Company News

Viva Industrial Trust’s FY14 results were in line with IPO forecasts, with net property income at S$11.0m and DPS of 6.83 S-cents.

Ascendas India Trust saw a dip of 1% YoY in net property income to INR905 but a 6% YoY increase in DPU of 1.16 S-cents for 3QFY15.

CapitaLand’s Ascott has secured contracts to manage three more properties in Beijing and Hong Kong, thus reinforcing its growth in China.

Dragon Group entered into a placement agreement with Asian Green Technology, whom will subscribe for 27.8m shares at S$0.09/share. S$2.5m of gross proceeds will be raised.

Sincap Group announced that UOB Kay Hian will undertake a placement of 351m new ordinary shares at S$0.10/share, raising S$35.1m in proceeds to fund Sincap's acquisition of LTN Land.

Parkway Life REIT's DPU for 4QFY14 rose 2.9% YoY to 2.9 S-cents, driven by acquisitions and rental growth of existing properties. FY14 DPU rose 7.1% YoY to 11.52 S-cents.

CitySpring Infrastructure Trust posted a DPU of 0.82 S-cents for 3QFY15, while revenue fell 7.3% YoY to S$120m. The trust also had cash losses of S$13.5m, hurt by the Hydro Tasmania dispute settlement amount.

Dukang Distillers Holdings expects overall earnings to be significantly lower for its 2QFY15 results as compared to 2QFY14.

ZICO holdings entered into a binding term sheet with June Song to acquire the entire stake of share registrar business B.A.C.S. Private Limited for S$8.6m.

Tritech Group announced that a reputable international financial institution expressed interest in potentially committing up to USD 3b over the next five years for their water and environment projects.

Parkway Life REIT selling pressure

Bearish break suggests more downside ahead

Key supports breached.
Parkway Life REIT could face further selling pressure after failing to overcome its 1.5-year downtrend resistance recently; this was followed by a strong bearish break of both its 5-year uptrend support and $2.35 key support on heavy volume yesterday.

Indicator is bearish. The MACD has just initiated a sharp bearish crossover right below its centerline, suggesting that the downside momentum is accelerating.

Target price at $2.15. The counter could possibly slide towards the next key base at $2.15 (key resistance-turned-support) in the weeks ahead.

Stop loss level at $2.40. Meanwhile, we advocate a stop-loss exit for short sellers around $2.40, which is slightly above the newly established support-turned-resistance of $2.35.

Parkway Life REIT - Stable DPU Growth Expected

REIT’s 4Q13 DPU was within expectation. NPI growth was flat at +3.4% y-o-y, as the depreciating JPY offset the higher rental income from its Singapore properties and acquisitions during 2013. PREIT’s ongoing asset enhancement initiatives (AEI) will support rental growth as it faces competition in making acquisitions. We introduce our FY15 estimates and arrive at a DDM-based TP of SGD2.39.

Yen depreciation a drag on net property income (NPI) growth. PREIT’s 4Q13 NPI rose 3.4% y-o-y to SGD23.2m despite higher rental income from its Singapore properties and contribution from its acquisitions during 2H13. NPI from its Singapore properties was 4.9% higher y-o-y during the quarter, while that from its Japanese properties inched up 1.2% y-o-y even though it has added new assets to its Japan portfolio. Management attributed this to the y-o-y depreciation in the JPY. On the whole, the company’s yield accretive acquisitions in Japan boosted its DPU growth 4.5% higher y-o-y in 4Q13.

AEIs to support growth. Asset enhancements will drive growth as

PLife on track to meet FY13F earnings

Highlights
2Q DPU of 2.63 Scts within expectations. PREIT registered DPU growth of 6% in 2Q13 to 2.63 Scts. Gross revenue and net property income fell by 3.5% and 1.5% y-o-y, respectively, due to the impact of a weaker JPY. This was partially offset by contributions from Japanese and Malaysian properties acquired in 2012 as well as higher rentals from its Singapore hospitals which grew by 6.3%. 1H DPU forms c.49% of our full year estimates.

Hedges in place to counter impact of a weaker JPY. Given the weaker JPY, PREIT has extended its Japan net income hedge till 1Q17, and hence the weaker JPY would be offset by a foreign exchange gain. This should provide stability for unitholders.

Our View
On track to meet FY13F earnings. We believe PREIT is on track to meet our FY13F earnings, as we expect rentals for its Singapore hospitals to rise 4.44% from its 7th year of lease starting on 23 Aug’13, based on the CPI+1% formula. Income will be further enhanced by contribution from its recent acquisition of 2 nursing homes in Japan for S$23.1m at a NPI yield of