23 July 2013~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day : The real man smiles in trouble, gathers strength from distress, and grows brave by reflection.
- THOMAS PAINE
Singapore: The Day AheadSINGAPORE DAYBOOK : Man who demystified Temasek to step down. After 17 years, chairman Dhanabalan is handing over the reins to Lim Boon Heng [SINGAPORE] After 17 years as chairman of Temasek Holdings, S Dhanabalan will step down on Aug 1. He will be succeeded by former cabinet minister Lim Boon Heng, 65.
Mr Dhanabalan, 75, who has helmed the Temasek board since 1996, has accepted the board's request to continue after his retirement in an honorary advisory role.
"This has been a long process," said Mr Dhanabalan at a press briefing. "I'm looking forward to my retirement which has taken longer than anticipated."
In his letter of appreciation to Mr Dhanabalan, Prime Minister Lee Hsien Loong conveyed his "deepest thanks". He noted that Temasek has reviewed its Charter to stay abreast of a changing landscape while upholding its core principles of success - emphasising long-term, sustainable investments over short-term bets, developing talent, and imbuing in its officers a commitment to Singapore. (Source: The Business Times)
MARKET SCOOP
New Temasek CEO can be expected over coming years: Dhana
Tiger Airways posts $32.77m loss in Q1
a-iTrust Q1 DPU drops 5%
F J Benjamin to sell 'Superdry' label in Singapore, Malaysia
Suntec's asset enhancement on track, earnings improvement expected: Moody's
Singbridge's unit in jv to manage Sino-Singapore Jilin Food Zone
HK developer to buy 29.98% of Forterra Trust at S$2.98/unit
China's slowdown will affect Singapore economy: DBS
(Source: The Business Times)
UOB KAY HIAN says...
CAPITAMALL TRUST | HOLD | TP: S$2.14
CapitaMall Trust (CMT) reported a 2Q13 distributable income of S$87.7m (+10% yoy, +3% qoq) and a DPU of 2.53 cents (+6% yoy, 3% qoq)
1H13 DPU is in line with our expectation, accounting for 48.4% of our full-year DPU estimate of 10.30 cents
CMT has also retained S$5.7m (0.16 cent/unit) to be distributed later in 2013
Including distributable income retained in 1Q13, total amount retained would be S$12.3m (0.36 cent/unit), which would bring 1H13 DPU to 52% of our forecast
2Q13 revenues increased 10% yoy to S$183m while net property income (NPI) increased 12% yoy to S$126m, driven by the completion of asset enhancements (AEI) at Atrium and Bugis+ in 2H12, together with positive reversions of 6.4% for leases renewed in the quarter
Tenant sales in 1H13 increased 3.3% yoy while shopper traffic increased 4.8% yoy
Portfolio occupancy increased 0.8ppt qoq to 99.1% due to higher occupancies at Atrium@Orchard and Plaza Singapura
Revaluation gains of S$104m as valuers trimmed their cap rates for retail malls by about 15bp
Gearing edged down 0.3ppt qoq to 34.9% as CMT has fully redeemed S$98m of outstanding CBs due in 2013 and due to asset revaluation gains
Average cost of debt rose marginally by 0.2ppt to 3.4%
Management also highlighted the low sensitivity of funding costs to changes in floating rates, with every 50bp change in rates, impacting annual interest costs by S$1.5m (0.4% of DPU)
In addition, management shared that CMT is able to vary its cost of debt by varying the tenor of debt
Waiting further acquisition catalysts
We believe that the most likely acquisition target would be Star Vista, the recently completed (Sep 12) CapitaMalls Asia (CMA) shopping mall in Buona Vista, although management may be awaiting the completion of nearby office development, The Metropolis, and also stabilisation during the mall's first lease cycle
Other potential acquisition targets from the sponsor could include CMA's stake in Ion Orchard, the upcoming Bedok Mall (slated to complete in end-13) and a potential asset swap for the Westgate mall
Maintain HOLD and target price of S$2.14, using the dividend discount model (required rate of return: 6.8%, terminal growth: 1.8%)
CIMB Securities says ...
SUNTEC REIT | OUTPERFORM | TP: S$1.68
2Q13 DPU was in line with expectations at 24% of our and consensus full-year estimates (1H13 at 48%)
We trim our FY13-15 DPUs by up to 2% on the timing of rental contributions from AEIs
Maintain Outperform and DDM-based target price (discount rate of 8.3%)
We see valuation at 0.75x P/BV as attractive vs. peers, with rerating catalysts from the positive execution of Suntec City's AEI
2Q13 saw SUN's NPI fall by 38.5% yoy due to the partial closure of Suntec City Mall and Convention Centre
The impact on DPU (-4.7% yoy) was buffered by a larger S$7.8m (S$2.7m in 1Q13) top-up from the Chijmes sale proceeds
But Phase 1 of Suntec City mall AEI is now complete, with average passing rent achieved at a firm S$13.09 (average of S$10.10psf before AEI)
The uplift in rents from Phase 1 will flow through in 2H13 and the potential DPU top-up should taper off. SUN guides that it is well on track to achieving its 10.1% ROI target (S$12.59psf) for capex spent on this AEI
Phase 2 is now underway, with 70% of the leases pre-committed so far
With fewer fashion anchors, achieved rents for Phase 2 could be slightly lower than Phase 1
Committed occupancy for the rest of its portfolio stood at 99-100%
New office leases at Suntec City were secured at S$8.42psf, lower than the S$8.55psf done in 1Q13
This is due to a large 90k sf lease signed by one tenant, which warranted a discount
The balance of expiring office leases in FY13 is now down to 6.3% of total
SUN has secured a S$500m 5-year unsecured loan facility to refinance its debt due in 2013
SUN expects to see some interest costs savings from this exercise
With this, SUN will have no refinancing requirement until 2014
Around 60% of its debt is at fixed rates, and 40% at floating
DMG OSK Securities says...
CAPITAMALL TRUST | BUY | TP: S$2.21
CapitaMall Trust (CT) reported a DPU of 2.53 cents (+6.1% y-o-y) for 2Q13, in line with our forecast with a deviation of 1.2% (7.8% if the retained amount of SGD5.7m was included)
Revenue for the period grew 10.4% y-o-y to SGD182.7m, while NPI climbed 12.2% y-o-y to SGD125.6m
The strong 2Q13 results was mainly attributed to higher rental rates achieved from the portfolio's new and renewed leases, and contributions from the well-executed asset enhancement initiatives (AEIs) at JCube, Bugis Junction and The Atrium@Orchard
As of 30 June 2013, the occupancy rates at these malls were 99.9%, 99.5% and 98.5% respectively
Together with an expected increase in earnings contributions from Westgate by 1Q14 (currently c.70% pre-committed and is scheduled to open by 4Q13), we remain confident with CT's ability to post strong earnings for the rest of FY13
As we roll over to FY14F earnings, we upgrade CT to a BUY, with a slightly higher DDM-based (COE: 7.8%, TGR: 2.0% TP of SGD2.21 |
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