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Thursday, July 25, 2013

Local Brokerages Stock Call 22 July 2013

From OCBC:
CapitaMall Trust: Another promising quarter
CapitaMall Trust (CMT) reported DPU of 2.53 S cents, up 6.3% YoY. Together with 1Q DPU of 2.46 S cents, 1H13 DPU totaled 4.99 S cents (+6.6%), forming 50.9% of FY13F DPU. This is above our expectations given that a total of S$12.3m or c.0.36 S cents retained over 1H is available for distribution in 2H13. As at 30 Jun, CMT’s portfolio occupancy stood at 99.1%, up 0.9ppt QoQ, while positive rental reversion of 6.4% achieved in 1H was slightly higher than 1Q’s growth of 6.2%. CMT’s financial position also improved during the quarter, with gearing ratio down to 34.9% from 35.2% in 1Q. On 2 Jul, CMT redeemed all its outstanding convertible bonds due 2013, thereby fully addressing its refinancing needs for 2013. All 14 properties held directly by CMT, we note, are also unencumbered as a result. We now update our model to incorporate the better results and higher risk free rate assumptions. Consequently, our fair value eases from S$2.43 to S$2.35. However, given the strong upside potential, we maintain BUY on CMT.

Mapletree Logistics Trust: Strength despite uncertain backdrop
Mapletree Logistics Trust (MLT) reported 1QFY14 DPU of 1.80 S cents, up 5.9% YoY. Stripping out divestment gain from 30 Woodlands Loop, DPU would be up 4.7%. The results were in line with expectations, as 1Q DPU have met 24.8%/25.4% of our/consensus full-year DPU projections. Overall occupancy stood at 98.2%, largely stable from 98.5% seen in previous quarter. In addition, positive rental reversion of 17% was achieved. This is higher than prior quarter’s growth of 14%, although MLT maintains its view that the rate is set to moderate going forward. MLT also updated that its redevelopment project at 21 Benoi Sector in Singapore is on track for completion in 3QFY14, and that the property is currently 94% pre-leased. In the coming quarter, The Box Centre in Korea (acquired in Jul at NPI yield of 8.4%) will start contributing to MLT’s topline. We are keeping our forecasts intact for now as the results were within expectations. Maintain HOLD with an unchanged fair value of S$1.15 on MLT.

Suntec REIT: Recovery possibly in sight
Suntec REIT’s 2Q13 DPU was up 0.9% QoQ (-4.7% YoY) to 2.249 S cents, helped by a S$7.8m capital distribution from Chijmes sale proceeds. For 1H13, DPU amounted to 4.477 S cents, down 7.0% YoY and 4.3% HoH, and formed 48.1% of our full-year DPU forecasts. This is broadly in line with our expectations, as Suntec REIT’s financial performance is likely to improve going forward now that the Phase 1 space has become operational in Jun. For the first time, Suntec REIT shared that SCM Phase 1 has achieved a passing rent of S$13.09 psf pm. This, we note, is higher than the rates of S$11.31 secured at the rest of SCM and S$12.59 projected for the AEI project. Committed occupancy at SCM Phase 1 now stands at 99.6%, while pre-commitment at Phase 2 has risen from 53.0% in 1Q to 70.1%. We tweak our model to incorporate the results and higher market risk free rates. While our fair value drops to S$1.85 from S$2.16, we view that current valuations are compelling. Maintain BUY on Suntec REIT.

Raffles Medical Group: 2Q13 results in-line with expectations
Raffles Medical Group (RMG) reported its 2Q13 results this morning which were within our expectations. Revenue rose 12.9% YoY and 7.1% QoQ to S$86.8m. PATMI was up 15.9% YoY and 6.8% QoQ to S$14.4m. Growth during the quarter was driven by higher patient acuity and an increased depth and breadth of medical services on offer. Both RMG’s core divisions contributed to its topline increase, with its Hospital Services and Healthcare Services segments growing 16.8% and 6.5% YoY, respectively. For 1H13, revenue increased 12.1% YoY to S$167.9m, forming 48.3% of our full-year estimates; while PATMI jumped 16.0% to S$27.9m, or 45.9% of our FY13 forecast. This is unsurprising, as 2H is seasonally a much stronger half for RMG, and we expect this trend to be maintained this year. An interim dividend of 1 S cent/share was declared (payable on 29 Aug 2013), similar to 2Q12 and our forecast. We will provide more details after the analyst briefing. We maintain our BUY rating and S$3.42 fair value estimate (29x blended FY13/14F).

From UOB KH:
CapitaMall Trust (CT SP)  

2Q13: Awaiting Catalysts
Results in line as AEIs contributed to revenue growth. Positive leasing
momentum with Westgate 70% pre-leased ahead of end-13 opening.
Awaiting catalysts for acquisitions and further AEIs in 2013. Maintain HOLD
with a target price of S$2.14 based on DDM (RR: 6.8%, terminal: 1.8%).
Entry price is S$1.86. 
Suntec REIT (SUN SP)  
2Q13: Look Ahead As The Worst Is Over
Results in line as Suntec applies minimal S$8m Chijmes divestment
proceeds to mitigate income fall from Suntec City AEI. Look ahead as the
worst is over with Phase 1 of the AEI (99.6% committed) progressively
opening from June with passing rents of S$13.09 (5% above expectations).
Solid pre-leasings for Phase 2 with 70% committed five months before
completion. Maintain BUY with target price of S$1.95.

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