Cache Logistics Trust - OCBC Investment 2017-09-12: Trading At 7.7% FY18F Yield

Cache Logistics Trust - OCBC Investment 2017-09-12: Trading At 7.7% FY18F Yield CACHE LOGISTICS TRUST K2LU.SI

Cache Logistics Trust - Trading At 7.7% FY18F Yield

  • The ex-rights trading for Cache Logistics Trust’s (CACHE) rights issue began last Fri and our ex-rights fair value estimate is S$0.78. Our fair value in turn implies an intrinsic value of S$0.148 for the rights entitlements, given the rights issue price of S$0.632 per unit. The commencement of trading of rights entitlements is scheduled to be 9am on 15 Sept, Fri. 
  • As mentioned earlier, we are positive on the significant decrease in leverage though we believe that valuations for CACHE are not compelling now. Against yesterday’s closing price, CACHE is trading at a FY17F dividend yield of 8.1% and a FY18F yield of 7.7%. 
  • In terms of CACHE’s operational outlook, we remain concerned about the challenging industry conditions. While CACHE has minimal renewal risk for the 2H17, ~21% of leases by gross rental income is up for renewal in 2018. 
  • CACHE’s debt headroom of S$218.1m, however, does open up possibilities for yield-accretive acquisitions. 
  • We maintain our HOLD rating on CACHE with an ex-rights fair value of S$0.78.




Deborah Ong OCBC Investment | http://www.ocbcresearch.com/ 2017-09-12
OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 0.780 Same 0.780



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