Journey to Wealth
CapitaMalls M'sia Trust - 9M12 within
Period 3Q12 / 9M12
Actual vs. Expectations 9M12 realized net income (RNI) of RM103.4m was within expectations, making up 74% of street and 72% of our estimates. Portfolio occupancy rates remain healthy and within expectations at 98.5%.
Dividends None as expected as payout is on a semi-annual basis; entitlement for 3Q12 is 2.13sen.
Key Results Highlights YoY, 9M12 RNI grew 29% on the back of East Coast Mall (ECM) full year contributions. Earnings also saw positive rental reversions of +6.7% mainly due to ECM (changes of tenant mix) and Gurney Plaza (post 2011 enhancement works).
QoQ, RNI was flat at RM34.6m against a 2% rise in revenue because of higher net property expenses (+5% QoQ) given higher utilities bills and staff costs.
Outlook Still no clear acquisition timeline, including timing of acquiring its parent's Queensbay Mall. Expecting FY12E CAPEX of RM40m. Sungei Wang (SW) refurbishment works will commence in Dec- 12. Earlier, CMMT indicated FY12E CAPEX of RM10-20m on SW; total SW CAPEX is RM50m over 12 months or over 4Q12-FY13.
Going forward, energy saving measures will be undertaken for all malls in view of higher utilities cost as Malaysia heads towards a subsidy rationalization mode.
Change to Forecasts No changes to FY12-13E RNI and gross dividend yields of 4.6% each.
Rating Maintain MARKET PERFORM
Severe yield compressions over the year with only a 1.4ppt premium spread (appropriate as it is only the 4th largest* to our FY13E 10-yr MGS of 3.3%, implying limited upsides from hereon.
Valuation No changes to TP of RM1.80 based on target FY13E gross yield of 4.7% or net yield of 4.2%.
Risks Risks to calls are further compressions in the 10-year MGS beyond our expected FY13E 3.3% and yield accretive asset acquisitions.
Source: Kenanga
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