ARA Asset Mgmt

ARA Asset Mgmt: FY12 results in line with consensus; earnings rose 7% y/y to $72.7m, due to growth in recurring REIT and fund management fee income. While acquisition and performance fees declined 61% y/y, finance income rose 108%. This was due to gains on disposal of REIT units received in lieu of cash as fees and higher distribution income because Asia Dragon Fund I (ADF I) distributed profits from asset divestments. ARA has a 2% stake in ADF I. Over 2012, ARA achieved $2.3b growth in assets under management, to $22.1b as of 31 December 2012. Management expects to be able to match its run rate of $2b p.a. AUM growth. ARA sees opportunities for its REITs to take advantage of cheap capital to acquire assets. StanChart note growth opportunities are less visible than in past years, which saw obvious fund raising or asset acquisition opportunities. ARA declared a 1-for-10 bonus issue and a final dividend of 2.7¢ (payable to bonus shares as well). Including 1H12, a total 5¢ dividend was declared in FY12. Total distributions of $40.5m for the year increased 5.5% y/y, translating to a 56% payout. StanChart maintains IN-LINE with TP of $1.84.