Thursday, October 24, 2013

Frasers Commercial Trust : Becoming stronger (CIMB)

Frasers Commercial Trust
Current S$1.28
Target S$1.45
Becoming stronger

 FCOT announced stellar FY9/13 results with DPU growth of 19%. As some of its leases are at below-market rates and the outlook for the office market is positive, we believe that FCOT will continue to grow organically.

4Q results are in line, with 4Q DPU at 26% of our full-year forecast and FY13 DPU at 99% of our forecast. We trim our FY14 DPU by 3% to reflect slightly slower growth while nudging FY15 up by 1%. We maintain our Outperform rating and DDM-based (discount rate: 8.4%) target price of S$1.45. The expected catalysts are organic positive rental reversion and full-year cost savings resulting from the redemption of CPPUs.

Stable quarter
4QFY13 DPU rose 18.8% yoy to 2.08 S¢. The respectable results were mainly attributed to the higher income from the additional 50% interest in Caroline Chisholm Centre, higher rental rates, lower interest costs and most importantly, the redemption and conversion of 330.3m Series A convertible perpetual preferred units (CPPU) in FY13. Qoq, higher occupancy and rental rates achieved during the quarter were offset by the weaker Australian dollar. As a result, both NPI and DPU fell by 4.7% this quarter.

Organic growth expected
Management expects the REIT to grow organically given the 11-20% rental reversions for most of the recently signed leases. However, this growth might be limited as only 8.5% of total leases are due to expire in FY14. The main growth is expected to come when Alexandra Technopark’s masterlease expires in August 2014. Currently, the rental rates renewed/signed in this property range between S$3.5 and S$4.0 – double the rental rate the master lease is paying FCOT.

Maintain Outperform
With a positive outlook in the office market and a possible expansion of FCOT’s books as a result of the 16,000 sq m hotel site at China Square Central, we continue to favour this stock. We maintain our Outperform rating and S$1.45 target price.

Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date:24/10/13

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)

乔治·索罗斯(George Soros)



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,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock