MARKET PULSE: A-REIT, CDL HT, SGX & CMT (18 April 2012)

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.31

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: BUY

Target Price: 2.04

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 7.00

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.02

MARKET PULSE: A-REIT, CDL HT, SGX & CMT

18 April 2012

KEY IDEA Ascendas REIT: Another display of strength Ascendas REIT (A-REIT) turned in a sturdy set of results as expected. 4QFY12 NPI rose by 13.2% YoY to S$95.1m, in line with our estimate of S$93.2m. DPU of 3.50 S cents is also consistent with our expectation of 3.24 S cents, and represents a 7.0% YoY growth despite an 11.2% increase in unit base. On its operational front, we note that the occupancy for multi-tenanted properties and portfolio remained robust at 92.8% and 96.4% respectively. Additionally, all segments of the portfolio registered positive rental reversions of 5.2-15.7% over the year. In the coming year, A-REIT expects to maintain a stable performance, with acquisitions and developments completed in FY12 to contribute positively to its income. Management also appears to be comfortable with the potential supply in industrial space over the next two years, but is more concerned with the impact of a broad-based slowdown in the economy and its accompanying volatility. However, the REIT noted that the threat of such a downturn is low, and that the enquiries and viewing of its properties are still healthy. We maintain our BUY rating and S$2.31 fair value on A-REIT.(Kevin Tan) MORE REPORTS CDL Hospitality Trusts: Better RevPAR outlook We are raising our 2012 RevPAR growth estimates from 5.5% to 7.5% for CDLHT's Singapore hotels on the basis of strong Singapore hotel figures year to date and continued positive outlook. A senior executive of Millennium & Copthorne (M&C) International expects room rates at M&C's five Singapore hotels to grow 5% YoY from ~S$219 in 2011, while occupancies could climb by 2-3 ppt from 87%. RevPAR for these hotels have already increased 10% in the first two months of this year. These five hotels are on master leases whereby CDLHT receives rent in the form of 20-30% of the hotel revenue and 20% of the hotel gross operating profit, subject to minimum fixed rents. The hotels constituted 60.5% of CDLHT's 2011 gross revenue. We maintain our BUY rating on CDLHT and raise our fair value estimate to S$2.04 (from S$2.00 previously). (Sarah Ong) Singapore Exchange: Muted outlook; downgrade to HOLD Singapore Exchange (SGX) posted a set of 3QFY12 results which were in line with market expectations. Net earnings came in at S$77.8m, up 16% YoY and 18.9% QoQ. Securities Revenue accounted for 40% of total revenue, followed by Derivatives at 26%. It declared an unchanged base dividend of 4 cents per share for this quarter. While the IPO market was quiet in 3Q12, it has picked up in the early part of 4Q12, and indications are that there are more in the pipeline. As its results were in line with our expectations, we are leaving our full year estimates intact. The stock has appreciated by about 10% since our report in Jan, and at current price, we see limited upside to our unchanged fair value estimate of S$7.00. As such, we are downgrading our rating to HOLD. (Carmen Lee) CapitaMall Trust: 1Q12 results within expectations CapitaMall Trust (CMT) reported 1Q12 distributable income of S$76.6m (DPU: 2.30 S-cents) which is 4.6% higher YoY. This is broadly in line with our expectations and make up 23% of our FY12 forecast. Topline came in at S$155.2m, up 0.4% YoY. 1Q performances across CMT's portfolio stayed firm; occupancy improved to 96% with pressure coming mostly from Atrium@Orchard due to enhancement works. Average rental reversions over the quarter remained positive at 6.1% across the portfolio. Management also reported that JCube opened on 2 Apr 12, with 99% of NLA committed, and would contribute to earnings from 2Q12 onwards. We will speak with management later and in the meantime, maintain our BUY rating for CMT with fair value estimate of S$2.02 UNDER REVIEW. (Eli Lee)

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NEWS HEADLINES - US stocks surged as Spain sold more debt than expected and the IMF raised economic forecasts for global growth and the US. The S&P 500 Index gained 1.6%. Oil and other commodities showed gains. - Keppel Telecommunications & Transportation registered 1Q12 revenue of S$33.6m, up 11% YoY. PATMI gained 4% YoY to reach S$14.4m. NAV per share climbed 3 S-cents to S$0.74. - Food Junction will close its Beijing food-court, pre-terminating the leasing of the premises. The cessation is expected to have a negative impact on the group for 1Q12 ended Mar and FY12. - AIMS AMP Capital Industrial REIT has been assigned an investment grade BBB- rating by S&P. Since Sep 2009, the REIT has reduced its gearing from 44.7% to 30.7% as at end Dec 2011. - China Gaoxian Fibre Fabric Holdings has secured an extension to Jul 25th from the SGX to finalise and submit its draft proposal for resumption of trading.