Tuesday, July 30, 2013

CACHE: A Highly Defensive REIT (OSK)

CACHE: Initiation - A Highly Defensive REIT
(BUY, SGD1.24, TP: SGD1.42)
We initiate coverage on Cache with a BUY rating. Based on our DDM model, and assuming a terminal growth rate of 2.0% and a COE of 9.1% (with a risk-free rate of 2.5%, 0.8x beta and 7.0% equity risk premium), we arrive at our TP of SGD1.42. Given the commitment from its sponsor and the high occupancy rate within its portfolio, we believe Cache to be one of Singapore’s most defensive industrial REITs.


Full occupancy with minimal renewal risk. With its properties rented out under a master lessee (except APC Distrihub, which has two key tenants), Cache is able to enjoy a stable 100% occupancy rate with a long-term weighted average lease to expiry (WALE) profile of 3.7 years. Coupled with a low portfolio lease expiry profile of 0% and 6% for FY13F and FY14F respectively (despite some 27.4m sq ft and 20.1m sq ft in industrial space coming online in 2013 and 2014 respectively), we expect the REIT to be able to deliver stable yet sustainable income to investors over the next few years.

Additional income from new acquisitions. Cache reported a 2QFY13 dividend per unit (DPU) of 2.15S¢ (+8.4% y-o-y). Revenue for this period grew to SGD20.4m (+16.5% y-o-y) while net property income (NPI) rose by 17.0% y-o-y, mainly attributed to additional contribution from a full quarter’s rental income from the REIT’s Pandan Logistics Hub (acquired in July 2012) and the recent acquisition of Precise Two in April. In the subsequent quarters, we expect to see decent growth from Cache as the latter property will continue to contribute to its earnings growth.

Initiate coverage with a BUY and a TP of SGD1.42. We believe Cache will be able to achieve stable and long-term growth, thereby benefiting its unitholders, given: i) the high occupancy rate and the superior profile of its assets, ii) strong support from its sponsor, and iii) no debts due for renewal until 2015 and 70% of total debt tied to a fixed rate. Currently trading at 6.8% and 7.2% of FY13F and FY14F dividend yields respectively, Cache is one of Singapore’s highest yielding REITs. We initiate coverage on the REIT with a BUY and a DDM-based (COE: 9.1%, terminal growth: 2.0%) TP of SGD1.42


Source/Extract/Excerpts/来源/转贴/摘录: OSKResearch,
Publish date: 26/07/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
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做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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