P Life REIT: Annouced strong set of 4Q11 results which was broadly in-line. NPI at $20.8m, +5.9% yoy and +3.5% qoq, while DPU at 5.52c, +3.2% yoy and +5.1% qoq. Result brings FY11 NPI to $80.3m, +9.1% yoy and DPU at 5.36c, +9.2% yoy.
Strong results primarily due to rev contribution from grp’s Jap nursing home acquired in Jan11 and appreciation of Jap Yen. Rev growth was further driven by higher rent from the SG hospitalproperties due to rental growth rate of 5.3% (under the CPI + 1% rent revision formula)
Going forward, grp remains positive on outlook and intends to focus on consolidating its Japan business for FY12 and remains steadfast in strengthening PLife REIT’s financial position and generating organic growth across the portfolio to sustain earnings stability.
We note that grp’s fundamentals remain strong, with a 100% occupancy for its portfolio, while Leverage ratio stood at 34.8%, well below the 60% threshold, suggesting ample room for to gear its balance sheet to fund acquisitions, backed by a strong interest coverage of 7.9x.
At current price, grp trades at 1.2x P/B with a 5.3% yield.
Ratings as follow:
Phillips maintains Neutral with $1.88 TP.
UOB Kay Hian maintains Buy with $2.00 TP.
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