CRCT

CRCT: 1Q13 results generally in line. Gross revenue climbed 3.7% yoy to $39.2m, while NPI rose 1.8% yoy to $25.9m. This was driven by good tenancy adjustments at CapitaMall Saihan and CapitaMall Wuhu. However, NPI margin decreased due to, i) accrual to compensation to tenants from pre-termination of leases as part of brand refinement and to facilitate AEI work at CapitaMall Xizhimen and CapitaMall Minzhongleyuan, and ii) higher property mgt fees and staff related costs. DPU fell 4.1% yoy to 2.31 cts, although excluding the 57m new units issued through pte placement in Oct ’12, DPU would have been higher at 3.7% yoy. CRCT has reasonably good financial position, with gearing at 25.4% and interest coverage ratio of 8.4x. However average term to maturity is not long at 1.3 yrs. Mgt expects all in cost of debt to be maintained below 3%. OCBC maintains Hold, with slightly higher TP at $1.76 (from $1.72).