Friday, February 7, 2014

Suntec REIT: Starting to shine brightly (OCBC)

Suntec REIT:
Fair value S$1.90
add: 12m dividend forecast S$0.101
versus: Current price S$1.59
Starting to shine brightly

Suntec REIT’s 4Q13 results exceeded both market and our expectations. Going forward, we understand that management will continue to focus on forward renewal of its office leases. With only 12.5% of its office leases due to expire in 2014, we believe the office segment will remain robust. Suntec REIT also updated that Phase 2 AEI is on track for completion in 1Q14, and that pre-commitment for the retail space has reached 97.0%, up from 83.7% in 3Q.
While bottomline may experience a dip in 1Q as Phase 3 tenants vacate for the last phase of AEI, we continue to be overall positive on its longer-term potential, arising from 1) strong rental uplift at Suntec City, 2) earnings accretion from 177-199 Pacific Highway acquisition and 3) potential interest savings post refinancing of its S$773.5m club loan due in 2014. We maintain BUY with unchanged fair value of S$1.90 on Suntec REIT.

Significant recovery post Phase 1 AEI
Suntec REIT’s 4Q13 results exceeded both market and our expectations. NPI came in at S$49.8m, representing a 62.9% jump YoY, due to the opening of Phase 1 retail space of Suntec City Mall (SCM) and Suntec Singapore post AEI. Distributable income from operations also saw a 3.4% increase YoY to S$54.2m. Amid the recovery in performance, management utilized a smaller amount of S$4.0m from CHIJMES sale proceeds for capital distribution (3Q13: S$4.5m, FY13: S$19.0m). Nevertheless, this helped to boost the quarterly DPU up by 10.1% YoY to 2.562 S cents. As such, FY13 DPU amounted to 9.328 S cents, just a tad lower than FY12 DPU of 9.49 S cents but ahead of both ours and consensus forecast of 9.1 S cents.

Continued improvement in operational metrics
Contribution from the retail segment continued to climb, reaching 39% of gross revenue in 4Q13 versus 34% seen a quarter ago. However, the retail revenue was still 10.2% lower YoY due to the ongoing AEI of Phase 2 SCM. Suntec Singapore, we note, contributed S$18.2m from just S$0.5m in 4Q12. In addition, office segment registered a sustained growth of 3.8% YoY due to positive rental reversions, consistent with our positive view on the office market. Notably, rental rate for leases secured at Suntec City Office again improved QoQ at S$8.65 psf pm (3Q: S$8.55). Going forward, we understand that management will continue to focus on forward renewal of its office leases. With only 12.5% of its office leases due to expire in 2014, we thus believe the office segment will remain robust.

Maintain BUY
Suntec REIT also updated that Phase 2 AEI is on track for completion in 1Q14, and that pre-commitment for the retail space has reached 97.0%, up from 83.7% in 3Q. While bottomline may experience a dip in 1Q as Phase 3 tenants vacate for the last phase of AEI, we continue to be overall positive on its longer-term potential, arising from 1) strong rental uplift at Suntec City, 2) earnings accretion from 177-199 Pacific Highway acquisition and 3) potential interest savings post refinancing of its S$773.5m club loan due in 2014. We maintain BUY with unchanged fair value of S$1.90 on Suntec REIT.


Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 24/01/14

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