Lippo Malls Indonesia Retail Trust - CGS-CIMB Research 2020-02-21: Stable Q-o-q

LIPPO MALLS INDO RETAIL TRUST (SGX:D5IU) | SGinvestors.io LIPPO MALLS INDO RETAIL TRUST (SGX:D5IU)

Lippo Malls Indonesia Retail Trust - Stable Q-o-q

  • Lippo Malls Indonesia Retail Trust (SGX:D5IU)'s 4Q/FY19 DPU of 0.52/2.23 Scts was in line with our projections.
  • 4Q19 portfolio average positive rental reversion was 4.4%.
  • Reiterate HOLD with a lower DDM-based Target Price of S$0.24.



4Q19 results summary

  • Lippo Malls Indonesia Retail Trust (SGX:D5IU) reported a 9.2% y-o-y rise in 4Q19 gross revenue to S$69.6m, thanks to positive rental reversion and a stronger rupiah vs. S$. 4Q19 distribution income of S$15.1m and DPU of 0.52 Scts were 74% and 66.7% higher y-o-y, respectively, due largely to lower property operating expenses through more cost-efficient management, and lower allowance for doubtful debts as well as higher non-cash adjustments items.
  • Lippo Malls Indonesia Retail Trust's FY19 DPU of 2.23 Scts is broadly in line with our expectations at 101.4% of our forecast.


High portfolio occupancy, positive rental reversion

  • Portfolio occupancy slipped 1.4% pts y-o-y to 91.5% at end-4Q19. In FY19, Lippo Malls Indonesia Retail Trust benefited from an average 4.4% positive rental reversion while NPI margin averaged 64.5%.
  • Lippo Malls Indonesia Retail Trust has 21.63% of leases to be re-contracted in FY20F, and 7.7% in FY21F. In FY19, revenue from related party tenants accounted for 24.1% of gross revenue; non-related party tenants comprising international and local brands made up 63.5%. This helped to diversify the trust’s rental income source.
  • In Dec 2019, Lippo Malls Indonesia Retail Trust had announced the divestment of Binjai Supermall and Pajetan Village for a total of S$130.9m. The divestment proceeds will help to enhance the group’s financial flexibility, in our view.


End-4Q19 gearing at 35.9%

  • The trust posted a 3.4% depreciation in portfolio value in rupiah terms in FY19. As a result, its book value slipped to S$0.28/unit and gearing rose to 35.9% as at end-4Q19.
  • Lippo Malls Indonesia Retail Trust has 10% and 24% of its total debt maturing in FY20F and FY21F, respectively. As at end-4Q19, average interest cost stood at 6.14%.


Maintain HOLD






LOCK Mun Yee CGS-CIMB Research | EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2020-02-21
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.24 DOWN 0.27



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