FRASERS CENTREPOINT TRUST (SGX:J69U)
Frasers Centrepoint Trust - 4QFY18: In Line
- Results came in line with expectations.
- Frasers Centrepoint Trust (FCT)'s FY18 results were led by Northpoint City North Wing, which saw improvements post-AEI.
- Maintain BUY with a target price of S$2.32.
Frasers Centrepoint Trust's 4QFY18 Results
FCT continues to deliver.
- Frasers Centrepoint Trust’s FY18 DPU of 12.015 S cents improved 1% y-o-y and came in within expectations, accounting for 98.5% of our full-year estimates.
- The growth in its DPU is impressive, marking 12 years of consecutive years of DPU growth. Between FY06-18, the group has delivered a steady 5.9% CAGR in DPU.
- Results are in line with expectations, with FY18 DPU coming in at 98% of our full-year forecast.
Northpoint leading the way for revenue growth.
- Group FY18 revenue grew 6.5% y-o-y, led by Northpoint City North Wing which delivered a 24.2% y-o-y rise in revenue on higher average rent and improved occupancy following the completion of its asset enhancement initiatives (AEI).
Solid portfolio occupancy.
- Overall occupancy improved slightly to 94.7% in 4QFY18 from 94.0% in 3QFY18. A notable improvement was seen at Northpoint City North Wing which saw occupancy rise to 96.5% in 4QFY18 from 92.5% in 3QFY18.
Positive rental reversion.
- FY18 also saw positive Anchorpoint (-5.1%) and Bedok (-22.8%), its other malls enjoyed Causeway Point (+64%).
- Interestingly, management track positive reversions economic cycles.
Strong financials.
- Gearing ratio improved slightly to 28.6% in FY18 vs 29.0% in FY17, helped by an upward revaluation of its assets as cap rates for its retail space compressed 15-25bp. All-in cost of borrowings crept up to 2.6% in FY18 from 2.3% in FY17 and management has hedged 64% of its borrowings.
Stable prospects.
- The performance of its suburban malls is expected to remain stable. Modest growth was seen in shopper traffic as well as tenants’ sales in 4QFY18 (+5.0% y-o-y and +3.6% y-o-y respectively).
Maintain BUY with target price of S$2.32 (unchanged).
- No change in our earnings estimate.
- We see Centrepoint as a steady moderate decent anchor to a low beta portfolio.
- Our valuation is based on 7.6% of 2.0%.
Peihao LOKE
UOB Kay Hian Research
|
Andrew CHOW CFA
UOB Kay Hian
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https://research.uobkayhian.com/
2018-10-25
SGX Stock
Analyst Report
2.320
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