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Ascendas India Trust Neutral
AINT.SI, AIT SP
1QFY12 : Area increase not yet translating to revenue
growth
1QFY12 results- AIT reported 1QFY12 DPU of S$0.0150/unit (flat
Q/Q) and implying an annualized yield of 6.3%. While 1Q net property
income improved by 7% Q/Q on lower operating expenses (4Q included
enhancement works); distributable income was stable Q/Q primarily due
to higher finance costs on newly completed buildings. Book value at
S$0.76/unit was down 4% Q/Q primarily on account of adverse FX.
Operating highlights– 1] Overall occupancy across AIT’s initial
portfolio (4.8msf) has remained stable at 96% levels; 2] Operational
portfolio has now increased to 6.4msf with completion of 0.5msf
building in ITPB in June. Overall AIT’s portfolio has grown to 6.4msf
from 4.8msf over the last two Qs; 3] Pre-leasing activity too has seen
decent momentum in newly completed buildings (1.7msf) with lease
commitments increasing to 68-76% (vs. 33-61% as of Mar end).
FY12/13 have 17-18% renewals implying low turnover risks; 4]
Conclusion of Phoenix Infocity acquisition in Hyderabad (0.4msf) has
not been completed pending regulatory approvals.
DPU growth from new completions 2Qs away – AIT has not seen any
income growth despite portfolio increasing by 1.7msf over the last two
Qs. This is because new completions are not yet contributing to income
[fit out/rent free stages] whereas operating and finance expenses are
being incurred on the enlarged portfolio. These should start contributing
2H onwards thereby offsetting the increase in expenses. As per company
release, 1QFY12 DPU would have been higher by 0.14 cents (9%)
excluding new completions (implying S$1.1M initial losses in 1Q).
Estimate and PT change– We revise down our FY12/13 estimates by
~15% as we 1] MTM our FX forecast (SGD:INR) to 36 (down 10%) and
2] Factor initial start up losses on new completions. Also reduce DCF
based Mar-12 PT to S$ 0.9 (based on COE of 13%). AIT’s FY13 yield of
7.7% does not compare favorably to Indian 10 year bond yield (post tax
basis). We would be more constructive on the stock closer to 1x P/B
levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ascendas India Trust Neutral
AINT.SI, AIT SP
1QFY12 : Area increase not yet translating to revenue
growth
1QFY12 results- AIT reported 1QFY12 DPU of S$0.0150/unit (flat
Q/Q) and implying an annualized yield of 6.3%. While 1Q net property
income improved by 7% Q/Q on lower operating expenses (4Q included
enhancement works); distributable income was stable Q/Q primarily due
to higher finance costs on newly completed buildings. Book value at
S$0.76/unit was down 4% Q/Q primarily on account of adverse FX.
Operating highlights– 1] Overall occupancy across AIT’s initial
portfolio (4.8msf) has remained stable at 96% levels; 2] Operational
portfolio has now increased to 6.4msf with completion of 0.5msf
building in ITPB in June. Overall AIT’s portfolio has grown to 6.4msf
from 4.8msf over the last two Qs; 3] Pre-leasing activity too has seen
decent momentum in newly completed buildings (1.7msf) with lease
commitments increasing to 68-76% (vs. 33-61% as of Mar end).
FY12/13 have 17-18% renewals implying low turnover risks; 4]
Conclusion of Phoenix Infocity acquisition in Hyderabad (0.4msf) has
not been completed pending regulatory approvals.
DPU growth from new completions 2Qs away – AIT has not seen any
income growth despite portfolio increasing by 1.7msf over the last two
Qs. This is because new completions are not yet contributing to income
[fit out/rent free stages] whereas operating and finance expenses are
being incurred on the enlarged portfolio. These should start contributing
2H onwards thereby offsetting the increase in expenses. As per company
release, 1QFY12 DPU would have been higher by 0.14 cents (9%)
excluding new completions (implying S$1.1M initial losses in 1Q).
Estimate and PT change– We revise down our FY12/13 estimates by
~15% as we 1] MTM our FX forecast (SGD:INR) to 36 (down 10%) and
2] Factor initial start up losses on new completions. Also reduce DCF
based Mar-12 PT to S$ 0.9 (based on COE of 13%). AIT’s FY13 yield of
7.7% does not compare favorably to Indian 10 year bond yield (post tax
basis). We would be more constructive on the stock closer to 1x P/B
levels.
