OCBC Report 23 Apr 14

KEY IDEA

Frasers Centrepoint Trust: Performance to get better
Frasers Centrepoint Trust (FCT) reported 2QFY14 DPU of 2.88 S cents, up 6.7% YoY. This is largely within our view, given that first-half DPU of 5.38 S cents met 47.8% of our FY14F DPU. We note that portfolio occupancy has maintained steady at 96.8% (1Q: 96.7%), while rental reversions stayed robust at 9.3% (1Q: +2.5%) for the leases renewed during the quarter. Looking ahead, FCT reiterated that Causeway Point and Northpoint are expected to underpin growth within its existing portfolio, as both malls contribute to the bulk of the lease renewals in FY14-15. As announced on 8 Apr, FCT has proposed to acquire Changi City Point for S$305.0m. We view this addition as timely, as it will provide another boost to DPU in an otherwise moderating growth portfolio. Maintain BUY with unchanged S$2.02 fair value on FCT. (Kevin Tan)


MORE REPORTS


Mapletree Logistics Trust: Closing FY14 on positive note
Mapletree Logistics Trust (MLT) reported 4QFY14 DPU of 1.89 S cents, up 9.2% YoY. This is in line with both our and consensus expectations. Operationally, MLT has been exhibiting resilience, as evidenced by its stable portfolio occupancy and healthy rental reversion achieved during the year. Going forward, management expects the demand for logistics facilities in its markets to remain robust, while rental reversion to stay positive. MLT also said that it will focus on driving organic and inorganic growth. We believe MLT may carry out capital recycling to partially fund the potential investments, given that it has identified a few lower yielding assets for divestment. We lift our fair value from S$1.06 to S$1.10 as we roll our valuation to FY15. However, as the stock appears fairly priced, we maintain our HOLD rating. (Kevin Tan)

CapitaMall Trust: 1Q14 results within view
CapitaMall Trust (CMT) released its 1Q14 results this morning. NPI grew 5.3% YoY to S$114.3m, while distributable income increased 4.5% to S$89.1m. DPU for the quarter came in at 2.57 S cents, 4.5% higher than that achieved in 1Q13. This met 23.4% of both ours and consensus full-year DPU projections. The better performance was driven mainly by higher occupancy at Plaza Singapura and Atrium@Orchard, and completion of Phase 1 asset enhancement initiative (AEI) at IMM Building. Looking ahead, CMT will continue to focus on executing its AEIs at Bugis Junction and Tampines Mall. In addition, it will also embark on Phase 2 AEI at IMM Building and reconfigure Level 2 of JCube to enhance the shoppers’ experience. We are maintaining our BUYrating on CMT, but now place our S$2.20 fair value under review as we incorporate the results into our valuation. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES

- The US stock market closed higher Tue, with the S&P 500 extending its winning streak to six days, the longest streak of gains since Sep 2013.

- Singapore private home purchases fell across the board in 1Q14 to just over 2,000 units - the first time in more than five years that the number has dropped below 3,000 homes.

- AsiaPhos has entered into a raft of agreements to take over the full economic benefits of its existing mines, as well as expand its exploration area in Sichuan, China.

- Mapletree Industrial Trust yesterday posted DPU of 2.51 S cents for its 4QFY14, a 5.9% increase from 2.37 S cents a year ago.

- SATS handled 6.7% more flights YoY in 4QFY14, while unit services rose 3.2% and cargo throughput, by 4.4%.

- Suspended China Sky Chemical Fibre Co could see the clouds clear soon, after its shareholders passed resolutions to receive and adopt directors' reports and audited accounts for the past three financial years at its AGM yesterday.

- A loss-making subsidiary of CCM Group that is being disposed of has received a notice of termination on a condominium in Balestier it was constructing.