MARKET PULSE: Raffles Medical, Yoma, FCT, CRCT (23 Oct 2012)

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.82

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.51

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.97

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.70

MARKET PULSE: Raffles Medical, Yoma, FCT, CRCT

23 Oct 2012

KEY IDEA Raffles Medical Group: Minor setback but outlook still positive Raffles Medical Group (RMG) reported 3Q12 PATMI of S$12.6m (+6.6% YoY) on the back of a 13.9% YoY increase in revenue to S$78.7m, such that 9M12 PATMI and revenue formed 68.0% and 73.3% of our FY12 forecasts, respectively. Revenue met our expectations but PATMI was a tad below due to higher-than-expected operating expenses. Regarding the unsuccessful application for the change of use of its commercial podium for medical clinics, we understand that concerns over traffic congestion in the area were one of the reasons for the rejection. RMG would continue to work closely with the relevant authorities on this. We trim our FY12F PATMI estimates by 2.5% on lower margin assumptions but retain our FY13F forecasts as RMG's staff cost pressures were driven largely by headcount expansion in anticipation of its enlarged operations, which have yet to fully contribute to its topline. Maintain BUY and S$2.82 fair value estimate (24x FY13F EPS). (Wong Teck Ching Andy) MORE REPORTS Yoma Strategic Holdings: Hit by one-time charges Yoma Strategic Holdings (Yoma) reported a negative 2QFY13 PATMI of S$4.2m, mostly due to a S$5.4m one-time non-cash share based payment to the CEO, partially offset by increased sales of residences and land development rights. Accounting for non-operating expenses, net operating profit attributable to equity holders would have been S$1.7m - up 22% YoY - which we judge to be mostly in line with expectations. 2QFY13 gross margins were somewhat higher than forecasted as management took a one-time reversal of construction costs of ~S$1m during the quarter, though this was offset by higher admin costs than expected. 1HFY13 PATMI, ex-non-operating expenses, now constitutes 61% of our annual FY13 forecast, which we keep intact. We continue to be positive on the long term outlook of Yoma as the Myanmar economy continues to open up, but view Yoma's shares to be fairly priced at current levels based on its fundamental valuation. Maintain HOLD with an unchanged fair value estimate of S$0.51. (Eli Lee) Frasers Centrepoint Trust: Strong end to FY12 Frasers Centrepoint Trust (FCT) released its 4QFY12 results this morning. NPI grew by 13.7% YoY to S$28.7m, while distributable amount rose 21.8% to S$22.3m. DPU also reached its record high at 2.71 S cents (+15.3% YoY) and was spot on with our 4Q DPU forecast. This brings the FY12 DPU to 10.01 S cents, up 20.3%. Expectedly, the strong performance was driven by Causeway Point following the substantial completion of the mall's refurbishment and full-year contribution from Bedok Point. Positive rental reversion of 8.9% on leases renewed was also achieved during the quarter. As at 30 Sep, FCT's portfolio occupancy was maintained at 93.6% (93.7% in 3Q). NAV increased 8.5% YoY to S$1.53 per unit, driven mainly by an enlarged asset base and revaluation gain of S$100.7m. This translates to a P/NAV of 1.23x. We will be attending the analyst briefing to get more details on its outlook. For now, we place our Buy rating and fair value of $1.97 UNDER REVIEW. (Kevin Tan) CapitaRetail China Trust: Solid 3Q12 results in line with expectations CapitaRetail China Trust (CRCT) reported 3Q12 DPU of 2.42 S cents, up 14.2% YoY, and in-line with our expectations. YTD 2012 DPU of 7.24 S cents forms 76% of our 2012 DPU estimate. Based on the closing unit price of S$1.635 on 22 Oct, 3Q12 DPU implies an annualized distribution yield of 5.9%. 3Q12 gross revenue increased by 8.5% YoY to RMB194.2m, underpinned by increased tenants' sales of 15.6% at its six multi-tenanted malls. Higher revenue was registered across the portfolio except for CapitaMall Minzhongleyuan, which is undergoing an asset enhancement initiative. Net property income increased by 10.3% YoY to RMB126.5m. Excluding CapitaMall Minzhongleyuan, NPI grew 12.7% YoY. We are in the process of reviewing our estimates and for now, we put our fair value of S$1.70 on CRCT and Buy rating UNDER REVIEW. (Sarah Ong)

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NEWS HEADLINES - The DJIA and S&P 500 Index ended flat, as concerns over slower global growth were offset by earnings which exceeded expectations. - A Singapore Index of Inflation Expectations report revealed that consumers expect a higher rate of inflation than they did a quarter ago. - Aircraft Capital Trust, a business trust backed by General Electric Co, could be seeking about US$700m in a Singapore IPO. - Religare Health Trust said that it has put in place forward contracts to hedge against its foreign currency risk.