S-REITs Weekly - UOB Kay Hian 2020-05-19: Second Week Of Consolidation With S-REITs Easing 2.2%

S-REITs Weekly - UOB Kay Hian | SGinvestors.io SASSEUR REIT (SGX:CRPU)

S-REITs Weekly - Second Week Of Consolidation With S-REITs Easing 2.2%




S-REITS - WHAT HAPPENED LAST WEEK



SPOTLIGHT – SASSEUR REIT (SGX:CRPU)

  • Sasseur REIT kept its payout ratio at 100% and did not retain cash. Its unique EMA rental model provides income stability. Fixed component income increased 3.9% y-o-y to Rmb102.4m and accounted for 80.5% of total EMA rental income in 1Q20, cushioning Sasseur REIT from the negative impact of temporary closures of Sasseur REIT’s four outlet malls over a period of 44-49 days (48-54% of the total operating days).
  • Portfolio occupancy remained stable at 94.8% (-1.2ppt q-o-q), demonstrating the positive partnership between the tenants and entrusted managers of each outlet mall.
  • Four outlet malls re-opened in mid-March. Reopening of businesses is a top priority for the Chinese government in order to get the economy back on its feet. Chongqing and Bishan outlet malls were both re-opened on 15 March while Kunming and Hefei were re-opened earlier on 11 March and 13 March respectively. Sasseur REIT will benefit as consumers return with renewed fervour.
  • Maintain BUY with higher target price of S$0.96, based on DDM (required rate of return: 8.5%, terminal growth: 1.5%). Sasseur REIT trades at attractive 2021 distribution yield of 9.0% and P/NAV of 0.79x.





Jonathan KOH CFA UOB Kay Hian Research | Peihao LOKE UOB Kay Hian | https://research.uobkayhian.com/ 2020-05-19
SGX Stock Analyst Report BUY MAINTAIN BUY 0.96 SAME 0.96



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