Thursday, October 21, 2010

CapitaComm - DMG ups CapitaCommercial Trust target to $1.55

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST
Research House: DMG


DMG raises CapitaCommercial Trust (C61U.SG) target to $1.55 vs $1.24. Says 3Q results above expectations, with DPU of 1.99 cents, +7.6% on-year, +1.0% on-quarter; representing 27% of FY10 forecast of 7.2 cents; raises FY10-FY13 DPU forecast by 6.0%-8.0% to account for higher rental assumptions.



Notes, 1.0% on-year fall in net property income due to loss in rental income resulting from sale of Robinson Point, Starhub Centre. 


Adds, leasing activities gaining buoyancy; tenants are expanding; portfolio committed occupancies rose to 98.2% vs 95.6% in 2Q. Keeps Neutral rating; “at our target price, CCT trades at FY11 yield of 4.8%, a reasonable peg in our view.”

Says await better entry; “Singapore office rents are at the point of inflection and long-term rental growth prospects are likely to be robust once excess capacity is absorbed.” REIT flat at $1.44.

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