MCT

MCT: FY11 results above expectations. FY11 DPU exceeded mgt’s forecast by 18%, bringing FY12 DPU to 5.27cts, implying 5.9% yield. 4Q11 DPU was 1.55cts, +9% qoq. 4Q revenue & NPI rose 11% and 16% respectively on strong reversions in VivoCity (+25% for FY12), contribution from Alexander Retail Centre (ARC), and rent step up in Merrill Lynch Harbour Front )MLHF). Gearing is at 37.6%, with interest cost at sector low of 1.95^. Vivo’s operational trends remained firm with FY12 shopper traffic rising 15.5% to 51.6m and tenant sales +8.7%, with high retention rate of 92% and occupancy sustained at a high 98.1%. Avg passing rents are now $10.6 psf, +8.3% yoy. VivoCity is expected to see further rental reversions, with 33% of leases by gross revenue, or >200 leases up for renewal in FY13. Occupancy in ARC also rose from 36.2% to 50.3%, although leasing progress remains relatively slow with committed occupancy up slightly from >55% to >57%, with mgt selective about tenant mix. Deutsche maintains Buy, ups TP to $1.04 from $1. Says valuations are attractive at FY13e yields of 6.8%. Goldman maintains Buy with TP $1.02. JPM retains Overweight with TP $0.92.