Thursday, December 26, 2013

Keppel REIT -REIT That Offers Grade-A Offices At a Bargain (DMG)

Keppel REIT
Target Price: SGD1.66
Price: SGD1.16
REIT That Offers Grade-A Offices At a Bargain

KREIT’s latest Australian acquisition (Melbourne) reinforces management’s progressiveness in extending its portfolio’s revenue tenure with fixed annual rental escalation and high portfolio occupancy. Besides its Grade-A offices, we see the lengthening of its portfolio’s WALE further mitigating the specific risks associated with commercial landlords. Maintain BUY, on the stock’s high 7.4% DPU yield.

¨ Strong income stream. With a weighted average lease to expiry (WALE) of 6.4 years and long-term leases (>five years) accounting for 40% of its portfolio, coupled with a revenue hedge for its Australian exposure, KREIT’s earnings downside risks appear limited.


¨ Boosting stock liquidity and acquisition currency. The restructuring of Keppel group’s holdings and the subsequent reduction in its stake in KREIT has helped to boost the latter’s liquidity, with its estimated free float now at 55.3% (vs below 25% during its initial years). This not only
opens the door to greater investor participation but also provides the company with greater capital flexibility to make potential acquisitions.

¨ Recent share price plunge an overreaction. Amidst the volatility in the capital markets since May – whereby the STI index has lost 10% while the FSSTREIT index has slumped 21% – KREIT’s unit price has fallen by 28%. Assuming a 100bps increase in interest cost, this will reduce its  prospective distribution per unit (DPU) by less than 4%, which implies that the market is pricing in an over 90% decline in KREIT’s forward rental cycle. We hold the view that this, coupled with a 25% correction in the AUD, amounts to an overreaction. Hence, we see an excellent opportunity to accumulate a great value REIT with substantial upside.

¨ SGD1.66 TP provides 35% upside potential. KREIT is currently trading at a compelling 7.4% FY14F yield and a substantial 15% discount to the peer average of 6.2%, despite having only premium Grade-A office assets in Singapore’s central business district (CBD). Maintain BUY on the stock with a SGD1.66 TP, which provides a potential upside of 43%.




Source/Extract/Excerpts/来源/转贴/摘录: DMG-Research,
Publish date: 23/12/13

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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
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
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