Stock Name: K-REIT
Company Name: K-REIT ASIA
CIMB in a July 19 research report says: "K-REIT's 2Q11 DPU of 1.93 cents met both our and consensus expectations as it came in at 26% of our full-year forecast, taking 1H11 DPU to 49% of forecast.
"K-REIT also announced the A$154 million-170 million forward purchase of a 50% interest in 8 Chifley Square in Sydney. The acquisition will be structured to provide a steady 6.65% yield. But there are risks associated with going overseas and with a rise in aggregate leverage to above 40% for the downpayment for the purchase.
"Factoring in the acquisition, we raise our FY12-13 DPU estimates by 2-5%. But our DDM-based target price is trimmed from $1.52 to $1.49 as we raise our cost of equity to 7.5% to factor in higher overseas exposure. MAINTAIN NEUTRAL."
Company Name: K-REIT ASIA
| Research House: CIMB | Price Call: HOLD | Target Price: 1.49 |
CIMB in a July 19 research report says: "K-REIT's 2Q11 DPU of 1.93 cents met both our and consensus expectations as it came in at 26% of our full-year forecast, taking 1H11 DPU to 49% of forecast.
"K-REIT also announced the A$154 million-170 million forward purchase of a 50% interest in 8 Chifley Square in Sydney. The acquisition will be structured to provide a steady 6.65% yield. But there are risks associated with going overseas and with a rise in aggregate leverage to above 40% for the downpayment for the purchase.
"Factoring in the acquisition, we raise our FY12-13 DPU estimates by 2-5%. But our DDM-based target price is trimmed from $1.52 to $1.49 as we raise our cost of equity to 7.5% to factor in higher overseas exposure. MAINTAIN NEUTRAL."
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