* Manulife Reit – O-PF (The roadmap to ESG)
In a short span since its 2016 listing, Manulife US Reit’s ESG journey has been impressive, with close to 90% of its portfolio now green-certified. It is also making efforts to increase its financing with green loans. Collectively, these initiatives will increase demand for its office space and lower financing cost, positioning MUST ahead of peers in an increasingly ESG-focused environment. In the near term, acquisition remains a key focus for MUST. We reiterate O-PF with PT of US$0.77.
* Meituan – BUY (Antitrust investigation is concluded)
Meituan was fined Rmb3.44bn by SAMR for abusing its market power to preclude competition with ‘Pick one from two.’ The fine is set at 3% of its 2020 domestic revenue, but is half of the US$1bn reported by WSJ and concludes the five-month investigation. The tighter regulatory environment will unlikely affect Meituan’s leadership given the high entry barriers in food delivery. The company has changed its commission structure to support SMEs, offset by higher charges for long-distance delivery. It expects 35% of its riders to be entitled to social security benefits and says the additional costs are manageable. Meituan’s 3Q21 results will be impacted by Covid, but its growth prospects remains promising. Retain BUY.