Monday, 26 January 2015

Frasers Centrepoint Trust

UOBKayhian on 26 Jan 2015

FY15F PE (x): 18.3
FY16F PE (x): 18.3

Frasers Centrepoint Trust (FCT) reported 1QFY15 DPU of 2.75 S cents, (+10.0% yoy, - 1.3% qoq) its strongest first-quarter showing yet. The results are in line with our expectations with 1QFY15 DPU accounting for 23.9% of our full-year forecast. FCT’s latest operating asset, Changi City Point, registered the highest reversion rate within the portfolio, at 10.7% in 1QFY15. Over 50% of leases expiring in FY15 at Causeway Point and Northpoint were renewed in 1QFY15 at healthy reversion rates of 9.1% and 6.1% respectively. Downgrade to HOLD post the strong 13% yoy increase in the share price. Our target price of S$2.23 is based on DDM (required rate of return: 6.8%, terminal growth: 1.8%). Entry price is S$1.90.

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