S & P Results Review & Earnings Outlook
Hektar REIT’s 1Q10 results were within our expectations. Hektar REIT posted a 10% YoY increase in net profit to MYR10.0 mln on the back of a 5.7% YoY rise in turnover to MYR23.0 mln. The rise in revenue was due mainly to higher occupancy of 97.3% in 1Q10 vs. 95.9% in 1Q09.
Overall, on a quarterly basis, portfolio average occupancy rate has improved to 97.3% in 1Q10 from 95.8% in 4Q09. Wetex Parade in Muar, Johor posted a higher occupancy rate of 91.2% vs. 90.1% in 4Q09 while Subang Parade’s occupancy rate was unchanged at 100%. Mahkota Parade in Melaka also saw a rise in occupancy rate to
96.8% from 93.6% in 4Q09.
However, Hektar REIT posted an average 7% decline in rental reversions, due mainly to a 16% negative rental reversion in Mahkota Parade, which was undergoing a refurbishment exercise that has just been completed in April 2010. Wetex Parade posted a positive rental reversion of 6% while Subang Parade has flat rental reversion.
Hektar REIT declared a first interim 1Q10 dividend of 2.5 sen vs 2.4sen in 1Q09.
Recommendation & Investment Risks
We maintain both our Buy recommendation and 12-month target price of MYR1.40. Hektar REIT’s unit price is well supported by its high dividend yield.
Our 12-month target price of MYR1.40 was derived by applying a 9% (unchanged) discount to our DDM valuation. The primary assumptions behind our DDM valuation are a cost of equity of 8.30% - 9.50% and DPU growth of 0%-3%.
At the current level, Hektar REIT offers an attractive dividend yield of 8.3%. Moreover, suburban neighborhood retail properties normally enjoy more stable occupancy and rental income than other types of commercial properties such as offices and urban retail properties.
Risks to our recommendation and target price are: (i) a sharp and prolonged economic slowdown in Malaysia; and (ii) an unexpected rise in interest rates, which will have a negative impact on the occupancy, rental income and market value of retail properties.
美元的流通性,太強了!
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假设一粒蛋价格RM0.10,如果你要得到1美元,那就要有48粒蛋去换。如果美国价格一粒蛋1元,你要买它的蛋国家銀行要印4.8張一元鈔票。这就是你家母鸡要比人家更努力生蛋,48天工作生蛋,美国母鸡只需生一天鸡蛋就可以得到4.8元馬币。可怕嗎?可怜嗎?
在财经新闻上,人们时常会听到美元和石油掛勾,美国隨时可以印鈔票...
11 hours ago
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