Stock Analysis: ParkwayLife Reit | Lianhe Zaobao
Parkway Life REIT recommends a buy with a target price of SGD 4.85, closing price at SGD 4.05 (+0.25%). The distribution per unit (DPU) for the third quarter of fiscal year 2025 is 11.56 cents, a year-on-year increase of 2.3%, with distributable income increasing by 10.4% year-on-year to SGD 75.4 million, mainly benefiting from the acquisition of nursing homes in Japan and France and the appreciation of the yen. Total revenue and net property income increased by 8.2% and 8.1% year-on-year, respectively. Despite the uncertain interest rate environment, the healthcare sector remains defensive, supporting continuous growth in distributions
Parkway Life REIT
- Recommendation: Buy
- Target Price: SGD 4.85
- Closing Price: SGD 4.05 (+0.25%)
The trust's Distribution Per Unit (DPU) for the third quarter of the fiscal year 2025 reached 11.56 cents, a year-on-year increase of 2.3%, accounting for 74.5% of the full-year forecast; distributable income also grew by 10.4% year-on-year to SGD 75.4 million, mainly driven by contributions from nursing homes acquired in Japan and France, as well as a moderate appreciation of the yen.
Total revenue and net property income increased by 8.2% and 8.1% year-on-year, respectively, to SGD 117.3 million and SGD 110.7 million.
Despite the uncertainty in the interest rate environment and a slight increase in the trust's borrowing costs, the healthcare sector is more defensive compared to real estate investment trust stocks, especially considering the rise of medical tourism and the aging population trend in Japan. Additionally, the trust's stable rental income structure is expected to support continuous growth in distributions. (OCBC Investment Research)
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