Friday, February 7, 2014

Starhill Global REIT - Risk on the rise (CIMB)

Starhill Global REIT
Current S$0.76
Target S$0.80
Risk on the rise

▊ SGREIT's FY13 results were in line, with DPU coming in at 99% of our full-year estimate. During the year, revenue grew by 7.9% yoy, while NPI grew by 6.3% yoy - mainly attributed to the stronger contributions from its Singapore and Australia properties. However, in the face of a rising interest rate environment coupled with currency fluctuations, we increase the risk-free rate for SGREIT to 4.0% and as a result, our DDM-based target price (discount rate: 8.4%) is lower at S$0.80. Our Hold rating is maintained.

 
Growth mitigated
4Q13’s revenue came in at S$49.1m (+3.6% yoy), while distributable income was reported at S$26.5m (+20.6% yoy). The strong showing is mainly attributed to the performance of its Singapore properties, as well as additional contribution from Plaza Arcade acquired in 1Q13. However, this was partially offset by lower contributions from the remaining overseas properties as a result of rising competition, higher expenses, and weak foreign currencies. With only 6.8% and 8.4% of leases (as % of total NLA) due to be renewed in FY14 and FY15, respectively, we expect the impact from further positive rental reversion of its retail space to be limited going forward.  
 
Strong balance sheet
With a strong balance sheet and an asset leverage ratio of 29.0% in 4Q13 (vs. 30.6% in the previous quarter), SGREIT is well-positioned for future accretive acquisitions or AEIs. In addition, with no debt due to be refinanced until 2015, coupled with the fixing of 94% of its debt under a fixed interest rate, SGREIT’s exposure to rate hikes is relatively well sheltered, in our view.  
 
Maintain Hold
Going forward, SGREIT continues to seek opportunities for potential AEI within its portfolio, particularly in Singapore and Australia. In addition, on the back of keen competition from an influx of large, newly-developed upcoming retail space, it would make sense, in our view, for SGREIT to divest its property in Chengdu, to focus on its four remaining countries for better returns. In the face of a rising interest rate environment coupled with currency fluctuations, we tune up our risk-free rate to 4.0% (from 3.4% previously) and consequently lower our DDM-based target price to S$0.80. Our Hold rating is maintained.  



Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 27/01/14

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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
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做自己熟悉的事,等到发现大好机会才投钱下去

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“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!
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