CapitaRetail China Trust

CapitaRetail China Trust (CRCT): StanChart initiates coverage on counter and tips for a possible privatisation candidate with a 8.8% 2015 DPU yield. House has an Outperform rating on CRCT with $1.58 TP. StanChart expects DPU to rise 9% in 2014, mainly due to income from newly acquired asset, CapitaMall Grand Canyon. House estimate 16% DPU growth in 2015 after enhancement works are completed at CapitaMall Minzhongleyuan. Further, same-store rental is expected to grow 4% p.a. for the rest of the portfolio, as economic growth moderates in China. CRCT is trading at an implied net property income yield of 6.8%, compared with current prime Beijing retail yields of 3.5-4.5%. Its portfolio is trading at a 45% discount to RNAV of $2.42.