Thursday, October 3, 2013

Frasers Commercial Trust : Minimal dilution impact from CPPU conversion (CIMB)

Frasers Commercial Trust
Current S$1.25
Target S$1.45
Minimal dilution impact from CPPU conversion

Frasers Commercial Trust (FCOT) recently announced that 9.37m new ordinary units have been issued following the conversion of 11.1m Series A CPPUs. The conversion enlarges FCOT’s share base by c. 1.4%, which will result in marginal dilution for existing shareholders.

As such, we lowered our FY13-15 DPU estimates by around 1.4% to account for the slightly larger share base. We maintain our Outperform rating and see catalysts from the additional hotel GFA at China Square Central, while lowering our target price to S$1.45 to reflect the slight dilution.


What Happened
FCOT recently announced the issuance of 9.37m new ordinary units following the conversion of 11.1m Series A Convertible Perpetual Preferred Units (CPPUs) at a conversion price of S$1.1845/unit.

What We Think
This conversion exercise of CPPUs into ordinary units was largely within expectations as the stock continues to trade above the conversion price of S$1.1845/unit, while the gearing remains at c.39%. FCOT has been redeeming its CPPUs since Dec 12, costing the trust an average yield of 5.5% annually. Together, the two redemption exercises (Dec 12 and Apr 13) took 95.8% of CPPUs off the market, leaving only 14.3m units.

With the latest conversion exercise, only 1.055m of CPPUs – translating to c.890k ordinary shares - are left on the books. We see limited pressure on the stock if these CPPUs are converted into ordinary units.

What You Should Do
We continue to favour FCOT for the additional hotel GFA planning permission at China Square Central. While management continues to evaluate the potential of the 16,000sq m hotel site, we believe this will provide the next boost to FCOT’s books (c.10-15% to book value) as we expect the hotel to be valued at S$300m-S$350m upon completion. We maintain our Outperform rating and target price of S$1.47, which implies a 6% FY14 dividend yield - largely in line with the office REITs’ average yield of 6.2%.



Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 01/10/13

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)
“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