Tuesday, January 31, 2012

Starhill Global

Starhill Global: Announced good set of 4Q11 results which was in-line. NPI at $36.5 was flat yoy and +6.1% qoq, while DPU at 1.01c, -2.9% yoy and flat qoq. Result brings FY11 NPI to $143.6m, +10.1% yoy and DPU to 4.12c, +5.6% yoy.

Strong performance due to full yr contributions from Starhill Gallery and Lot 10 in KL which were acquired in Jun10. SG contributed to 59% of grp’s FY11 NPI and was down 2% YoY
due to negative office rental reversions & disruptions from Wisma’s redevelopment. Full-year contribution from Msia & Aus malls resulted in a 92% & 14% YoY increase in NPI, respectively.

Among other smaller contributors, China saw a healthy increase in NPI (+11% YoY) while Japan (a/c for 4% of NPI) posted a decline in earnings due to lower rental rates. Overall, Grp remains confident of prospect, on back of healthy consumer confidence and increased tourist arrivals in SG and Msia and will continue to create value via through yield accretive acquisitions of prime assets to enhance growth in grp’s core markets.

Fundamentals remain strong, with overall occupancy rate at 98.7%, while gearing remains strong at 0.8%, with no major debt refinancing until 2013. At current price, grp trades at 7.3% yield and at 0.85x P/B.

Ratings as follow:
CIMB Maintains Buy with $0.68 TP.
Merrill Lynch maintains Buy with $0.70 TP.
Macquarie maintains O/p with $0.67 TP

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