Frasers Centrepoint Trust: Repeating its success
Frasers Centrepoint Trust’s (FCT) FY13 DPU came in at 10.93 S cents (+9.2%), spot on with our DPU projection.
We note that overall performance has remained robust, with portfolio occupancy maintained at a high 98.4%,
while positive rental reversion of 10.8% was achieved. We also understand ~2% of retail space at YewTee Point
is expected to start operating in Oct, which is likely to improve the mall’s occupancy. For Bedok Point,
management also updated that it has successfully secured an electronics retailer as its anchor tenant for
basement one. This may translate to a more stable performance at the mall. Looking forward, FCT reiterated CWP
and Northpoint will continue to perform, as leases at the malls amounting to 75.5% of FCT’s gross rent are due
for renewal and positive reversions are still expected. FCT also revealed that the strata title division of
One@Changi City is progressing well, and that the asset injection may take place in 2014. We are rolling our
valuation to FY14, while keeping our forecasts largely intact. Our fair value is in turn raised to S$2.02 from
S$1.96 previously. As upside now looks compelling, we upgrade FCT from Hold to BUY. (Kevin Tan)
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CapitaRetail China Trust: 3Q13 results in line
CRCT reported 3Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed
2.2% YoY to S$39.5m. Property expenses rose 7.8% YoY to S$14.5m, chiefly due to higher property management
fees and staff related costs. Net property income fell 0.8% YoY to S$25.0m. Total return for the period after
tax stayed roughly flat YoY at S$15.2m. 3Q13 distributable income grew 2.1% YoY to S$17.1m. DPU, however, fell
6.6% YoY to 2.26 S cents due to a private placement last November. Rental reversion for the multi-tenanted
malls, excluding CapitaMall Minzhongleyuan (which is undergoing AEI), is healthy at 10.0%. We maintain our BUY
rating on CRCT but place our fair value of S$1.58 under review. (Sarah Ong)
Yoma Strategic Holdings: To operate Volkswagen’s first service center in Yangon
Yoma reported that it will operate Volkswagen’s first service center in Yangon, Myanmar, which is expected to
begin operations in Oct 13. Yoma’s 70% owned subsidiary, German Car Industries Company (CGI) will enter into
a service partner agreement with Volkswagen Aktiengesellschaft (VW) to provide maintenance and repair services
and sell genuine vehicle parts to VW automobile owners. We understand that the automotive market in Myanmar is
currently dominated by Japanese cars and that VW currently has no manufacturing facilities or car show room in
Myanmar, and hence this agreement is expected to have limited financial impact for Yoma over the near term.
That said, we see this further strengthening the growth potential of the group’s automotive division which,
together with a similar service agreement with Mitsubishi earlier, is one that is steadily growing –
particularly so given that VW is a significant global player with a strong brand. We maintain a HOLD rating on
the counter with our fair value estimate of S$0.87 under review. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- US stocks gained on Tue, further propelling the S&P 500’s record rise, as the Sep non-farm-payrolls report
supported the notion that the Federal Reserve’s monthly bond purchases would continue into next year.
- Proposed changes in auditor reporting are expected to dramatically change the way external auditors reflect
their opinions on companies' financial statements.
- At least 8,700 shoebox units are expected to hit the resale market between now and 2017, as the Seller's
Stamp Duty lock-in period approaches expiry.
- Temasek Holdings has sold its entire direct stake in Keppel REIT in a share placement that started on Mon
evening, sources close to the deal said yesterday.
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