Period 1Q12
Actual vs. Expectations
1Q12 realized net income (RNI) of RM19.9m was within
expectations, making up 24% each of the street’s FY12E RNI of RM81.6m and our RM81.3m. Dividends
1st interim GDPU of 4.3 sen (including 0.05 sen non
taxable portion), which accounts for 24% of our FY12E GDPU of 18.0 sen (6.6%
yield).
Key Results Highlights
- YoY, 1Q12 RNI rose by 23% due to new contributions from
PTP D8 @ Johor and Axis Eureka. Portfolio occupancy rates also improved to
97.8% from 1Q11’s 95.8%.
- QoQ, 1Q12 RNI was boosted by 18% by new acquisition income
from industrial warehouses in Seberang Prai and Bayan Lepas. The group also achieved
positive rental reversions (0%-4.6%) for 1.5% of the porfolio’s NLA.
Outlook
- Expects acquisition of up to RM300m worth of properties in
FY12E (inclusive of actual FY12 proposed/completed acquisitions), assuming placement
of 90.8m new units (RM221m new funds) and gearing of slightly less than 0.35x.
- Asset enhancement initiatives of up c. RM27m will be spent
in FY12E to carry out works in Infinite Center and Wisma Bintang. To date, the group
has already completed its Subang Hi-Tech works to suit Fonterra, whose improved
yields have been imputed in our estimates.
Change to Forecasts
Maintaining FY12-13E RNI of RM81.3mRM87.6m. New drivers
include the Seberang Prai and Bayan Lepas industrial warehouses as well as the
proposed acquisition of industrial properties @ Nilai.
Rating MAINTAIN OUTPERFORM
Even at its premium valuation level (1.3x FY12E PBV) now, we
reckon the stock will continue to rerate itself because of its unique value proposition
(potential asset trading), which other M-REITs may not be able to offer for
now.
Valuation
No changes to TP of RM2.82, based on GGM (8.2% required rate
of return, 2.5% terminal growth, FY12E NDPU of 16.2 sen).
Risks
Office and industrial sector risks. Sector de-rating if
investors switch to higher beta developers.
Source: Kenanga
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