CMMT (5180) - CapitaMalls Malaysia Trust - Challenging 2015 expected
Target RM1.40 (Stock Rating: HOLD)
CMMT's 4Q14 core net profit of RM39.2m brought its full-year FY14 earnings to RM149.7m. This is in line with expectations, accounting for 96.3% of our full-year forecast. Overall for FY14, earnings grew by only 0.9% on the back of 3.4% revenue growth due to higher expenses. We make no changes to our FY15-16 earnings forecasts and introduce our FY17 numbers. Our DDM-based target price is unchanged at RM1.46. We see little in terms of re-rating catalysts for CMMT's stock in the next six months. We, thus, maintain our Hold call on the stock.
4Q14 DPU of 2.26 sen
CMMT announced a DPU of 2.26 sen for the 4Q14, which brings its full-year FY14 DPU to 8.91 sen, in line with our estimate of 9 sen for the full year. Yoy DPU growth was flattish due to modest earnings growth for the year.
FY14 results review
For the full year of FY14, CMMT's revenues rose by 3.4% yoy, driven by growth across its portfolio, with the exception of Sg. Wang Plaza, which saw its revenues decline by 6.9%. Despite Sg. Wang's lower revenue, the additional contribution from the completion of East Coast Mall's asset enhancement initiative (AEI) and the positive rental reversions undertaken throughout 2014 managed to buffer the losses. Property operating expenses during the year rose by 10.4% due to the increase in property assessment fees and the electricity tariff hike in the beginning of 2014. As such, net property income was flat for FY14. The flattish net property income flowed down to CMMT's net profit.
A challenging 2015 expected
During the results conference call which was chaired by CEO, Ms. Low Peck Chen, for which approximately 10-15 analysts dialled in, the management of CMMT warned us that 2015 could be a challenging year in terms of consumer spending in light of the upcoming GST implementation. While it remains confident about the quality of its malls as it considers its malls as "necessity malls", CMMT highlighted that the economic conditions right now could further weigh on consumer spending. One positive factor for 2015 is that there will likely be no power tariff hike during the year, which will mean less pressure on CMMT's property operating expenses.
Source: CIMB Daybreak - 21 January 2015
Target RM1.40 (Stock Rating: HOLD)
CMMT's 4Q14 core net profit of RM39.2m brought its full-year FY14 earnings to RM149.7m. This is in line with expectations, accounting for 96.3% of our full-year forecast. Overall for FY14, earnings grew by only 0.9% on the back of 3.4% revenue growth due to higher expenses. We make no changes to our FY15-16 earnings forecasts and introduce our FY17 numbers. Our DDM-based target price is unchanged at RM1.46. We see little in terms of re-rating catalysts for CMMT's stock in the next six months. We, thus, maintain our Hold call on the stock.
4Q14 DPU of 2.26 sen
CMMT announced a DPU of 2.26 sen for the 4Q14, which brings its full-year FY14 DPU to 8.91 sen, in line with our estimate of 9 sen for the full year. Yoy DPU growth was flattish due to modest earnings growth for the year.
FY14 results review
For the full year of FY14, CMMT's revenues rose by 3.4% yoy, driven by growth across its portfolio, with the exception of Sg. Wang Plaza, which saw its revenues decline by 6.9%. Despite Sg. Wang's lower revenue, the additional contribution from the completion of East Coast Mall's asset enhancement initiative (AEI) and the positive rental reversions undertaken throughout 2014 managed to buffer the losses. Property operating expenses during the year rose by 10.4% due to the increase in property assessment fees and the electricity tariff hike in the beginning of 2014. As such, net property income was flat for FY14. The flattish net property income flowed down to CMMT's net profit.
A challenging 2015 expected
During the results conference call which was chaired by CEO, Ms. Low Peck Chen, for which approximately 10-15 analysts dialled in, the management of CMMT warned us that 2015 could be a challenging year in terms of consumer spending in light of the upcoming GST implementation. While it remains confident about the quality of its malls as it considers its malls as "necessity malls", CMMT highlighted that the economic conditions right now could further weigh on consumer spending. One positive factor for 2015 is that there will likely be no power tariff hike during the year, which will mean less pressure on CMMT's property operating expenses.
Source: CIMB Daybreak - 21 January 2015
