DBSVickers Report - 25 Jan 2008

Ascendas India Trust: Growing Strongly
Buy S$1.04
Price Target : S$ 1.84

A-iTrust reported a strong set of 3Q08 results. Gross revenue was up 60% yoy and 7% qoq to S$27.0m. The strong performance was attributable to strong rental renewals at 91% above preceding rates and completion of 2 buildings, Vega at V and Crest at ITPC which added 1.1m sf to portfolio. Net profit was up >100% to S$33.2m mainly due to revaluation gain of S$28.1m (net of deferred tax) on its Vega property.

Revaluation gain. More revaluation gains are expected in the pipeline in 4Q08 when the Crest obtains the necessary certification.

Gearing at a low 4%, giving the trust ample borrowing capacity of S$550m for acquisitions up to management’s imposed limit of 60% gearing.

CapitaCommercial Trust : Strong organic growth at a discount
Buy S$1.91 Price
Target : S$ 2.97

CCT reported FY07 results in line with estimates. Revenue and NPI grew by 54.2% and 51.7% y-o-y to S$240.1m and S$174.0m respectively.

DPU was 8.7 cents growing by 18.7% y-o-y, translating to 4.6% yield. 4Q07 DPU came in at 2.33 cents. Revaluation gains of a further S$575.6m in 4Q07 accumulating to S$1.3bn for FY07 (portfolio valued at 4-4.5% cap rate) lowers CCT’s gearing to 24%.

This could provide CCT with more headroom for debt funding compared to equity currently for AUM growth. Net interest cover remains reasonable at 3.3x, and average cost of debt at 3.9%.

Mapletree Logistics: Leading Pan Asian Logistics player
Buy S$0.90 Price
Target : S$ 1.42 (Prev S$ 1.6)

Mapletree Logistics Trust (MLT) reported FY07 results within expectations. Distributable income increased 76% yoy to S$141.7m and DPU posted a growth of 30% y-o-y to 6.57 cents. This is mainly attributable to contributions from its acquisitions that resulted from a larger property portfolio. (70 properties as at 31 Dec '07 vs 41 properties in 31st Dec'06).

Rights issue postponed. This may result in limited acquisition growth in the near term due to its current gearing level of 53.4%. Debt-funded acquisitions is limited to a further S$405m out of which S$241m has been committed.

However, management has indicated that their immediate term target for DPU growth is through yield optimization from AEIs and positive rental reversions.

MobileOne: Dividends cannot compensate for weak business model
Hold S$1.92
Price Target : S$ 2.20 (Previous S$2.30)

Net profit of S$37.9m was down 5% y-o-y and 6% below consensus and our expectations. The company announced final dividend of 8.3 cents per share, which is slightly below our expectations of 10 cents per share.

EBITDA margin down at 36.9% from 40.9% year earlier. Despite lower handset sales, margins were lower than our expectations due to
(1) higher traffic expenses from IDD promotions and
(2) higher leased circuit costs due to more data usage from 3.5G wireless broadband.

Market share loss. Quite noticeable was market share loss in prepaid mobile to 26.1% from 27.5% in 3Q07 and in post-paid mobile to 28.5% from 28.9% in 3Q07.