UOBKayhian on 21 Feb 2014
FY14F PE (x): 17.5
FY15F PE (x): 13.2
Results in line with expectations. ARA reported a 25% rise in PATMI to S$22.1m due to
fees from the acquisition of Kingswood Ginza by Fortune REIT and higher REIT
management fees from REIT AEIs and revaluation gains. 2013 net profit of S$81.4m
excluding mark-to-market (MTM) losses on REIT revaluations is in line with expectations
at 104% of our forecast.
Maintain HOLD with a marginally higher target price of S$1.94 (from S$1.92). Our target
price is based on a sum-of-the-parts (SOTP) methodology, which comprises: a) the
DCF- derived enterprise value of ARA's stable fee-based earnings stream, assuming
2.0% terminal growth and 7.7% required rate of return, b) strategic stakes in REITs and
private funds, and c) net cash. Entry price is at S$1.69.
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