Core Viewpoint - The upcoming earnings season for 2025 is anticipated to present investment opportunities, particularly in blue chip stocks that are expected to provide stability and potential upside as companies report their results in early 2026 [1] Group 1: Keppel DC REIT - Keppel DC REIT operates data centres across Asia, Australia, and Europe, with 72% of its revenue generated from Singapore in H1 2025 [3] - The REIT's financial performance has shown significant growth, with gross revenue increasing by 34.4%, net property income by 37.8%, and distribution per unit by 12.8% in H1 2025 [4] - The REIT is expected to benefit from falling interest rates, which have been reduced to a range of 3.5% to 3.75% by the US Federal Reserve, potentially lowering finance costs and increasing distributions to investors [4][5] - The increasing adoption of AI is anticipated to drive demand for data centres, further benefiting Keppel DC REIT [6] - Keppel DC REIT has the lowest gearing among its peers, with an aggregate leverage of 29.8%, providing it with more capacity for growth and resilience against economic disturbances [6][7] Group 2: Singapore Telecommunications (SingTel) - SingTel, Singapore's leading telecommunications provider, has shown positive financial momentum, with group revenue increasing by 1.9% and underlying net profit by 16.7% in H1 FY2026 [9] - The company is in discussions for a S$5 billion bank loan to acquire ST Telemedia Global Data Centres, enhancing its digital infrastructure [10] - Analysts expect SingTel's average revenue per user to stabilize in Singapore, grow in India, and strengthen in Australia, leading to a potential re-rating of its forward EV/EBITDA ratio from 5x to 7x [11] Group 3: Sembcorp Industries Ltd - Sembcorp is acquiring Alinta Energy for S$4.8 billion, which is expected to be immediately accretive to earnings, increasing adjusted EBITDA by 36% and net profit by 14% [12] - The acquisition will raise Sembcorp's net debt by 74%, but the stock is currently trading at a trailing PE ratio of 10.6, significantly lower than the regional median of 24x [13][14] - Positive analyst coverage following the Alinta acquisition has led to an upgrade to 'outperform' with a target price of S$7.04, while management expects to maintain dividends [16]

Core Insights - Keppel DC REIT has demonstrated strong financial performance for the first nine months of 2025, with a Distribution Per Unit (DPU) of 7.670 Singapore cents and a distributable income of S$195.3 million [2][9] - The REIT's growth is attributed to recent acquisitions and contract renewals, with a notable 12.8% year-on-year increase in DPU for the first half of 2025 [3][9] - A successful preferential offering raised approximately S$404.5 million, indicating strong investor confidence and positioning the REIT for future growth [4][9] Financial Performance - For the nine months ended September 30, 2025, Keppel DC REIT reported a net property income of S$280.2 million [2][9] - The DPU for the first half of 2025 was 5.133 cents, reflecting a 12.8% increase year-on-year, while distributable income rose by 57.2% to S$127.1 million [3] Strategic Initiatives - The capital raised from the preferential offering will partially fund the acquisition of Tokyo Data Centre 3, enhancing the REIT's presence in Japan's data centre market [5] - Funds will also be allocated to repay existing debt, which is expected to improve the balance sheet and reduce financing costs [5] Financial Position - As of June 30, 2025, Keppel DC REIT maintained an aggregate leverage of 30.0% and an average cost of debt of 3.0% for the first half of 2025 [6] - The REIT's financial management strategies position it well to capitalize on acquisition opportunities in the hyperscale segment amid rising demand for digital infrastructure and AI [6]