Wednesday, November 6, 2013

Mapletree Greater China Commercial Trust : Strong organic expansion (DBSV)

Mapletree Greater China Commercial Trust
HOLD S$0.93
STI : 3,201.20
(Downgrade from BUY)
Price Target : 12-Month S$ 0.97 (Prev S$ 1.00)
Strong organic expansion

• Earnings lifted by strong positive rental reversions
• Forward earnings growth underpinned by continued positive reversions, stable cashflow from a well patronized and a niche portfolio
• Downgrade to HOLD, TP $0.97


Highlights
Strong organic growth. MAGIC reported gross revenue of $63.1m for 2QFY14 which is 9.5% ahead of prospectus forecast. NPI and distributable income came in 10% and 13.2% higher than projected to $50.6m and $38.8m respectively. 2Q DPU was 1.455cts. Together with the distributions achieved for the period 7 Mar to 30 June, the trust will distribute a total DPU of 3.183cts, to be paid on 29 Nov 2013.

Positive rental reversion at both properties. The better performance was achieved on higher portfolio occupancy of 99% (vs 98.3% in previous quarter) with Festival Walk (FW) being 100% taken up and Gateway Plaza (GP) at 98.3% leased. Rents achieved were 22% higher than previous corresponding levels at FW and 81% better at GP. FW continues to enjoy consistently robust shopper footfall growth of 5.2% yoy and sales turnover growth of 6.1%.

Our View
Strong and stable cashflow. With only a remaining 11% of leases due to be renewed at FW for the remainder of FY14 and another 4% at GP, the trust should continue to be underpinned by strong cashflow from FW while consolidation activities and expansion demand should continue to generate demand for niche office markets such as at GP. Transacted rents at GP remain at between RMB320-350psm/mth. The Manager is also in talks to renew its lease with anchor tenant BMW a year ahead of expiry at end 2014 and any conformation towards this end would extend the strong income visibility profile of the trust.

Lower gearing. With the repayment of HK$695m of term loan facility using operating cash, gearing dipped to 40.1%. Interest cost remains unchanged at 2%. Average loan maturity is 3.5 years and 71% of interest costs are hedged.

Recommendation
Downgrade to HOLD. We continue to like MAGIC for its quality assets and stable cashflow. With the latest organic income growth, we estimate that FW is trading at an annualized implied NPI yield of 4.8% while GP is trading at an NPI yield of c5.9%. This represents an attractive 280 and 170bps spread over the respective country risk free rate. However, with our economist’s latest revision in the 10-year bond rate projections for HK and China, which lifted the blended average risk free rate assumptions for the trust by 30bps, our DCFbacked TP is lowered to $0.97, translating to only a total return of 10%. Hence, we lower our call to HOLD on valuation grounds.




Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 04/11/13

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