• FY14  core  net  profit  of  MYR150m  (+0.9%  YoY)  was  within ours and consensus’ expectations.
• FY15 earnings to be driven  by East Coast Mall’s higher rental income post-completed enhancement works.
• Maintain  BUY ;  nudged  TP  to  MYR1.60  (DCF-based;  from MYR1.59) following marginal earnings adjustments.

What’s New

4QFY14’s  core  net  profit  of  MYR39.2m  (+1.6%  YoY,  +9.7%  QoQ) brings  FY14  core  net  profit  to  MYR149.7m  (+0.9%  YoY).  This represents 97-98% of ours and consensus’ expectations; in-line. FY14’s profit was mainly driven by positive rental reversions of 5.3-12.0%  for  most  tenancies.  However,  Sungei  Wang  Plaza  continues to  be  affected  by  ongoing  KVMRT  works  and  recorded  negative rental reversion of 9.3%.  FY14’s revenue was also improved  by East Coast  Mall  which  has  completed  its  two-phase  asset  enhancement works in 4QFY14.

Meanwhile,  the  Trust  has  declared  its  final  DPU  of  4.38  sen  (exdate:  30 th of  January)  which totals  up  to  full-year DPU  of  8.91  sen or 100% of distributable income – within expectations.

What’s Our View

We  remain  positive  on  CMMT’s  near-term  earnings  growth  as  East Coast  Mall  could  bring  in  higher  rental  income  following  its enhancement  works  which  include expansion of NLA  (about  +11%). Also, about 28% of total NLA or 695.5k sq. ft. is due for renewal in 2015  and  this  could  entail  better  rental  movements.  However,  we remains  cautious  on  2015’s  retail  outlook  as  consumer  sentiment could be dampened by the implementation of GST in April 2015.

We  maintain  BUY  on  CMMT  which  is  backed  by  6.5%  net  dividend yield and FY15-17’s earnings growth of 5-9%.

Source: Maybank Research - 21 Jan 2015