CMT

CMT: 3Q results came in below consensus on higher retained income and relatively weak underlying trends. 3Q12 DPU of 2.42cts (flat YoY, +1.7% QoQ) Rev and NPI rose 5% and 4% YoY respectively driven by the opening of JCube in April, completion of Bugis+ AEI in July and positive rent reversions (+6.1% for 9M12 vs. 6.4% in 1H12). Portfolio occupancy was stable at 98.4% with all malls at almost full occupancy except for IMM, Atrium and CQ which are undergoing AEI. YTD shopper traffic fell 2.2% while tenant sales rose a sluggish 1.2%. Going forward, retained income will be utilized for working capital purposes and no longer be distributed. Going forward, market watchers expdct AEI to contribute but risk from one-off CB redemption. CMT’s growth profile will likely improve into next year underpinned by the completion of AEIs. JCube and Bugis+ are now almost fully committed at 99.5% and 98.5% respectively, attracting 1.3-1.4m visitors monthly on avg. Atrium is >90% committed and on track to open in early Nov. However, the potential redemption of the remaining S$150.5m of 2012 CB could result in a one-off charge of $14m (0.42c/shr).presenting downside to headline DPU. Ratings as follow: Deutsche maintain Hold with $2.14 TP Nomura maintains Neutral with $1.94 TP HSBC maintains Hold with $2.20 TP UOB Kay Hian maintains Buy with $2.40 TP CS maintains O/p with $2.34 TP