Ascendas India Trust - Navigating Near Term Bends
- Ascendas India Trust (SGX:CY6U)'s revenue and net property income for 2HFY21 rose by 6% and 7% y-o-y, respectively, in INR terms to INR5,367m and INR4,325m. The trust also reported a like-for-like revaluation gain of ~S$123.8m.
- While operational results came in slightly below our estimates due to lower vacancies at ITPC, a portion of the earnings miss came from our tax rate assumptions, which were lower than what was actually incurred.
- We were more optimistic about our park occupancy assumptions but do note that the drop in occupancy rates is likely behind us, especially in Chennai (ITPC). Looking ahead, we understand that the manager remains confident to retain a substantial portion of leases in FY22 (24% of revenues).
- The manager continues to build on its internal pipeline of forward-funding projects which is expected to potentially grow its GFA by 68%. Given the revised delays in acquisition timelines and potential delays in construction progress, we have pared our construction and acquisition estimates to 2H22, 2023, and beyond.
- Entrenching itself as an emerging datacentre player. Ascendas India Trust recently completed the acquisition of a land for development of a datacentre in Navi Mumbai, India for INR1.3bn (S$23.8m).
- While a near-term earnings disappointment due to transitionary vacancies may occur, we believe that we are past the trough. Our target price is adjusted to S$1.70. Despite the earnings cut, Ascendas India Trust still offers an attractive 11% CAGR in DPUs from FY22-23F.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Derek TAN DBS Group Research | https://www.dbs.com/insightsdirect/ 2022-01-27 2022-01-27
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