FRASERS CENTREPOINT TRUST | OUTPERFORM
JULY 25 CLOSE: $2.14
TARGET PRICE: $2.28
OCBC Investment Research, July 25
Frasers Centrepoint Trust (FCT) reported an in-line set of Q3 FY17 results. Gross revenue fell 3.3 per cent year on year to $43.6 million due to the ongoing AEI at Northpoint.
Distribution per unit (DPU) declined 1.3 per cent year on year to three cents.
FCT's portfolio occupancy held firm at 87.1 per cent (-0.1 percentage point quarter on quarter) as at June 30, and we expect improvement in the occupancy of Northpoint and Changi City Point ahead.
The year-on-year dip was moderate when compared to the preceding quarter. Excluding Northpoint, FCT's shopper traffic grew 3.7 per cent year on year, while tenants' sales fell 3.3 per cent year on year.
Rental reversions for Q3 FY17 came in at 0.4 per cent due to the drag from Bedok Point (-30.2 per cent). Excluding Bedok Point, portfolio rental reversion was 5.4 per cent.
We update our model to incorporate more conservative occupancy and rental assumptions, but with lowered borrowing cost forecasts, our DPU projections remain largely intact.
LIAN BENG | BUY
JULY 25 CLOSE: $0.63
TARGET PRICE: $0.70
UOB Kay Hian, July 25
Retracements have been shallow and stopped short of breaking below the rising 50-day EMA (exponential moving average) thrice.
The stock may stage a breakout. Themoving average convergence/divergence indicator has hooked up.
The breakout at $0.65 will improve the odds of the stock heading up towards the tweezer top at $0.695 (Nov 3, 2014). Protective stops could be placed within the vicinity of the rising 50-day EMA at the moment.
Approximate timeframe on average: two weeks.
CSE GLOBAL | REDUCE
JULY 25 CLOSE: $0.42
TARGET PRICE: $0.39
CIMB Research, July 24
In light of the negative news and the possibility that large contract flows could be muted, we lower our price-to-earnings (P/E) ratio base to 10 times FY18F P/E (one standard deviation below the five-year mean versus 12 times, previously).
Upside risks are higher-than- expected contract wins and margins while a further downside risk is if CSE Global cuts forward dividend per share.
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