ARA Asset Mgt: IIFL: reiterate Add but decreases TP to $1.67 from $1.90. Note that Steady income; remains a growth play.
ARA expects recurrent income to be stable, and growth to come from:
1) listing of RMB denominated REIT in HK;
2) potential listing of Malaysian retail / China commercial REIT;
3) acquisitions by existing REITs;
4) divestment of Asia Dragon Fund 1 private fund and successful raising and
deployment of US$1bn of committed capital for ADF 2; and
5) M&A opportunities.
House like ARA's scalable business model, which offers 30%+ ROEs and yields of >4%. Lowers 2011-12 earnings estimates by 2-3.5% and increased 2013 earnings estimate by 30% to account for lower management fees from private funds and performance fees from divestment of ADF 1.
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