Soilbuild Business Space REIT reported 4Q13 DPU of 1.5Scts, beats forecast by 3.4%. Growth momentum is expected to continue into 2014. Looking ahead, growth in FY14 will be driven by organic rental improvements. With 17% of NLA to be renewed in 2014, we expect reversions to remain positive, Maintain BUY, target price S$0.87. At current prices, SBREIT offers dividend yields of 7.9-8.5%, which is one of the highest among industrial SREITs in our coverage.
Underlying operations for Ascendas India Trust continue to strengthen. Distributable income increased by 3% y-o-y to INR554m. Due to the appreciation of the SGD against the INR, distributable income after retention came in 8% lower yo- y to S$10.0m, resulting in DPU of 1.10 Scts (-9% y-o-y). Operating outlook stable; Aviator, a c.600k-sqft (representing c.8% of the portfolio’s NLA) Development is expected to lead earnings growth. Maintain HOLD, TP S$0.73. The expected weakness of the INR against SGD is likely to cap re-rating opportunities in the near term.
4Q13 results for CapitaCommercial Trust in line. DPU of
2.09 Scts was declared. The portfolio valuation is stable while gearing is conservative. Looking ahead, the manager has renewed half of the leases expiring in 2014, while the remaining will expire in 2H14 at an average rate of S$10.30. The manager is confident of achieving positive rental reversions in view of an improving demand for office space. Maintain HOLD, revised TP S$1.52 (Prev S$ 1.46).
Tiger Airways Holdings reported disappointing core loss of S$30m in 3QFY14; Exceptional losses from impairment of investment in associates, as well as loss on disposal of its 40% stake in Tigerair Philippines to Cebu Pacific compound poor operating performance. Weak load factors and sub-par yields may continue to impact Tigerair Singapore amid heightened competition. Associates continue to bleed; may be a while before recent strategic initiatives make a difference. In view of yield pressures at Tigerair Singapore and slower-than-expected improvements at key associates, we push up our loss estimates for FY14/FY15 from S$80m/S$22m to S$124m/S$53m. Maintain FULLY VALUED call with lower TP of S$0.44 (Prev S$ 0.47).
Ezra Holdings announced that its Subsea Services division (EMAS AMC) been awarded projects worth a total of approximately US$80m, including options. Work for a majority of the contracts is expected to commence by the first half of 2014.
Bumitama Agri FY13 production data was slightly below our expectations. Own output is slightly below our expectations; as the yield drop at the start of its low crop cycle was steeper than usual. It seems the group had purchased more outside FFB than expected to cover for the shortfall. Based on this data, Jan-Feb output may remain lower than normal and we expect faster recovery in 2H14. We also expect 4Q13 earnings to lag our expectations; due to lower yields and higher FFB purchases. The steep Rupiah depreciation in 4Q13 may probably not have much impact, as topline growth is also boosted by USD-linked cost. We are reviewing our forecasts for slight downside adjustment to 4Q13 earnings.
Blumont proposes acquisition of highly prospective goldsilver- copper project in Macedonia through takeover bid for Genesis. Takeover bid to acquire ASX-listed Genesis is at an implied bid price of A$0.169 per share. Genesis has the conditional right to a majority stake in the Plavica goldsilver- copper project in Macedonia, with a JORC Inferred Resource of 1.86 million ounces of gold at an average grade of 1.0 gram per tonne. The proposed acquisition reaffirms Blumont’s commitment to becoming Asia’s major diversified natural resources company.
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