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Brokers' take: Citi sees CICT as next-best proxy to office upcycle after Keppel Reit
CITI Research has started a 90-day " positive catalyst watch" on CapitaLand Integrated Commercial Trust (CICT) CapLand IntCom T: C38U +1% in view of a distribution-in-specie (DIS) overhang removal, as well as potential operational improvement in Q4 FY2021 and distribution per unit (DPU) accretive acquisitions.
In a report issued last Friday, analyst Brandon Lee noted how CICT has underperformed Singapore real estate investment trusts (Reits) since CapitaLand first announced its restructuring in March this year.
" With pure office proxy Keppel Reit Keppel Reit: K71U 0% also in the midst of a DIS corporate action by its sponsor, we see CICT as the next-best proxy to the ongoing office upcycle," said Mr Lee, opining that the worst is over for the office sector given a lower pace of office rental decline in Q4 of 2020 versus the previous quarter.
The analyst is anticipating a brighter outlook for the sector in 2022 due to stronger economic normalisation and healthy supply.
In particular, he thinks CapitaLand' s lower stake of 22.9 per cent in CICT post-DIS will " remove a major overhang" on the Reit' s unit price, and partially increase its weightage in major indices given greater free-float market capitalisation.
While he acknowledges that the existing retail and office operational climate is " not ideal" , at the unit price of S$2.00 he values CICT at 0.98 times price-to-book with a yield of 5.4 per cent and 6.1 per cent for FY2021 and FY2022, respectively.
This is compared to the trust' s mean of 1.09 times and respective yields of 5.4 per cent and 5.6 per cent for the estimated periods, as well as retail peers' 1.13 times mean and yields of 4.8 per cent and 5 per cent.
The analyst is also expecting CICT' s Q4 FY2021 financials to mirror that of the previous year in terms of retail traffic and sales, in view of school vacations, the holiday season, and largely-closed international borders along with a rising vaccination rate.
" While Covid infections have been rising since the easing of measures in Aug 2021 and the next few weeks will be crucial, we think that a plateauing of cases and rise in vaccination may bring back confidence in shoppers and workers returning to malls and offices, respectively," he said.
Mr Lee also expects CICT to explore further acquisitions more actively going forward, given how its operations have stabilised and its sponsor aims to expand its funds under management.
The Reit' s three-year assets under management (AUM) compound annual growth rate (CAGR) is estimated to come in at 2.1 per cent, with its last acquisition being in 3Q FY2019.
FY2020 DPU accretion has factored in three potential acquisitions at a 10 per cent valuation premium and 50-50 debt-to-equity funding within the sponsor' s pipeline.
According to the analyst, a potential sale of non-core assets such as One George Street and JCube mall will improve the trust' s gearing and net asset value.
" Medium-term growth engines could come from its sponsor' s sizeable (property) pipeline of S$5 billion and redevelopment and aged assets, while we think CICT is likelier to explore minor asset enhancement initiatives in the short term in light of occupancy preservation," he added.
Units of CICT last changed hands at S$2.02, up S$0.02 or 1 per cent, before Monday' s midday trading break.
What I know the correct actual rate is 0.15467 and not 0.155
so 10,300*0.15467= 1593.101
Round to 1593 :)
so 10,300*0.15467= 1593.101
Round to 1593 :)
kupo1234 ( Date: 20-Sep-2021 11:42) Posted:
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haha like scammer lor. next time i take 10 cent from all whole singapore. i have 600k leh..
Typographical error : should be negligible and not " neglibible" .
ROUTE66 ( Date: 20-Sep-2021 11:49) Posted:
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I got lesser too but it' s neglibible lah. Don' t worry too much, you' re not alone. Cheers !
kupo1234 ( Date: 20-Sep-2021 11:42) Posted:
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anyone check their CICT shares? it seems that i did not get mine correct.
i have 10300 * 0.155 = 1596.5 but in cdp only show 1593. why is it so ?
i have 10300 * 0.155 = 1596.5 but in cdp only show 1593. why is it so ?
Never say never. Anything can happen.
ridethestorm ( Date: 20-Sep-2021 11:32) Posted:
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Whatever lah. I just follow Temasek, they buy what I buy what, safer. For CLI, it' s a newly formed company, still don' t know what is Temasek' s take on CLI, so just hold the horses first until got a clearer picture.
des_khor ( Date: 20-Sep-2021 11:36) Posted:
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No la ... they are busy buying CLI and bust selling CICT .
whisng ( Date: 20-Sep-2021 11:32) Posted:
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Got chance lah. After the fools sold finish CLI, then they will come back and sell CICT. Is like a merry-go-round thingy...fools will always be fools and we can buy cheap stocks when the fools sell. Huat ah!!
ridethestorm ( Date: 20-Sep-2021 11:32) Posted:
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Maybe the fools were busy selling CLI, cause the total traded volume of CLI is 12 million now.
des_khor ( Date: 20-Sep-2021 11:19) Posted:
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no chance to add below $2
Adrianinsing ( Date: 19-Sep-2021 17:23) Posted:
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Not overly unexpected though because there' re many like-minded investors like us.
des_khor ( Date: 20-Sep-2021 11:19) Posted:
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Holding well ... market always react opposite way ...
using the appointed brokers by capitaland?
i am using dbsv, need to call them how to place the order
i am using dbsv, need to call them how to place the order
Adrianinsing ( Date: 19-Sep-2021 17:23) Posted:
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9 am Monday- bring it on !
Im ready to buy more below $2
Im ready to buy more below $2
Well said
whisng ( Date: 17-Sep-2021 14:53) Posted:
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There will be a very massive selling down on Monday.. Wait for a good entry point..
Hello Gurus,
I am new to CICT.
Understand that the dividend distribution for CICT is now bi-yearly and that the last issued dividend was SGD0.0518 per share for 1H2021.
Assuming that there is no significant setback in the covid situation in the period 2H2021, will the next coming dividend for 2H2021 be more or less the same as that of 1H2021 or it will be much lower?
The reason why I ask is I am not sure if CICT is giving out a larger portion of dividend first followed by a smaller portion next for this year.
I am new to CICT.
Understand that the dividend distribution for CICT is now bi-yearly and that the last issued dividend was SGD0.0518 per share for 1H2021.
Assuming that there is no significant setback in the covid situation in the period 2H2021, will the next coming dividend for 2H2021 be more or less the same as that of 1H2021 or it will be much lower?
The reason why I ask is I am not sure if CICT is giving out a larger portion of dividend first followed by a smaller portion next for this year.
seems like ppl are selling CICT. for me i will be looking to add on instead