CapitaLand Integrated Commercial Trust - Maybank Research 2023-10-30: Stable Performance; Resilient Operational Update

• CapitaLand Integrated Commercial Trust (SGX:C38U)’s 3Q23 business updates indicate increasing trend for gross revenue and NPI albeit at a slower pace and with weaker margins.
• Occupancy improved sequentially with gains across retail, office and integrated developments.
• - Read this at SGinvestors.io -
• We lower our DDM-based target price for CapitaLand Integrated Commercial Trust by 11% to S$1.90 due to higher cost of equity and maintain our BUY rating.

Stable financial performance

• CapitaLand Integrated Commercial Trust's 3Q23 gross revenue of S$391.3m was +1.3% q-o-q, +4.6% y-o-y. NPI declined 0.4% q-o-q but was up 0.6% y-o-y. 9M23 revenue and NPI was up 9.8% and 6.7% y-o-y, respectively. NPI margins continue to slide (~1% q-o-q, ~3% y-o-y) due to higher overall costs.
• - Read this at SGinvestors.io -
• Management guided for FY24 funding cost to range between 3.5% to “high 3%” vs current 3.3%. Management of CapitaLand Integrated Commercial Trust reaffirmed access to capital markets and loans. Of note, half of CapitaLand Integrated Commercial Trust’s S$9.7b debt comprises bonds.

Healthy operating metrics

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-10-30 SGinvestors.io

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