CapitaRetail China Trust (CRCT) reported 3Q12 DPU of 2.42 S cents, up 14.2% YoY, and in-line with our expectations. YTD 2012 DPU of 7.24 S cents formed 76% of our original 2012 DPU estimate of 9.5 S cents. We raise our estimates up slightly, increasing our FY12 DPU estimate to 9.7 S cents. 3Q12 gross revenue increased by 8.5% YoY to RMB194.2m, underpinned by tenants’ sales growth of 15.6% at its six multi-tenanted malls. Net property income increased by 10.3% YoY to RMB126.5m. Excluding Minzhongleyuan, which is undergoing asset enhancement, NPI grew 12.7% YoY. Strong NPI was posted for Xizhimen, Qibao, Saihan and Wuhu, with growth at 18.5%, 57.2%, 35.5% and 30.4% YoY respectively. Rental reversion across CRCT’s portfolio was good at +18.2%. We raise our fair value slightly from S$1.70 to S$1.71 and maintain our BUY rating on CRCT. We believe that the FY12F dividend yield of 6.0% is attractive.
Raising estimates up slightly
CapitaRetail China Trust (CRCT) reported 3Q12 DPU of 2.42 S cents, up 14.2% YoY, and in-line with our expectations. YTD 2012 DPU of 7.24 S cents formed 76% of our original 2012 DPU estimate of 9.5 S cents. We raise our estimates up slightly, increasing our FY12 DPU estimate to 9.7 S cents. 3Q12 gross revenue increased by 8.5% YoY to RMB194.2m, underpinned by tenants’ sales growth of 15.6% YoY at its six multi-tenanted malls. On a QoQ basis, tenants’ sales grew by 6.1%. Shopper traffic increased by 21.5% YoY and 8.0% QoQ. Higher revenue was registered across the portfolio except for Minzhongleyuan, which is undergoing asset enhancement. Net property income increased by 10.3% YoY to RMB126.5m. Excluding Minzhongleyuan, NPI grew 12.7% YoY. Strong NPI was posted for Xizhimen, Qibao, Saihan and Wuhu, with YoY growth of 18.5%, 57.2%, 35.5% and 30.4% respectively. Rental reversion across CRCT’s portfolio was good at +18.2%. As of 30 Sep, the weighted lease to expiry by gross rent was 5.3 years.
Good returns from completed AEI
CRCT gave an update on the completed AEI at Minzhongleyuan. Reconfigured space recovered from a Pizza Hut was split into six specialty shop lots, with new tenants such as Starbucks and Cache Cache. The average rental for the recovered space increased by 300%. In progress is the reconfiguring of the layout of a ~2,500 sqm space on level 2 that was previously master-leased. Space occupied by a food court on level 3 (~950 sqm) has been leased to fashion tenants on a short-term basis.
Healthy financial position
We note that CRCT continues to have a strong financial position, with 100% of assets being unencumbered, a gearing of 30.4% and an interest coverage of 10.1x. CRCT has no major financing due in 2012.
Maintain BUY
We raise our fair value slightly from S$1.70 to S$1.71 and maintain our BUY rating on CRCT. The FY12F dividend yield of 6.0% is attractive.
CapitaRetail China Trust (CRCT) reported 3Q12 DPU of 2.42 S cents, up 14.2% YoY, and in-line with our expectations. YTD 2012 DPU of 7.24 S cents formed 76% of our original 2012 DPU estimate of 9.5 S cents. We raise our estimates up slightly, increasing our FY12 DPU estimate to 9.7 S cents. 3Q12 gross revenue increased by 8.5% YoY to RMB194.2m, underpinned by tenants’ sales growth of 15.6% YoY at its six multi-tenanted malls. On a QoQ basis, tenants’ sales grew by 6.1%. Shopper traffic increased by 21.5% YoY and 8.0% QoQ. Higher revenue was registered across the portfolio except for Minzhongleyuan, which is undergoing asset enhancement. Net property income increased by 10.3% YoY to RMB126.5m. Excluding Minzhongleyuan, NPI grew 12.7% YoY. Strong NPI was posted for Xizhimen, Qibao, Saihan and Wuhu, with YoY growth of 18.5%, 57.2%, 35.5% and 30.4% respectively. Rental reversion across CRCT’s portfolio was good at +18.2%. As of 30 Sep, the weighted lease to expiry by gross rent was 5.3 years.
Good returns from completed AEI
CRCT gave an update on the completed AEI at Minzhongleyuan. Reconfigured space recovered from a Pizza Hut was split into six specialty shop lots, with new tenants such as Starbucks and Cache Cache. The average rental for the recovered space increased by 300%. In progress is the reconfiguring of the layout of a ~2,500 sqm space on level 2 that was previously master-leased. Space occupied by a food court on level 3 (~950 sqm) has been leased to fashion tenants on a short-term basis.
Healthy financial position
We note that CRCT continues to have a strong financial position, with 100% of assets being unencumbered, a gearing of 30.4% and an interest coverage of 10.1x. CRCT has no major financing due in 2012.
Maintain BUY
We raise our fair value slightly from S$1.70 to S$1.71 and maintain our BUY rating on CRCT. The FY12F dividend yield of 6.0% is attractive.
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