Thursday, February 13, 2014

Perennial China Retail Trust -2014 - eyes on operational assets (CIMB)

Perennial China Retail Trust
Current S$0.53
Target S$0.57
2014 - eyes on operational assets

DPU came in a shade below our forecast, at 23% for 4Q and 92% for FY13 due to higher operating expenses. Existing earn-out continues to support distributions but is set to expire in 2014. We, therefore, see 2014 as an important year, during which its operational assets will the focus. Our FY14-15 DPUs drop by 6-10% as we factor in project delays. We maintain our Hold rating and RNAV-based target price. Health of its underlying operations can be a re-rating or de-rating catalyst.


The Positives
FY13 core earnings from JVs increased 6.5% yoy due to improving Shenyang assets as committed occupancy rose for both Longemont Shopping Mall (LSM) and Red Star Macalline Furniture Mall (RSMF). All assets other than RSMF were revalued upwards, resulting in a 1.6% valuation gain for the overall portfolio. Jihua Mall, which opened in Aug 2013, has achieved strong committed occupancy of about 95%.

The Negatives
Core earnings remained weak and missed our forecast due to higher-than-expected pre-operational expenses for Jihua and Qingyang mall. Committed occupancy remained low for Longemont Office at 46%. The expected commencement dates for Dongzhan and Qingyang Mall in Chengdu have been pushed back to 1Q15 and Apr 2014, respectively (vs. 4Q13-1Q14 and 3Q14 announced in 4Q12) as bad weather hampered construction. On the balance sheet front, we see incremental risks from increased borrowing to make progressive payments and a relatively low debt service ratio of 1.94.

2014
With the earn-out set to expire by end-2014, we see this year as an important one where its operational assets will be put to the test. While committed occupancy for its newer malls such as Qingyang and Jihua is healthy at 85-93%, we believe that earnings will be reduced by higher marketing expenses and rent-free periods for their first year. The LSM will be a good litmus test for PCRT’s management capabilities given that it is the longest operating mall in the portfolio and 48% of its leases (by gross rental income) expire in 2014. We will be looking at its retention rate and rental reversion as key indicators.


Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 10/02/14

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