MAPLETREE GREATER CHINACOMM TR
RW06.SI
Mapletree Greater China Commercial Trust: Robust double-digit growth
2QFY16 DPU rose 12.6% YoY
Positive rental reversions of 20%- 25%
Full quarter impact from Sandhill Plaza
2QFY16 results met our expectations
- Mapletree Greater China Commercial Trust (MGCCT) reported a strong set of 2QFY16 results which came in within our expectations.
- Gross revenue accelerated 25.4% YoY to S$84.6m. This was driven by positive rental uplifts achieved in previous quarters by Festival Walk (FW) and Gateway Plaza (GP), coupled with a full quarter of contribution from Sandhill Plaza (SP), which was acquired on 17 Jun 2015.
- Consequently, MGCCT’s DPU jumped 12.6% to 1.808 S cents.
- On a 1HFY16 basis, its gross revenue increased 22.3% to S$160.6m and this formed 49.2% of our FY16 forecast. DPU of 3.499 S cents represented a growth of 10.7%, and constituted 48.7% of our full-year projection.
Underlying operations remain robust
- Management achieved positive rental reversions of 20% and 25% at FW’s retail and GP’s office segments, respectively, as at 30 Sep 2015, although the latter was a moderation from the 29%-32% recorded from 2QFY15 to 1QFY16. 81% of MGCCT’s expired/expiring leases (by lettable area) in FY16 have already been committed.
- Footfall and tenant sales at FW registered YoY growth of 2.9% and 1.7% to reach 20.3m and HK$2.58b, respectively, for 1HFY16. Overall portfolio occupancy declined marginally from 99.0% to 98.4%, but still a healthy level, in our view.
- SP has now reached full occupancy, versus 96.2% (as at 31 Mar 2015) prior to MGCCT’s acquisition. We believe this reflects management’s strong execution capabilities.
Still a BUY
- MGCCT’s gearing ratio stood at 41.0%, as at 30 Sep 2015, which is relatively stable when compared to end 1QFY16 (41.2%). Management has hedged 86% of its interest cost for FY16, as well as ~81% of its forecasted FY16 distributable income (comprising both HKD and CNY).
- We retain our forecasts and S$1.10 fair value estimate, and continue to rate MGCCT a BUY, given its resilient portfolio, strong management team and attractive valuations.
- The stock is trading at a distribution yield of 7.3% and P/B ratio of 0.84x for FY16, based on our projections.
Wong Teck Ching Andy
OCBC Securities
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http://www.ocbcresearch.com/
2015-10-28
UOB Kay Hian
SGX Stock
Analyst Report
1.10
Same
1.10
