Tuesday, February 25, 2014

CapitaCommercial Trust - Turning green with envy (Daiwa)

CapitaCommercial Trust
Target (SGD): 1.650
17 Feb price (SGD): 1.395

Turning green with envy
• We believe CCT is one of the best proxies for the Singapore Office Sector and its potential for a spot-rent recovery in 2014
• CCT enjoys an attractive risk-reward ratio through its CapitaGreen exposure and industry-low gearing of 29%
• We upgrade to Buy (1) from Outperform (2) with a new DDM derived 6-month target price of SGD1.69 (previously SGD1.65)


■ What's new
The unit price performance for CapitaCommercial Trust (CCT) has been unremarkable in recent months, but this could change as management begins to lease its CapitaGreen development in an office market that appears to be strengthening.

■ What's the impact
Based on its existing office portfolio and its 40% ownership of the CapitaGreen office development, scheduled to open in 4Q14, CCT offers arguably the best proxy to the Singapore office sector and its potential rental recovery. How CCT management progresses on the leasing of CapitaGreen could be a better barometer of the office market recovery, in our opinion. Management said (in late January 2014) that it was in active discussions on 350,000 sq ft of space, about 50% of the entire building. As such, a better-than expected leasing outcome could be a positive unit-price catalyst. CapitaGreen is only 1 of 2 prime grade-A office buildings scheduled for completion in late 2014. The next major infusion of office space will not be until 2016.

CCT’s gearing of 29% (as at end- 2013), is the lowest among the office S-REITs, so it is the most defensive among its peers for its DPU sensitivity to rising borrowing costs and equity fundraising risk. In fact, CCT has a high upside risk (from to its exposure to CapitaGreen) and low downside risk (from its low gearing), so we believe it is highly attractive (among office S-REITs and even all S-REITs) on a riskreward basis.

We are making minor changes to our DPU forecasts following the 4Q13 results, and are raising our 6- month target price, pegged to our DDM valuation, to SGD1.69 from SGD1.65.

■ What we recommend
In view of CCT’s role as a proxy to the office sector and its favourable risk-reward ratio, we upgrade the unit to Buy (1) from Outperform (2). A risk to our rating would be an unforeseen downturn in the officerent market.



Source/Extract/Excerpts/来源/转贴/摘录: Daiwa-Research,
Publish date: 18/02/14

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