First Reit | Hold July 19 close: S$1.345 Target price: S$1.38 OCBC Investment Research, July 19

FIRST Reit (FREIT) reported an in-line set of results for Q2-2017, with gross revenue and net property income (NPI) growing 3.3 per cent year on year and 3.2 per cent year on year to S$27.5 million and S$27.2 million, respectively. Distribution per unit (DPU) increased 1.4 per cent year on year to 2.14 Singapore cents, forming 25.6 per cent of our full-year projection. Looking ahead, we are encouraged by positive Singapore inflation data, which should augur well for FREIT's base rental revisions in Indonesia. Further ahead, gross revenue is projected to receive a boost in H2-2020, on the back of the Siloam Hospitals Surabaya asset swap. We note that FREIT's current gearing ratio of 31 per cent, as at June 30, 2017, leaves it with ample debt headroom for accretive acquisitions. We deem such developments likely in H2-2017, which would boost our DPU estimates accordingly. For now, we maintain our "hold" rating but increase our fair value estimate from S$1.32 to S$1.38.

Keppel Reit | Buy July 19 close: S$1.15 Target price: S$1.30 UOB Kay Hian, July 19