Wednesday, January 27, 2010

Fortune REIT-DBS

Fortune REIT
BUY HK$3.08
Price Target : 12-month HK$3.71
(Prev HK$3.61)

A safe play in a volatile market
At a Glance
• FY09 result was slightly above our expectation for stronger property income and lower interest expense.
• Earnings outlook should remain stable offering attractive yield
• Maintain BUY, TP raised to HK$3.71.

Result Highlights
Revenue = HK$701m (+10%)
FY09 distribution income = HK$338m (+12%)
DPU - HK$0.302 (-18%)

There was a modest 4.2% rental reversion for renewals. However, net property income grew only 7%, as cost-to-income ratio inched up to 27.3% from 25% the year before. Portfolio occupancy reached a new high of 96.4% at Dec 09 after vacancies at Smartland and The Household Center improved considerably in 4Q09. Interest expense fell 13% to HK$88m on lower borrowing costs, despite additional loans raised to partly fund the acquisitions. Gearing remains low at 23.7% because of larger shareholders’ equity led by revaluation surplus on investment properties. Fortune REIT has room to make yield accretive acquisitions worth up to HK$2.1bn without tapping the equity market, before its gearing hits the 35% ceiling limit.

In 2010, Fortune REIT plans to revamp and reposition City One Shatin Property to give the mall a new image and strengthen its retail offerings. Unit price of Fortune REIT has rebounded 24% from the low in September. Despite this, it still offers distribution yield of 7.4% for FY10 and 7.7% for FY11. In view of its resilient earnings and better trading liquidity postacquisition, Fortune REIT would be a safe play in a volatile market. We roll forward our valuation to FY11, with DDMbased target price of HK$3.71. Maintain BUY.

Monday, January 25, 2010

MAS open to consolidation

Publish date:25/01/10

Ascendas India Trust-DBS

Ascendas India Trust
BUY S$1.06 ST
Price Target : 12-Month S$ 1.17 (Prev S$ 1.06)

Reasons to stay invested
• Consistently strong performance
• Earnings spike to come in FY11 post completion of 2 of its new buildings
• Buy for growing yields, TP S$1.17

Gross revenues = S$29.9m (+4% yoy, -2% yoy),
Net property income (NPI) = S$19.3m (+13% yoy, +1% qoq),
Distributable income = S$14.1m (-8% yoy, 0% qoq
DPU = 1.85 Scts.

Sustained occupancies, upside from development projects.
Looking into FY11, a-itrust will be renewing c35% of its space, most of which are from the Vega and the Crest. Given that this is the first renewal cycle, we believe that tenants should remain at their existing locations. In addition, we look forward to a-itrust taking delivery of 2 out of 3 development projects in the later part of FY11, which will lead to positive earnings growth.

Adjusting INR assumptions. The strengthening of INR vs S$ exchange rates means that future hedges are likely to be in a-itrust favor. Therefore, we adjust our INR vs S$ estimates to INR 33.5 to S$1, in line with our DBS currency strategist’s outlook for INR in 2010 which is similar to the rate that the trust has hedged its next distribution payment.

BUY for growth, TP S$1.17. a-itrust’s DPU CAGR of 9% over FY11-12 remains a key attraction, prospective yield of 7.9-8.5%. Upside earnings surprise will hinge on potential acquisitions given a-itrust’s strong financial leverage position. Our target is adjusted to S$1.17 from higher earnings estimates and rolling forward our valuations.
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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