Perennial China Retail Trust: is a business trust focused predominantly on retail devt projects in China, with assets comprising 4 retail malls and 2 office towers valued at ~$1.1b by CBRE.
StanChart initiates at Outperform with TP $0.81, pegged at 35% discount to RNAV of $1.25, translating to ~5% FY11E yield. Likes PCRT’s portfolio assets, which are located near major transport nodes, and acquired at an attractive Rmb 8900/sm, giving prospective 8.3% FY11E NPI yield.
Notes PCRT has options to purchase a 50% stake in high-speed railway (HSR) devts at Chengdu, Xi-an and Changsha at agreed prices of Rmb 8000-10000/ sm, which if acquired would grow the portfolio 4-fold by 2014E.
Notes PCRT’s unit price has fallen 10% since IPO and is now trading 6% below NAV. Believes the market has largely priced in devt and execution risks.
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