CIMB | UOB KAYHIAN |
Mapletree Greater China Commercial Trust More challenges ahead
■ MAGIC’s 2Q/1HFY18 DPU of 1.868 Scts/3.714 Scts was in line with our expectations and consensus. ■ The results were underpinned by robust performance at FW. ■ We expect a more challenging operating environment at GW while SP is upbeat. ■ We find MAGIC’s balance sheet healthy with gearing of 38.5% at end-2QFY3/18. ■ We downgrade MAGIC from Add to Hold as its near-term performance could be limited. Our TP edges up to S$1.20 on stronger HK retail prospects in the longer term
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Expect Strong Production In 4Q17
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OCBC | |
First REIT: Relative value emerges
First REIT’s (FREIT) 3Q17 results were in-line with our expectations. Gross revenue and NPI grew 3.3% YoY and 3.2% YoY to S$27.8m and S$27.5m, respectively. DPU rose 0.9% YoY to 2.14 S-cents, forming 25.2% of our full-year projection. FREIT has since completed the acquisition of Siloam Hospitals Buton and Lippo Plaza Buton, which should be DPU-accretive from 4Q17 onwards, while also looking to conduct a joint acquisition of an integrated development in Yogyakarta. Positive base rental revisions should also be achievable, with the latest reported inflation for Jan-Sep 2017 coming in at a 0.6% YoY increase. Over a 5-year period, PLREIT typically trades at a P/B premium of 14.6% over FREIT, and this has now grown to 19.8%. We believe FREIT is comparatively undervalued and increase our fair value from S$1.38 to S$1.44. Upgrade to BUY.
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RHB | |
CapitaLand Mall Trust No Bright Spots Here Yet
CMT’s 3Q results were in line. The retail market continues to remain soft, with rent reversions for 3Q accelerating to -2.1% (2Q17: -0.3%). Shopper traffic and tenant sales at its malls stood flat YoY despite the retail sales index showing some pick-up in recent months. On the positive front, management has been active in rejuvenating CMT’s assets and repositioning its malls to combat e-commerce threats. Looking ahead, we expect rent growth to be flat to slightly negative, as retail supply remains high amid changing consumer demand. Thus, its current FY18F valuation of 1.1x P/BV and yield of 5.5% is fair, in our view. Maintain NEUTRAL and SGD2.08 TP (2% upside)
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