Wednesday, March 30, 2016


Cache: OCBC upgrades to Buy from Hold, although TP is shaved to $0.88 from $0.9.

-While there is uncertainty over two master leases at Schenker Megahub and Hi-Speed Logistics Centre (these being a large part of the 12% of leases expiring in 2016), OCBC thinks this has been priced in.
-OCBC lowers FY16-17 DPU by 2.8%, largely on higher financing cost assumptions.
-Despite that, Cache is trading at forward yield of 9.8% (2.2 SD over 5 year mean of 8%), and 0.95x P/B (1.8 SD below 5 year mean of 1.16x)

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