Fortune Reit

Fortune Reit: 2Q13 results slightly above estimates. Fortune Reit income available for distribution of HKD153.7m (+12.6% y/y), driven by a 10.7% y/y increase in revenue to HKD307.9m and a 11.6% y/y rise in net property income to HKD219.6m. DPU was the same as 1Q13 at HK 9¢ (+11.9% YoY). Reversions achieved in 1H13 remained strong at 18.2%, above management's mid-teen target for the full year. Portfolio valuation is up 9.8%, pushing gearing down to 20.9%. The higher asset valuation creates more debt headroom (at HKD5b currently) for potential acquisitions. Fortune is trading at a P/B of 0.71x (NAV of HK$10.01). Broker recommendations: Stanchart reiterates OUTPERFORM with TP of HKD8.20; OCBC maintain its BUY rating and TP of HKD7.51;