First REIT (FREIT) reported 1Q14 gross revenue of S$22.5m, which translates into a 28.3% YoY growth. Distributable amount to unitholders and DPU increased by 22.3% and 14.4% YoY to S$14.2m and 1.99 S cents, such that 1Q14 revenue and DPU formed 24.1% and 24.0% of our FY14 forecasts, respectively. This was within our expectations, with growth driven largely by a full quarter of contribution from two Indonesian hospitals which were acquired in May 2013. Looking ahead, FREIT’s main focus will remain on the Indonesian healthcare market. We do not foresee any impact on FREIT’s prospects and current operations from the upcoming Indonesian presidential elections. We keep our forecasts intact as this set of results closely matched our expectations. Maintain BUY, with an unchanged DDM-derived fair value estimate of S$1.21, as FREIT is still trading at an attractive FY14F distribution yield of 7.4%.
1Q14 results within our expectations
First REIT (FREIT) reported 1Q14 gross revenue of S$22.5m, which translates into a 28.3% YoY growth. Distributable amount to unitholders and DPU increased by 22.3% and 14.4% YoY to S$14.2m and 1.99 S cents, such that 1Q14 revenue and DPU formed 24.1% and 24.0% of our FY14 forecasts, respectively. We view this as in-line with our expectations. FREIT’s growth was driven largely by a full quarter of contribution from its two Indonesian hospitals, Siloam Hospitals Bali and Siloam Hospitals TB Simatupang, both of which were acquired in May 2013. Its net property income margin normalised to 98.7% (+1.0 ppt YoY; +3.9 ppt QoQ) as a result of a new rental structure struck for its Sarang Hospital (provisions made in FY13 due to payment issues by tenant). FREIT will trade ex-dividend on 21 Apr 2014, and the DPU of 1.99 S cents is payable on 29 May 2014. Unitholders may choose to receive their distributions in the form of fully-paid new units in lieu of any part or the entire cash amount of any distributions they are entitled to.
Indonesia remains as focal point
Looking ahead, FREIT’s main focus will remain on the Indonesian healthcare market. We conservatively expect contribution from its new Siloam Hospitals Purwakarta to commence on 1 Jul this year (pending unitholders’ approval). We do not envisage any impact from the upcoming Indonesian presidential elections as FREIT’s leases are long-term in nature and FREIT also does not foresee any major changes in regulations or policies in the Indonesian healthcare sector in the short to medium term.
Maintain BUY
We are keeping our forecasts intact as this set of results closely matched our expectations. Maintain BUY, with an unchanged DDM-derived fair value estimate of S$1.21, as FREIT is still trading at an attractive FY14F distribution yield of 7.4%.
First REIT (FREIT) reported 1Q14 gross revenue of S$22.5m, which translates into a 28.3% YoY growth. Distributable amount to unitholders and DPU increased by 22.3% and 14.4% YoY to S$14.2m and 1.99 S cents, such that 1Q14 revenue and DPU formed 24.1% and 24.0% of our FY14 forecasts, respectively. We view this as in-line with our expectations. FREIT’s growth was driven largely by a full quarter of contribution from its two Indonesian hospitals, Siloam Hospitals Bali and Siloam Hospitals TB Simatupang, both of which were acquired in May 2013. Its net property income margin normalised to 98.7% (+1.0 ppt YoY; +3.9 ppt QoQ) as a result of a new rental structure struck for its Sarang Hospital (provisions made in FY13 due to payment issues by tenant). FREIT will trade ex-dividend on 21 Apr 2014, and the DPU of 1.99 S cents is payable on 29 May 2014. Unitholders may choose to receive their distributions in the form of fully-paid new units in lieu of any part or the entire cash amount of any distributions they are entitled to.
Indonesia remains as focal point
Looking ahead, FREIT’s main focus will remain on the Indonesian healthcare market. We conservatively expect contribution from its new Siloam Hospitals Purwakarta to commence on 1 Jul this year (pending unitholders’ approval). We do not envisage any impact from the upcoming Indonesian presidential elections as FREIT’s leases are long-term in nature and FREIT also does not foresee any major changes in regulations or policies in the Indonesian healthcare sector in the short to medium term.
Maintain BUY
We are keeping our forecasts intact as this set of results closely matched our expectations. Maintain BUY, with an unchanged DDM-derived fair value estimate of S$1.21, as FREIT is still trading at an attractive FY14F distribution yield of 7.4%.
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