Keppel DC Reit share price: 3 key trading highlights from H1 2020

Here are three key trading takeaways from Keppel DC Reit's (SGX: AJBU) latest financial update.

Keppel DC Real Estate Investment Trust (REIT) (SGX: AJBU) released its first half (H1) financial results for fiscal 2020 after the market closed on Tuesday 21 July 2020.

Here are three main highlights from the data centre-focused REIT’s latest financial update.

1. Keppel DC Reit increases DPU (dividend) by 13.6%

The company saw its gross revenue increase by 29.8% year-on-year in the first half of 2020 ended 30 June 2020 to S$124 million.

Net property income grew 32.1% to S$114.2 million in H1 2020, up from S$86.5 million in H1 2019.

Property expenses increased slightly by 8.1% year-on-year to S$9.7 million.

In light of the above, the firm delivered a distributable income of S$75 million for H1 2020, 38% higher compared to H1 2019. It attributed the higher distributable income to the acquisitions of Keppel DC Singapore 4 and DC1 in the last quarter of 2019, as well as the addition of Kelsterbach Data Centre in May 2020.

Accordingly, Keppel DC REIT declared a distribution per unit (DPU) of S$0.0438 for H1 2020, 13.6% higher than H1 2019’s S$0.039.

Based on Keppel DC Reit’s closing share price of S$2.540 on 30 June 2020, the REIT’s annualised distribution yield was 3.44%.

Read more: 5 Singapore REITs to watch for the rest of 2020 - Far East Hospitality Trust, Keppel REIT, A-REIT, CapitaLand Mall Trust and Frasers Centrepoint Trust

2. Outlook: ‘well-positioned to benefit’ from data centre growth

Keppel DC Reit’s manager Keppel DC Reit Management believes that while many business sectors have been adversely hit by the Covid-19 pandemic, the technology sector continues to perform well, with widespread lockdowns encouraging the adoption of digital tools.

As such, the management believes that the data centre industry remains resilient, as it continues to support data storage and processing requirements of the digital economy.

IG’s industry-leading CFD trading platform allows you to buy long and sell short Keppel DC Reit shares without having to trade the actual asset. Start today by opening a live or demo IG account.

The company further guided that the ‘prospects for the data centre market remain robust, underpinned by strong digital trends such as rapid cloud adoption, smart technologies, big‐data analytics, and 5G deployment’.

‘Keppel DC REIT remains well‐positioned to benefit from the growth of the data centre market, supported by its established track record and enlarged portfolio of assets,’ the company stated.

‘The Manager will continue to leverage its competencies in investment, asset and capital management, and build on Keppel Group’s capabilities in project development and facilities management, to seek opportunities and strengthen its presence across key data centre hubs globally.’

3. Keppel DC Reit share price target: what’s the latest?

Following the release of its H1 report, Keppel DC Reit shares rose nearly 3% in the first 30 minutes of trading on Wednesday 22 July to a new historic high of S$2.805 per share.

IG’s market analysis show that ‘buys’ form 56% of all trades on the Keppel DC Reit counter on Wednesday. Across the week, ‘sells’ form 62% of all trades so far.

In terms of client expectations, 80% of IG client accounts with open positions in this market anticipate that the price will rise, with the remaining 20% predicting a price decline.

Meanwhile, Refinitiv data showed that the stock has received an average rating of ‘hold’ from eight brokers. Five rated it ‘hold’, two rated it a ‘buy’ and one called ‘sell’ on the stock.

The same analysts gave the stock an average 18-month share price target of S$2.511, representing a downside of 8.7% from the last traded price.

Keppel DC Reit shares are trading at S$2.74 per share as at 14:15 SGT on 22 July 2020.

How to trade Singapore REITs with IG

Are you feeling bullish or bearish on Keppel DC Reit stocks? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  • Create a live or demo IG Trading Account, or log in to your existing account
  • Enter <Keppel DC Reit> in the search bar and select the instrument
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.