CapitaLand Ascendas REIT - Maybank Research 2024-02-02: Limited Upside; Downgrade To HOLD

CapitaLand Ascendas REIT - Limited Upside; Downgrade To HOLD

Published:
CapitaLand Ascendas REIT (SGX:A17U) | SGinvestors.ioCapitaLand Ascendas REIT (SGX:A17U)
  • CapitaLand Ascendas REIT (SGX:A17U) reported 2H23 DPU of S$0.0744, -3.6% h-o-h, -6.1% y-o-y. FY23 DPU of S$0.1516 was -4% y-o-y, 2% below consensus and our estimates.
  • We cut our DPU estimates by ~6%. Combined with a lower discount rate, our DDM-based target price inches up to S$2.75, leaving us with limited upside of 2% and forcing us to downgrade CapitaLand Ascendas REIT to HOLD.

Strong reversions but sharp rise in borrowing cost

  • - Read this at SGinvestors.io -
  • Portfolio metrics were mixed with mild slippage in occupancy but mid-teens positive reversion. Same-store valuation was lower.

Higher costs offset top-line growth

  • - Read this at SGinvestors.io -
  • Growth in utility costs and property taxes moderated the growth in NPI and led to 250bps lower margins for the full year.
  • Furthermore, CapitaLand Ascendas REIT's borrowing cost jumped 26% and 37% y-o-y for 2H and full year, respectively, due to 20/100bps increases in funding cost on h-o-h/ y-o-y basis to 3.5%. Funding cost guide is for 4.0% for FY24. Gearing rose ~120bps h-o-h to 37.9%.

Strong reversions, lower occupancy

  • Read more at SGinvestors.io.




Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.




Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-02-02



Read also Maybank's most recent report:
2024-04-23 CapitaLand Ascendas REIT - Staying On The Sidelines.

Price targets by 3 other brokers at CapitaLand Ascendas REIT Target Prices.

Listing of research reports at CapitaLand Ascendas REIT Analyst Reports.

Relevant links:
CapitaLand Ascendas REIT Share Price History,
CapitaLand Ascendas REIT Announcements,
CapitaLand Ascendas REIT Dividends & Corporate Actions,
CapitaLand Ascendas REIT News Articles





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