Wednesday, October 30, 2013

CapitaMalls Asia - Gradual growth on track

The positives 
3Q13 operations continued to improve. In China, shopper traffic and tenant sales were up 1.5% and 9.8% (on a psm basis) yoy respectively, backing a 12% yoy increase in same-mall NPI. CMA also continued to lift yields from its operational malls, with yield on cost for malls opened before 2012 up 6-24% yoy. Portfolio yield on cost stayed in the 12% range and is expected to improve further, assuming no new acquisitions. In 3Q13, CMA opened CapitaMall Jinniu in Chengdu, China with an occupancy rate of over 90%. In Singapore, shopper traffic and tenant sales growth was stable at 3.2-3.6% yoy. Bedok Mall is now 100% preleased with Westgate at 85% (75% in 2Q13). Both are expected to open in 4Q13.   
The (slight) negatives 
Lower management fees due to the opening of fewer malls led to a 10% yoy decline in 3Q13 revenue, while high admin expenses affected its bottom line (flat yoy). Operating costs should normalise gradually as China malls mature. China’s tenant sales growth, while up, has moderated from last year’s levels. We expect this trend to persist, though still expecting healthy 8-10% growth in FY14-15.   
We expect new malls in Singapore and higher property yields in China to power its earnings in the next 12-15 months. CMA expects CapitaMall Jinniu to generate a c.7% NPI yield after its first year, which would be a stark improvement to the 4-5% achieved for new malls in 2011-12.

Monday, October 28, 2013

Suntec REIT - Post-results luncheon feedback

What Happened 
We hosted a post-results investor luncheon with SUN. Several main issues discussed include: 1) Suntec City’s Phase 2 AEI and its progress; 2) its plans in the repositioning of the Suntec City Mall; 3) Suntec’s office occupancy and room for the possibility of further positive rental reversions and 4) its plans to conduct further acquisitions amid a compressed cap rate market.   
What We Think 
The discussion reaffirms our belief that although Phase 2 of the AEI is on track to be completed by 4Q13, Phase 2 areas could potentially command less than its guided S$12.59 psf/month as 40-45% of the total NLA in Phase 2 is taken up by anchor tenants. In Phase 1, the general trade occupancy currently varies between a healthy 16% and 18%. Although Suntec City is still largely a ‘weekday mall’ that is highly dependent on the office crowd, with the completion of Phase 2, anchor tenants such as Golden Village and Toys ‘r’ Us are expected to draw crowds from both the family and young adult segments which could potentially boost weekend traffic. Suntec’s office is currently generating positive rental reversions with 3Q13 at S$8.55 psf/mth (+1.5% qoq). With FY14 expiring leases at below S$8.55 psf/mth, management indicated its confidence in recording a positive rental reversion. Given the challenging acquisition environment in Singapore, we expect SUN to consider seeking acquisitions overseas. Timely of this prospect is still unclear and is unlikely to drive SUN’s share price in the near-mid term, in our view.   
What You Should Do 
SUN remains our top pick within the SREIT space. Maintain Outperform. 

Thursday, October 24, 2013

Sheng Siong Group - Chugging along nicely

A solid set of results, with earnings growth led by contributions from new stores and margin expansion. The decline in comparable store sales looks worrying but is largely due to temporary factors. 3Q13 core earnings is in line and forms 27% of our and consensus full-year estimates, while 9M13 forms 74%. We tweak our estimates as a result of housekeeping. There is no change to our target price, which is still based on 23x CY14 P/E (10% discount to Dairy Farm). Catalysts are to come from earnings delivery led by new stores and margin expansion. We maintain our Outperform rating.
3Q highlights 
Core earnings 8% growth yoy were driven by contributions from new stores (up S$12.6m) and expanding margins. EBIT margins crossed the 7% mark for the first time since IPO, led by another quarter of high gross margins of 23.2% due to cost savings from Mandai Distribution Centre and tight cost control. However, full-year EBIT margin is likely to be a high 6% because of next quarter’s payout of year-end bonuses and the booking of S$0.9m of inventory writeoffs. We are not worried by the decline in mature store sales of S$4.5m as a large part is due to construction work at Bedok and The Verge stores. These stores contributed S$3.5m of the decline. This temporary inconvenience should be more than compensated by increased footfalls when construction of the multi-storey carpark and MRT are completed, respectively.  
No new stores 
Although no new stores have been announced so far this year, we think that the earnings contribution from the 11 new stores opened after the IPO has room to grow given that peak sales usually occur in the third year.  
Maintain Outperform 
Share price has fallen 15% since its Jul high, and is undemanding at 19x CY14 P/E vs. the peer average of 22x. Valuations are further supported by a 4.8% CY14 dividend yield.

Thursday, October 10, 2013

Zone Pro Site: The Moveable Feast <总铺师:移动大厨> SG Promo Tour

Date: 12 October 2013 (Saturday)
Time: 5pm
Venue: Bugis Junction, Bugis Square Lvl 1 (Nearest MRT station: Bugis)
  • Director Chen Yu-Hsun (陈玉勋)
  • Producer Lee Lieh (李烈)
  • Yo Yang (杨佑宁)
  • Lin Mei-Hsiu (林美秀)

Monday, October 07, 2013

Meet The Cast of 'Rhythm Of The Rain' (听见下雨的声音)

Rhythm of the Rain Meet-The-Fans 
Date: 8 October (Tuesday)
Time: 8pm
Venue: JCube (Nearest MRT Station: Jurong East)

Rhythm of the Rain Gala Premiere
Date: 8 October (Tuesday)
Time: 9.15
Venue: JCube (Nearest MRT Station: Jurong East)

Taiwanese actors such as Alan Kuo (柯有倫), Vivian Hsu (徐若瑄), Han Yu Jie (韓雨潔), Wei Ru Yun (魏如昀) and director Vincent Fang (方文山)! 

Thursday, October 03, 2013

Planning for Retirement in your 30’s

If you’re in your 30s, serious planning for retirement begins now. Odds are you have never taken a close look at your earning potential and long-term needs, or thought much about all the savings and credit options before you. Now is the time to get real about such things because your life is changing in ways that you may only be beginning to appreciate.
When you’re in your 30s, you are in a unique position from a retirement planning standpoint. For most of us, these are the “make or break” years. Here’s why.
It’s certainly understandable how individuals in their 20s are too busy with distractions in their lives to think about retirement. It’s so far away, and really not on their radar screen. But most 30-somethings have settled-down a bit. Perhaps you’re even married and have started a family.
The point here is that by the time you’ve reached age 35, most of us know exactly what we want out of life. We know where we want to live, and we have pretty solid ideas about our career goals. You’ve also been working for more than ten years, and you have come to realize that retirement is not too far away.
So what exactly is so special about being in your 30s when it comes to retirement planning? The unique opportunity you have is simply this: You should have a good understanding of what it takes to make all your monthly payments by now. And with nearly 30 years to save for retirement, you still have time on your side.
Remember, retirement plans made after your 30s need to be much more aggressive than those made while you’re still in your 30s. But you have to start early to save more. Capitalise on the compounding effect of interest!
Here’s a good illustration of how much will you probably need for your retirement!
So besides starting early for retirement planning and taking advantage of the compounding effect to make your money grow, you should invest right. You need to diversify your investment to grow your retirement nest egg.
As you pass through various phases in life, different needs take priority at different stages. Retirement may seem too far away for young singles. There are immediate needs such as building your career and buying a car. By your thirties, you might have bought a house, gotten married and started your own family. As you approach 40, commitments like caring for parents, children and paying off mortgage loans further delay your retirement planning.
Whatever your life’s concerns, retirement will be upon us one day. Rather than meet it unprepared, take the first step now to ensure a financially secure retirement!