CAPITALAND RETAIL CHINA TRUST
AU8U.SI
CapitaLand Retail China Trust - 1Q16 RESULTS WITHIN EXPECTATIONS
- 1Q16 DPU grew 2.7% YoY
- Positive rental reversions of 7.3%
- Maintain HOLD
1Q16 results within expectations
- CapitaLand Retail China Trust (CRCT) reported its 1Q16 results which came within our expectations.
- Gross revenue increased 1.1% YoY to S$52.3m, largely due to a weaker CNY relative to SGD, as gross revenue in CNY terms rose 2.5% to CNY256.5m. The latter was affected by the continued impact of the Zhongshan Avenue road closure on CapitaMall Minzhongleyuan (MZLY).
- Trade mix adjustments at CapitaMall Wuhu also posed a drag.
- Rental growth in its other multi-tenanted malls continued to be healthy at 4.1% YoY.
- DPU grew 2.7% YoY to 2.71 S cents.
Positive gross revenue and NPI growth at most malls
- Aside from MZLY and Wuhu, CRCT’s multi-tenanted and master-leased malls delivered positive gross revenue growth of 3.5% YoY and NPI growth of 3.2% YoY in RMB terms in 1Q16.
- Overall portfolio committed occupancy fell 0.5ppt QoQ to 94.6% with most multi- tenanted malls showing a decrease.
- Tenants’ sales growth clocked a mild growth of 1.0% YoY, while shopper traffic fell 1.4% YoY. Portfolio rental reversions came in at 7.3% in 1Q16, slightly lower than FY15’s 8.1%.
- Excluding Wuhu, the rental reversion rate would have been 8.1%. We note that for the rest of 2016, MZLY has 33.0% of its leases (as a percentage of the mall’s rental income) expiring while Wuhu has 19.4%; this may continue to exert a drag on CRCT’s rental reversions for FY16.
Maintain HOLD
- As at 31 Dec 2015, CRCT had a healthy gearing ratio of 28.7%, with an average cost of debt of 3.04%. 74.1% of its total borrowings are fixed (81.8% if we exclude onshore RMB denominated loans).
- Maintain HOLD with fair value estimate of S$1.48.
Andy Wong Teck Ching CFA
OCBC Investment
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http://www.ocbcresearch.com/
2016-04-15
OCBC Investment
SGX Stock
Analyst Report
1.48
Same
1.48
