Wednesday, July 17, 2013

Fortune REIT: Solid 2Q13 (OCBC)

Fortune REIT:
Fair value HK$7.51
add: 12m dividend forecast HK$0.36
versus: Current price HK$7.15

Solid 2Q13
• DPU up 12% YoY
• Portfolio valuation up 10% since Dec
• Maintain BUY

FRT reported income available for distribution of HK$153.7m (+12.5% YoY), driven by a 10.7% YoY increase in revenue to HK$307.9m and a 11.6% YoY rise in net property income to HK$219.6m. DPU was the same as 1Q13 at 9.00 HK cents (+11.9% YoY). The results were in line with ours and the street's expectations. The portfolio valuation as of 30 June stood at HK$22.2B, up 9.8% from Dec 2012. The increase was mainly driven by improved asset performance, with cap rates of 4.3%-5.1%. The increase in asset valuation pushed the gearing ratio down to 20.9%. FRT is trading at a P/B of 0.71x (NAV of HK$10.01). We maintain our FV of HK$7.51 and BUY rating on FRT.


2Q13 NPI up 11.6% YoY
FRT reported income available for distribution of HK$153.7m (+12.5% YoY), driven by a 10.7% YoY increase in revenue to HK$307.9m and a 11.6% YoY rise in net property income to HK$219.6m. DPU was the same as 1Q13 at 9.00 HK cents (+11.9% YoY). The results were generally in line with ours and the street's expectations. Interest cost was 2.81% as at 30 June (versus 2.76% as at 31 March). We raise our FY13F interest cost assumption from 2.75% to 2.80%. 76% of FRT's interest cost is hedged at fixed rates.

Portfolio valuation at HK$22.2B
The portfolio valuation as of 30 June 2013 stood at HK$22.2B, up 9.8% from Dec 2012. The increase was mainly driven by improved asset performance, with cap rates of 4.3%-5.1%. The only asset which saw a cap rate change was Jubilee Square, which had a slight cap rate compression. Coupled with its monthly rental increasing by 34% following AEI, the valuation for the asset rose 37% from December to HK$756m at June. The increase in portfolio valuation pushed FRT's gearing ratio down to 20.9%. FRT is trading at a P/B of 0.71x (NAV of HK$10.01).

Strong operational performance
Good rental reversion of 18.2% was registered for 1H13 renewals. Average passing rent was HK$33.1 psf, up 7.0% YoY. Portfolio occupancy remained healthy at 97.8%, weighed down partially by AEIs in Fortune City One's wet market (HK$18m; 2Q13 start) and at Smartland. The AEI at the wet market and another small AEI at Ma On Shan Plaza (HK$17m; 3Q13 start, probably in August) should be completed by end 2013. The next large scale project is Phase 3 AEI for Belvedere Square (HK$80m; 4Q13-end 2014).

Maintain FV of S$7.51
We maintain our FV of HK$7.51 and BUY rating on FRT.



Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 15/07/13

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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

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“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!
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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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