Friday, July 26, 2013

Frasers Commercial Trust: Rising to the top (DBSV)

Frasers Commercial Trust,
Buy S$1.34,  
Rising to the top
Price Target : 12-Month S$ 1.61 (Prev S$ 1.69)
•3Q13 results in line
•Operational outlook stable; expiry of lease at Alexandra Technopark in 2014 could lead to higher earnings
•BUY, revised TP of 1.61

Highlights
3Q13 DPU of 219 scts is in line. Frasers Commercial Trust (FCOT) reported a 16% and 13% y-o-y decline in gross revenue and NPI to S$30.0m and S$23.1m, respectively. The drop is largely due to the divestment of Keypoint and its Japanese properties, and a weaker AUD-SGD exchange rate. This was partially offset by contribution from the additional 50% stake in Caroline Chisholm Centre and Central Park. However, savings from lower interest expenses (all-in cost of 2.8%) and the repurchase of its CPPUs (funded by the proceeds from the sale of Keypoint), resulted in a 31.2% y-o-y uplift in distributions to S$14.4m, translating to a DPU of 2.19 Scts.



Our View
Operational outlook stable; rental reversions positive. Stripping out its divestments, 2Q13 net property income would have increased 3.7%, attributable to stable operations. Portfolio occupancies remain healthy at 98.1% (97.4% and 99.5% for its Singapore and Australian properties, respectively), with a long weighted average lease expiry of 4.6 years. Rental reversions in Singapore remain strong, ranging from 0.5% - 17.4%.

Expiry of Alexandra Technopark master lease in Aug 14 presents further upside. Contributing close to 21% of income, the Manager is actively renewing leases at Alexandra Technopark (ATP), mitigating any potential concentration risks for underlying sub-tenancies when the master lease at Alexandra Technopark expires in 2014. We estimate further earnings upside given the higher spread potential of up to cS$5m, given the positive spreads between underlying rentals vs master lease rent levels.

Recommendation
Attractive growth over next 2 years; BUY, TP S1.61. Offering one of the strongest DPU growth profiles, we believe FCOT continues to offer a compelling investment case for investors. Forward yields of 6.0%-7.1% are strong and above the commercial and the sector average. BUY with revised TP of S$1.61 after adjusting our risk free rate assumptions from 2.0% to 2.9%.



Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 25/07/13

No comments:

Post a Comment

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
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
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
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock