Journey to Wealth
CapitaMalls M'sia Trust - 1H12 within expectationst title
Period 1H12
Actual vs. Expectations 1H12 realised net income (RNI) of RM68.9m was within expectations, accounting for 49% of the street's FY12E RNI of RM140.1m and 48% of our RM143.5m.
Dividends A 2Q12 GDPU of 2.1sen has been declared, making the total semi-annual dividend payout at 4.2 sen to date vs. our FY12E GDPU of 8.1sen* (5.2% yield).
Key Results Highlights YoY, 1H12 RNI grew 30% YoY due to a full contribution from East Coast Mall (EC). The portfolio saw strong average positive rental reversions of 7.3% mainly driven by 1) Gurney Plaza (GP) post-AEI works, which increased NLA by 23k sf and 2) EC Mall major lease renewals. Portfolio occupancy rate is steady at 99%.
QoQ, 2Q12 net profit of RM132m grew 286% due to RM98.4m in fair value gains from all the assets, particularly GP and EC, resulting in strong NAV/unit** growth of 5% to RM1.15.
Outlook NAV is still conservative because CMMT is using cap rates of 7.0%-7.5% vs. current cap rates of 5.5%-6.0%.
The group intends to spend c.RM30m CAPEX in FY12E (of which c.RM9m has already been spent) mainly for Sungei Wang and then GP's AEI.
There are no indications of any new asset injections including Queensbay Mall.
For capital management initiatives, refer overleaf.
Change to Forecasts Maintaining FY12-13E RNI but adjusted up FY12E GDPU by 3% to 8.4 sen (5.3% yield) to impute portions of manager fees payable in units. There are no changes to FY13E gross yield of 5.4%.
Rating Maintain OUTPERFORM
Expecting further yield compressions due to the upcoming listing of IGB REIT and the potential REIT-ing of KLCC Property Holding's assets, which should lend strength to strong valuations.
Valuation Maintaining TP of RM1.69 on targeted FY13E net yield of 4.5%, which is the steepest valuation awarded among our M-REIT universe as retail M- REITs are in vogue while CMMT has a pure retail asset model.
Risks Retail sector risks. Sector de-rating if investors switch to higher beta developers.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
