To The Moon

‌Technical Analysis (TA)

Looking at the multi-year weekly chart provided up to late May 2026:

$Stoneweg EUTrust EUR(SET.SI)$ $Stoneweg EUTrust SGD(SEB.SI)$

• The Big Picture (Base Building): After a severe macro-driven downtrend from 2021 through late 2023, the stock found a cyclical bottom near €1.20. Since 2024, the chart has transitioned out of its downtrend into a healthy, extended accumulation base ranging between €1.40 and €1.75.

• Current Price Action: The stock is trading at €1.520, tightly hovering around its 20-week and 50-week Moving Averages (the pink and blue lines), while the 200-week Moving Average (green line) has flattened out at €1.567. This indicates a compression phase where volatility is drying up before a major breakout attempt.

• Key Levels to Watch: Immediate Support (€1.461): A well-tested horizontal floor that has held multiple times throughout 2025 and early 2026. Immediate Resistance (€1.638): The local peak. A convincing weekly close above this level clears the path toward the major psychological barrier at €1.75. Macro Target (€2.134): The historical broken support line, which will serve as a major long-term upside target once the €1.75 range is cleared.

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Fundamental Analysis (FA)‌‌‌

Stoneweg EU Trust has successfully completed its painful capital restructure and pivot phase, emerging as a structurally stronger, high-yielding stapled trust.

• Deep Valuation Discount: The stock is currently trading at a compelling ~25% discount to its Net Asset Value (NAV) of €1.99. This provides a massive margin of safety for value investors, with major banks maintaining buy targets around €1.88–€1.90.

• Attractive, Stabilized Yield: Trading at €1.52, the trust offers a forward dividend yield of roughly 8.6% to 8.7%. Following management's successful portfolio reset, distribution per unit (DPU) has stabilized, making this yield highly reliable compared to previous volatile years.

• Portfolio Re-positioning: The trust has aggressively recycled capital out of non-core European offices and into high-growth segments. Its mix currently stands at 61% logistics, light industrial, and data centers, with a clear strategic roadmap to hit 70% by 2027.

• Solid Balance Sheet: Gearing sits at a manageable 42.7% (with plans to naturally deleverage below 40% via further office sales). Crucially, 87% of its debt is hedged or fixed until late 2027, keeping its current cost of debt well-controlled at 3.84%.

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Tailwinds & Headwinds‌‌‌

🚀 Tailwinds (The Upside Drivers)‌‌‌

• Built-in Inflation Protection: Nearly 100% of SERT’s leases feature CPI-linked rental indexation. This allows the trust to capture organic rental growth automatically, resulting in a positive +3.9% overall rent reversion in 1Q 2026.

• Data Center Growth Optionality: The trust’s recent €50 million development investment into AiOnX data centers provides a dual benefit: a fixed 7.25% annual cash coupon plus meaningful future NAV upside as construction milestones clear.

• Aggressive Share Buybacks: Management is actively supporting the stock price, having repurchased over 2.1 million securities year-to-date in 2026, which helps boost DPU.

• Excellent Cost Pass-Through: The trust is highly insulated from volatile utility costs, successfully passing 98.4% of energy hikes directly onto its tenants.

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⚠️ Headwinds (The Risks to Watch)‌‌‌

• Bifurcated Property Market: While logistics demand is roaring (+7.6% rent reversion), the trust's remaining 41% exposure to European offices remains a drag, experiencing slightly negative rent reversions (-2.8%) as management prioritizes keeping occupancies stable over higher rents.

• Tight Interest Coverage: Net interest cover stands at 2.6x. While its debt is comfortably hedged until late 2027, if Eurozone interest rates stay "higher for longer" past 2027, refinancing down the road could pressure future earnings.

• Subdued Eurozone Growth: The underlying European macro economy remains sluggish, with modest GDP growth projections hovering around 1.1% for 2026, meaning organic growth relies heavily on structural shifts (like e-commerce and near-shoring) rather than broader economic expansion.

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The Verdict‌‌‌

Stoneweg EU Trust is technically coiled in a multi-year accumulation floor, while fundamentally trading at an unwarranted 25% discount to its assets. For income investors, the 8.6% yield is backed by strong logistics fundamentals and CPI-pegged rents, making the risk/reward profile heavily tilted to the upside.

Kenny Loh is a distinguished MAS Private Wealth Advisor (RNF: LKK300389588) representing Financial Alliance with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

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