Wednesday, October 24, 2012

Frasers Centrepoint at record high; Brokers up target price



Frasers Centrepoint Trust rose as much as 1.8% to a record high after brokerages raised their target prices for the shopping mall owner, citing better-than-expected fourth-quarter results.

By 12:25 p.m., units of Frasers Centrepoint were at $1.945, with a volume of 1.2 million, compared with its full day average trading volume of 1.4 million over the last five sessions.

Frasers Centrepoint said its fourth-quarter distribution per unit was 2.71 cents, 15.3% higher than a
year ago, helped by higher gross revenue and net property income.

Citigroup raised its target price for the trust to $2.08 from $2.00, to factor in stronger contribution from its shopping mall Causeway Point, where full occupancy is expected at the end of the year.

Citi increased its 2013 and 2014 DPU estimates by 2-3%, and noted that Frasers Centrepoint’s gearing fell to 30.1%, giving it comfortable room to raise debt to support any potential acquisitions.

OCBC Investment Research also raised its target price on Frasers Centrepoint to $2.13 from $1.97 and maintained a ‘buy’ rating, on expectations of better operating performance.

The brokerage expects Frasers Centrepoint to acquire a property, Changi City Point, in 2013, which it said should provide further growth.

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