continue with a contract win for 12 vessels valued at US$1.35 billion, of which six are methanol, dual-fuel 13,000 TEU containerships.

The outlook for the shipbuilding segment is bright because of the ongoing climate-related push by various authorities.

These mandates have prompted ship owners to replace their vessels as they slowly phase out non-compliant legacy vessels.

Global shipyard capacity is also limited, thus constraining supply which could lead to higher prices for YZJ’s vessels.

Frasers Centrepoint Trust (SGX: J69U)

It is time once again for the Straits Times Index (SGX: ^STI), or STI, quarterly review.

This round, FTSE Russell announced that there will be one change to the constituents for the 30-stock benchmark.

FTSE Russell partnered with SPH Media Trust along with Singapore Exchange Limited (SGX: S68) to jointly calculate Singapore’s Straits Times Index.

Frasers Centrepoint Trust, or FCT, will be added to the index at the start of business on 18 March while Emperador Inc (SGX: EMI) will be removed.

The STI reserve list, which contains a list of five companies that stand ready to substitute any index component that falls short of market capitalisation or liquidity requirements, saw two changes for this March 2024 review.

With FCT being included in the STI, the retail REIT was replaced by land transport giant ComfortDelGro Corporation Limited (SGX: C52).

Golden Agri-Resources (SGX: E5H) was also removed from the reserve list and replaced by office REIT Keppel REIT (SGX: K71U).

The remaining three names within the reserve list are the same as the previous quarter and comprise CapitaLand Ascott Trust (SGX: HMN), Keppel DC REIT (SGX: AJBU), and Suntec REIT (SGX: T82U).

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Disclosure: Royston Yang owns shares of Suntec REIT, Keppel DC REIT and Singapore Exchange Limited.

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