FCT

FCT: Worse than expected revenue due to AEI works at Causeway Point, 3Q rev at 24.2m was -10.0% yoy -1.9% qoq. Net profit at 10.7m -23.4% yoy -18.9% qoq. 3Q DPU of 1.95c was -5.8% yoy -5.9% qoq.

The AEI works at Causeway Point are expected to complete in Dec 2012 but occupancy rates should rise from current 78% to above 90% in Sep. Overall portfolio occupancy rates remain strong at 88% with rental reversion positive at +4% Acquisition of Bedok Point is expected which mgmt has signaled a possible equity raising for partial funding (likely to cause short-term overhang).

Annualized YTD DPU of 5.97c is approx 5.1% and FCT is trading at current 1.2x P/B. Credit Suisse maintains Outperform with TP$1.90, StanChart maintains Outperform with TP$1.69 and Daiwa maintains Hold with TP$1.53.