SG: MARKET PULSE: FCT, CRCT, Yoma (23 Oct 2013)

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.58

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.87

MARKET PULSE: FCT, CRCT, Yoma

23 Oct 2013

KEY IDEA Frasers Centrepoint Trust: Repeating its success Frasers Centrepoint Trust's (FCT) FY13 DPU came in at 10.93 S cents (+9.2%), spot on with our DPU projection. We note that overall performance has remained robust, with portfolio occupancy maintained at a high 98.4%, while positive rental reversion of 10.8% was achieved. We also understand ~2% of retail space at YewTee Point is expected to start operating in Oct, which is likely to improve the mall's occupancy. For Bedok Point, management also updated that it has successfully secured an electronics retailer as its anchor tenant for basement one. This may translate to a more stable performance at the mall. Looking forward, FCT reiterated CWP and Northpoint will continue to perform, as leases at the malls amounting to 75.5% of FCT's gross rent are due for renewal and positive reversions are still expected. FCT also revealed that the strata title division of One@Changi City is progressing well, and that the asset injection may take place in 2014. We are rolling our valuation to FY14, while keeping our forecasts largely intact. Our fair value is in turn raised to S$2.02 from S$1.96 previously. As upside now looks compelling, we upgrade FCT from Hold to BUY. (Kevin Tan) MORE REPORTS CapitaRetail China Trust: 3Q13 results in line CRCT reported 3Q13 results that were in line with ours and the street's expectations. Gross revenue climbed 2.2% YoY to S$39.5m. Property expenses rose 7.8% YoY to S$14.5m, chiefly due to higher property management fees and staff related costs. Net property income fell 0.8% YoY to S$25.0m. Total return for the period after tax stayed roughly flat YoY at S$15.2m. 3Q13 distributable income grew 2.1% YoY to S$17.1m. DPU, however, fell 6.6% YoY to 2.26 S cents due to a private placement last November. Rental reversion for the multi-tenanted malls, excluding CapitaMall Minzhongleyuan (which is undergoing AEI), is healthy at 10.0%. We maintain our BUY rating on CRCT but place our fair value of S$1.58 under review. (Sarah Ong) Yoma Strategic Holdings: To operate Volkswagen's first service center in Yangon Yoma reported that it will operate Volkswagen's first service center in Yangon, Myanmar, which is expected to begin operations in Oct 13. Yoma's 70% owned subsidiary, German Car Industries Company (CGI) will enter into a service partner agreement with Volkswagen Aktiengesellschaft (VW) to provide maintenance and repair services and sell genuine vehicle parts to VW automobile owners. We understand that the automotive market in Myanmar is currently dominated by Japanese cars and that VW currently has no manufacturing facilities or car show room in Myanmar, and hence this agreement is expected to have limited financial impact for Yoma over the near term. That said, we see this further strengthening the growth potential of the group's automotive division which, together with a similar service agreement with Mitsubishi earlier, is one that is steadily growing - particularly so given that VW is a significant global player with a strong brand. We maintain a HOLD rating on the counter with our fair value estimate of S$0.87 under review. (Eli Lee)

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