It’s not always easy to filter out good investment ideas.
A good way to start will be to watch out for companies that announce either acquisitions or interesting business developments.
These events usually translate to an uplift in earnings or dividends and may act as a catalyst for the share price to head higher.
We profile four Singapore stocks that recently announced acquisitions or favourable business developments.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a blue-chip real estate manager with S$134 billion of assets under management and S$100 billion of funds under management as of 31 March 2024.
In early July, CLI’s wholly-owned lodging unit, The Ascott Limited, announced several major milestones for its global expansion strategy.
Ascott added six new properties to its European portfolio with the debut of The Unlimited Collection brand and expansion of the lyf brand.
These new properties will boost Ascott’s portfolio in Europe by 14% to around 8,000 units across six brands and extend the brand’s presence to 29 cities, up from 24.
At the same time, Ascott also entered a strategic multi-year partnership with Chelsea Football Club and will become the official global hotel partner for the English Premier League club.
In line with this signing, Ascott will manage the 232-unit stadium hotels at London’s Stamford Bridge from the second half of this year.
These hotels will be rebranded as lyf Stamford Bridge London by the second half of 2025.
CEO for Ascott and CLU Lodging, Kevin Goh, mentioned that franchise management will be its next pillar of growth in Europe.
For existing properties, CLI will embark on asset enhancement initiatives that help elevate guests’ experience.
SATS Ltd (SGX: S58)
SATS provides end-to-end network solutions for airlines and is also an Asian aviation food services provider.
The group serves customers in more than 215 locations in 27 countries.
Last week, SATS announced a partnership with Mitsui Co to develop and grow their respective food and retail solutions businesses.
This partnership is the result of a memorandum of understanding signed a year ago between the two parties to explore a collaboration.
Once the partnership is signed, Mitsui will invest approximately S$36.4 million and hold a 15% partnership stake in SATS Food Solutions India, SATS Food Solution Thailand, SATS Tianjin, and Country Foods.
The idea is for Mitsui’s involvement to generate higher demand for SATS’ food solutions business.
This partnership is already yielding results in Japan, where SATS TFK is leveraging Mitsui’s extensive network to supply food components to prominent retail channels.
Plans are afoot to supply frozen meals to Muji Japan, a unit of Ryohin Keikaku (TYO: 7453), with a launch planned for the first quarter of 2025.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres across 10 countries worth S$3.8 billion.
Two weeks ago, the REIT announced its maiden acquisition of a data centre in Tokyo, Japan, for around S$201 million together with its sponsor Keppel Ltd (SGX: BN4).
Keppel DC REIT will own an effective 98.47% interest in this data centre which was completed in 2019 and is master-leased to a Fortune Global 500 company and hyperscaler.
With rental committed way back in the 2010s, the REIT manager believes that there is a good chance for positive rental reversion and organic rental growth.
The data centre REIT’s portfolio metrics will also be enhanced by this transaction.
Portfolio occupancy will improve from 98.1% to 98.5% with the REIT’s weighted average lease expiry (WALE) lengthening from 6.5 years to 6.6 years.
In addition, pro-forma distribution per unit (DPU) for 2023 should increase by 1.1% from S$0.09383 to S$0.09488.
This acquisition should be completed by the third quarter of this year and will increase the REIT’s aggregate leverage to 39.7% from the current 36.2%.
On the bright side, Keppel DC REIT’s cost of debt will fall from 3.6% to 3.3% with the taking up of a Japanese-Yen-denominated loan.
AEM Holdings (SGX: AWX)
AEM is a global leader in test innovation and provides comprehensive semiconductor and electronics test solutions for its clients.
In early July, the group announced the launch of a new burn-in capability for its high-parallel test platform, AMPS.
Named AMPS-BI, the system is a high-power, high-throughput and full-automated one featuring patented technology for thermal control.
AMPS-BI can perform accelerated high-voltage stress tests on advanced semiconductor devices such as artificial intelligence (AI) processors and high-performance computing units.
With this capability, AEM is well-equipped to test the reliability of AI chips and more complex devices.
This new technology also offers customers a scalable solution that helps to reduce test times and increase overall test coverage.
Amy Leong, the new CEO of AEM Holdings, is confident that this new generation of burn-in systems will significantly help AI chip designers, foundries, and similar customers to accelerate their developmental roadmaps.
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Disclosure: Royston Yang owns shares of Keppel DC REIT.
