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Sasseur REIT - Maybank Kim Eng 2021-11-15: Short-Term China Headwinds

SASSEUR REIT (SGX:CRPU) | SGinvestors.io SASSEUR REIT (SGX:CRPU)

Sasseur REIT - Short-Term China Headwinds


Slow quarter, better fundamentals in FY22E

  • Sasseur REIT (SGX:CRPU)’s 3Q21 DPU rose 3.8% y-o-y/13.4% q-o-q, with 2.0% y-o-y/3.9% q-o-q growth in its entrusted management agreement rental income. Sales from Jul were dampened by movement restrictions following intermittent COVID outbreaks, and exacerbated by atypical warm weather during its Sep anniversary events, but occupancies improved on the back of AEIs and tenant remixing efforts, and look set to strengthen in 2022.
  • We maintain DPUs and our DDM-based target price (COE: 9.8%, LTG: 3.0%) for Sasseur REIT.
  • Catalysts are better-than-expected sales growth and DPU upside from potential acquisitions, backed by a strong balance sheet and visible sponsor pipeline.



Portfolio sales fell ~10.3% y-o-y

  • Portfolio sales rose 12.0% q-o-q in 3Q21 due to seasonality, but fell 10.3% y-o-y, as pandemic measures checked shopper traffic and higher temperatures curbed buying sentiment. The Chongqing Liangjiang Outlet performed better, with sales at +15.7% q-o-q/-8.2% y-o-y, contributing ~55%/c.52% of 3Q/9M21 sales. Contribution from fashion, sports and international brands increased to 62.3% and 76.4% of its portfolio NLA and revenue (from 59.3% and 75.1% respectively in 2Q21).
  • Closed borders will continue to spur domestic demand, and management remains optimistic on sales in 4Q, although we expect y-o-y comparables are likely to be softer at -5-10%.


AEIs bolstering occupancies and rents

  • Sasseur REIT's portfolio with a new gym operator lease signed at ~20% higher rents.


Readying balance sheet for deals






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-11-15
SGX Stock Analyst Report BUY MAINTAIN BUY 1.050 SAME 1.050



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