P-Life REIT: Annouced 1Q11 results which were in-line, with DPU of 2.36c meeting 24% of consensus FY11 estimates. 1Q11 DPU grew 14% YoY on back of contributions from Jap assets acquired in 2010-11 and higher rentals from SG assets boosted by inflation (CPI-pegged rental formula)….
Taking 100% of manager’s fees in cash. 1Q11 DPU dipped 0.7% QoQ, despite a flat topline as mgt decided to take 100% of the manager's fees in units from this qtr. We note that switch to full cash payment could remove covert dilution for unitholders, and presents clean DPUs which fully reflect portfolio performances…..
At current price, grp trades at 1.22x P/B and a forward yield of 6%. CIMB maintains O/P with $1.98 TP. Note that PLife is the best inflation hedge in SG and is well positioned to acquire assertively, with a clear acquisition pipeline from sponsor Khazanah's Pantai healthcare chain in Malaysia. Balance sheet remains strong, with leverage ratio at 34%, unchanged from 4Q10, giving further headroom for debt leverage.
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