Tuesday, June 23, 2015

Frasers Centrepoint

Frasers Centrepoint (FCL): CLSA views FCL’s latest acquisition of the Malmaison and Hotel Du Vin (MHDV) as strategically positive given the benefits of a higher recurring income base.

Incorporating the latest acquisitions, house lift earnings by ~2% and RNAV by ~1%. However, net gearing potentially rises beyond 100% net D/E and the house also lowered its dividend payout ratio from 50% to 40% to $0.086/share.

CLSA continues to rate FCL a BUY given its resilient recurring income base, opportunities to further unlock value and potential corporate restructuring which will drive a rerating of valuations.

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