CapitaMall Trust

UOBKayhian on26 Jan 2015

FY15F PE (x): 20.8
FY16F PE (x): 20.5

CapitaMall Trust (CMT) reported a 4Q14 DPU of 2.86 S cents (+5.6% yoy, +5.1% qoq). Full-year 2014 DPU of 10.84 S cents is in line with our expectations, accounting for 100.4% of our full-year estimate of 10.1 S cents. Footfall fell 0.9% yoy and tenant sales dropped 1.9% yoy psfpm. Lukewarm consumer demand was likely exacerbated by increased competition from new malls (Suntec’s Phase 3 AEI is slated to attain TOP soon) and the rise of e-commerce platforms. Tenant sales in segments such as toys and hobbies, telecommunications and Information Technology have been hit hardest, registering 10-15% drop in sales. Downgrade to SELL with an unchanged target of S$2.14, based on DDM (required rate of return: 6.8%, terminal growth: 1.8%). The retail environment is expected to remain challenging from the increased supply, rising costs and threat from alternative retail channels.