Cache Logistics

Cache Logistics: CIMB maintains O/p with $1.15 TP. House cite yield as one of the most attractive yields in coverage, with CY12 DPU yields of 7.9%. In the event of an economic downturn, a potential flight to yields could provide support for its share price. Like its earnings stability, low gearing and acquisition pipeline from its strong sponsor, CWT.

Believe sponsor CWT could monetise one of its warehouses in 2012, offering acquisition opportunities to Cache. Also expect a near-term DPU uplift as mgt attempts to lower its all-in financing costs. Maintain earnings estimates and DDM-based target price of $1.15 (discount rate 8.6%), anticipating re-rating catalysts from lower financing costs and accretive acquisitions.