IGBREIT (5227) - IGB REIT - Good year for IGB REIT
Target RM1.35 (Stock Rating: HOLD)
IGB REIT's 4Q14 core net profit of RM60.1m brought its full-year FY14 core net profit to RM232.6m. This is in line with our estimates, accounting for 101% of both our and consensus full-year estimates. Core net profit grew by 12.4% on the back of a 7.2% revenue growth. We make no changes to our FY15-16 earnings forecasts, while we introduce our FY17 estimates. Our DDM-based target price of RM1.35 remains unchanged, as is as our Hold call on the stock. For exposure to M-REITs, we prefer Axis REIT instead.
4Q DPU of 1.89 sen
IGB REIT declared a DPU of 1.89 sen for 4Q14, which brings its YTD total DPU to 7.8 sen. This is slightly above our estimates as it accounts for 102% of our full-year DPU forecast of 7.6 sen.
4Q14 results review
For the 4Q14, IGB REIT's revenue grew by 4.6% yoy, mainly driven by higher rental income during the period underpinned by the various rental reversions undertaken during the year. IGB REIT's net property income (NPI) grew by 5.5% yoy to RM76.4m as IGB REIT's overall property expenses were mainly flat. No revaluation gains were recorded in the 4Q14 as it was done in 3Q14. This resulted in PBT during the quarter falling by 64% as the FY13 saw revaluation gains reflected in the 4Q. Stripping out the revaluation gains, core net profit grew by 5.9% yoy as interest expenses remained stable. After accounting for non-cash adjustments of RM9m, IGB REIT's distributable income grew by 6% yoy. Full-year core net profit grew by 12.4% on the back of a 7.2% yoy revenue growth.
Strong balance sheet but no targets
We believe there are no exciting catalysts that could boost earnings further in the medium-term given the lack of asset injections in the foreseeable future. While the acquisition outlook remains uncertain, we note that IGB REIT's balance sheet remains healthy as gross gearing and net gearing stood at 0.33x and 0.27x, respectively, as at end-FY14. Although acquisitions are a challenge currently due to the status quo between buyer and seller, we believe that IGB REIT's balance sheet is well prepared for any potential acquisitions.
Source: CIMB Daybreak - 28 January 2015
Target RM1.35 (Stock Rating: HOLD)
IGB REIT's 4Q14 core net profit of RM60.1m brought its full-year FY14 core net profit to RM232.6m. This is in line with our estimates, accounting for 101% of both our and consensus full-year estimates. Core net profit grew by 12.4% on the back of a 7.2% revenue growth. We make no changes to our FY15-16 earnings forecasts, while we introduce our FY17 estimates. Our DDM-based target price of RM1.35 remains unchanged, as is as our Hold call on the stock. For exposure to M-REITs, we prefer Axis REIT instead.
4Q DPU of 1.89 sen
IGB REIT declared a DPU of 1.89 sen for 4Q14, which brings its YTD total DPU to 7.8 sen. This is slightly above our estimates as it accounts for 102% of our full-year DPU forecast of 7.6 sen.
4Q14 results review
For the 4Q14, IGB REIT's revenue grew by 4.6% yoy, mainly driven by higher rental income during the period underpinned by the various rental reversions undertaken during the year. IGB REIT's net property income (NPI) grew by 5.5% yoy to RM76.4m as IGB REIT's overall property expenses were mainly flat. No revaluation gains were recorded in the 4Q14 as it was done in 3Q14. This resulted in PBT during the quarter falling by 64% as the FY13 saw revaluation gains reflected in the 4Q. Stripping out the revaluation gains, core net profit grew by 5.9% yoy as interest expenses remained stable. After accounting for non-cash adjustments of RM9m, IGB REIT's distributable income grew by 6% yoy. Full-year core net profit grew by 12.4% on the back of a 7.2% yoy revenue growth.
Strong balance sheet but no targets
We believe there are no exciting catalysts that could boost earnings further in the medium-term given the lack of asset injections in the foreseeable future. While the acquisition outlook remains uncertain, we note that IGB REIT's balance sheet remains healthy as gross gearing and net gearing stood at 0.33x and 0.27x, respectively, as at end-FY14. Although acquisitions are a challenge currently due to the status quo between buyer and seller, we believe that IGB REIT's balance sheet is well prepared for any potential acquisitions.
Source: CIMB Daybreak - 28 January 2015
