Académique Documents
Professionnel Documents
Culture Documents
www.dbsvickers.com
ed-SGC / sa- CT
18 Sep 2015
SET :
1,389.70
Analyst
Chanpen SIRITHANARATTANAKUL +662 657 7824
chanpens@th.dbsvickers.com
Thailand Research Team +662 658 1222
STOCKS
CPTGF
CPNRF
FUTUREPF
IMPACT*
LHSC
POPF
SPF
TLGF
TGROWTH
Type of
Price
Assets
Bt
US$m
Bt
2015F
2016F
Office
Retail
Retail
Exhibition Center
Retail
Office
Airport
Retail
Industrial
10.00
16.70
18.20
11.20
10.40
13.30
19.60
13.20
12.20
269
1,025
267
461
138
178
517
188
856
10.70
18.00
22.30
12.00
11.40
14.00
21.40
15.10
12.90
8.0
6.0
7.0
6.4
7.0
8.1
6.6
6.1
7.6
8.6
7.6
7.3
6.6
7.0
8.3
6.6
6.1
7.6
Yields (%)
Samui Airport Property Fund Leasehold (SPF): SPF has leasehold rights
to operate Samui Airport. Revenue is derived from the number of
departing passengers and incoming flights at Samui Airport.
Industry Focus
Property Fund/REIT Sector
Analyst
Chanpen Sirithanarattanakul +662 657 7824
chanpens@th.dbsvickers.com
Thailand Research Team
research@th.dbsvickers.com
Table of Contents
Yield, Valuation and Recommendation
Regional Comparison
10
11
12
Current Status
13
Price Performance
15
Industry Outlook
Office
15
Retail
17
Ready-Built Factories
19
Warehouses
19
Company Guides
-
26
32
38
44
50
56
62
68
Disclaimers
Page 2
80
Industry Focus
Property Fund/REIT Sector
7%
9.0
6%
8.0
7.0
5%
6.0
4%
5.0
3%
4.0
3.0
2%
2.0
1%
1.0
0%
PFPO/REIT
2015F
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0.0
Note:
1. Distribution includes dividends and capital reduction
2. Price is based on market price at end of year, except
2015 which is current price
Yield-Spread. The following chart shows the yield-spread
between Thai PFPO/REIT and Thai 10-year government bond
averaged 3.2% over the past decade.
5.0
%
9.0
4.0
8.0
2.0
7.0
1.0
3.0
3.0
Retail
Residential
Office
Hotel
Industrial
4.0
Cineplex
Airport
5.0
Apartment
6.0
2013
2012
Bond 10Y
2015F
Dividend Yield
2011
2010
2009
2008
2007
2006
2005
2.0
Page 3
Industry Focus
Property Fund/REIT Sector
Top Picks
2011
2012
2013
2014
2015
Occupancy trend
Distribution yield
P/NAV
IRR
Upside to our TP
Trading liquidity
Page 4
CPNRF: Yields
%
16
CPNRF's Yield
10-Year Govt Bond Yield
14
12
10
8
6
4
2
-
2015
2015
2010
2014
2014
2009
2013
2013
0.50
2012
-2 sd
0.60
2012
-1 sd
0.70
2011
2011
0.80
2010
Mean
0.90
2010
+1 sd
1.00
2009
2009
+2 sd
1.10
2008
1.20
2008
P/NAV (x)
1.30
2007
2007
PFPO/REIT: Price/NAV
Industry Focus
Property Fund/REIT Sector
SPF's Yield
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
CPTGF: Yields
%
10
CPTGF's Yield
10-Year Govt Bond Yield
TLGF: Yields
%
8
TLGF's Yield
6
4
Jul-14
Jan-14
Jul-15
%
20
18
16
14
12
10
8
6
4
2
Jan-15
SPF: Yields
5
4
Sep-15
Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
10
8
6
4
2
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Mar-14
Dec-13
12
Sep-13
FUTUREPF's Yield
Jun-13
%
14
Mar-13
Page 5
Industry Focus
Property Fund/REIT Sector
Page 6
Ticker
Freehold/Leasehold
Mkt Cap
(%)
P/NAV
Daily Turnover
(US$)
FY15
(x)
(US$m)
6.4
6.4
8.4
6.1
5.0
9.7
7.3
6.4
6.4
7.7
7.7
9.4
5.1
6.7
7.1
5.9
5.5
14.2
1.8
1.8
0.8
0.5
0.8
0.7
0.7
1.0
1.0
1.1
1.1
0.4
0.8
0.9
1.0
1.0
0.5
0.7
0.4
0.29
0.29
0.02
0.00
0.01
0.00
0.01
0.36
0.36
0.08
0.08
0.01
0.08
0.04
0.00
0.00
0.01
0.00
0.01
SPF
Leasehold
LHPF
GOLDPF
UOB8TF
URBNPF
IMPACT
Freehold
MJLF
Leasehold
CTARAF
DTCPF
ERWPF
M-PAT
SIRIP
LUXF
SBPF
QHOP
Leasehold
Leasehold & Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Leasehold
518
518
77
31
58
8
174
462
462
120
120
35
97
47
29
51
30
18
23
QHHR
SPWPF
77
55
9.0
8.3
0.8
0.9
0.03
0.01
THIF
860
1,321
3.6
6.8
1.1
0.8
0.01
0.02
AMATAR
M-II
M-STOR
TFUND
TIF1
TGROWTH
HPF
MONTRI
PPF
SSTPF
SSTSS
TLOGIS
WHAPF
111
45
18
339
18
188
111
15
68
18
22
142
298
7.6
7.5
6.6
6.0
7.3
7.6
7.8
8.0
7.3
7.4
7.2
6.1
6.4
3.3
0.9
0.9
1.0
0.7
1.2
0.8
0.9
1.0
0.9
0.9
1.0
1.1
0.21
0.00
0.00
0.07
0.01
0.09
0.01
0.00
0.01
0.00
0.00
0.03
0.09
WHART
91
7.3
n.a.
0.08
TREIT
98
1,582
5.8
7.1
1.0
1.1
0.04
0.04
Industry Focus
Property Fund/REIT Sector
Ticker
Freehold/Leasehold
BKKCP
CPNCG
JCP
KPNPF
MIPF
POPF
SSPF
CPTGF
QHPF
TCIF
Freehold
Leasehold
Leasehold
Freehold
Freehold
Leasehold
Freehold
Leasehold
Leasehold
Leasehold
UNIPF
MNIT
MNIT2
MNRF
TU-PF
Freehold
Leasehold
Leasehold
Leasehold
Leasehold
CPNRF
CRYSTAL
FUTUREPF
Leasehold
Leasehold
Leasehold
TLGF
TNPF
TRIF
TTLPF
LHSC
Leasehold
Mkt Cap
Yield (%)
P/NAV
Daily Turnover
(US$)
FY15
(x)
(US$m)
27
140
17
50
106
178
44
269
221
825
1,878
14
11
22
20
5
71
1,028
109
268
6.7
7.1
4.0
6.4
5.8
8.1
2.7
8.0
7.5
5.0
6.1
7.4
5.4
8.7
8.3
6.0
6.0
7.7
7.0
0.8
1.0
1.1
0.9
1.5
1.1
1.0
1.0
0.9
1.1
1.0
0.9
0.5
0.7
0.5
0.3
0.6
1.3
0.9
1.5
0.00
0.15
0.02
0.00
0.10
0.07
0.17
0.08
0.00
0.06
0.00
0.00
0.01
0.01
0.00
0.00
0.56
0.02
0.07
859
20
632
96
6.1
4.3
8.3
1.2
0.5
1.1
1.7
0.47
0.01
0.00
0.00
141
3,153
7.3
5.8
1.0
1.1
0.08
0.15
Page 7
Industry Focus
Property Fund/REIT Sector
Regional Comparison
La s t Pri c e
DPU c e n ts
Yi e l d
FYE
1 1 -Se p -1 5
Pri c e Ta rg e t
Up s i d e
2015
2016
2015
2016
R e c o m'd
Dec
Sep
Dec
1.315
1.310
0.950
1.48
1.51
1.12
13%
15%
18%
8.6
9.7
6.9
9.2
9.8
7.1
6.5%
7.4%
7.3%
7.0%
7.5%
7.5%
Buy
Buy
Buy
Dec
Dec
Mar
Sep
Aug
1.890
1.345
0.840
1.895
0.960
2.07
1.69
0.92
2.05
0.99
10%
26%
10%
8%
3%
11.4
10.6
7.6
11.8
5.5
11.8
11.0
7.8
12.0
5.5
6.0%
7.9%
9.0%
6.2%
5.7%
6.2%
8.1%
9.3%
6.3%
5.7%
Buy
Buy
Hold
Buy
Hold
Jun
Dec
Mar
Mar
0.760
1.515
1.320
0.935
0.91
1.58
1.35
1.12
20%
4%
2%
20%
7.6
9.5
8.3
7.3
5.4
10.1
8.6
7.9
10.0%
6.3%
6.3%
7.8%
7.1%
6.6%
6.5%
8.4%
Buy
Hold
Hold
Buy
Mar
Mar
Mar
Mar
Dec
Dec
Dec
2.200
0.840
1.530
1.010
0.610
0.990
0.790
2.30
0.90
1.50
1.11
0.61
1.09
0.86
5%
7%
-2%
10%
0%
10%
9%
14.9
5.6
10.6
7.5
5.0
8.5
6.3
15.0
5.8
10.4
7.8
5.1
8.7
6.4
6.8%
6.7%
6.9%
7.4%
8.2%
8.6%
8.0%
6.8%
6.9%
6.8%
7.7%
8.3%
8.8%
8.1%
Hold
Hold
Hold
Buy
Hold
Hold
Buy
Mar
Dec
Dec
Dec
Sep
Dec
Dec
Mar
0.605
1.210
1.365
0.615
0.725
0.800
2.260
0.950
0.74
1.38
1.65
0.71
0.83
0.98
2.56
0.97
22%
14%
21%
16%
14%
22%
13%
2%
5.6
8.8
11.1
4.7
6.0
6.5
13.1
8.0
5.7
9.2
11.3
4.7
6.1
6.6
12.2
8.7
9.3%
7.3%
8.1%
7.7%
8.3%
8.2%
5.8%
8.4%
9.4%
7.6%
8.3%
7.6%
8.3%
8.2%
5.4%
9.2%
Buy
Buy
Buy
Hold
Hold
Buy
Buy
Hold
Dec
Dec
0.645
1.005
0.90
1.14
40%
13%
6.5
6.4
6.4
7.0
10.0%
6.4%
10.0%
7.0%
Buy
Buy
Ho n g Ko n g (HK$ )
Champion REIT
Fortune REIT
Prosperity REIT
Sunlight REIT
Link REIT
Dec
Dec
Dec
Jun
Mar
3.95
7.50
2.78
3.90
41.25
4.78
9.18
3.06
4.23
48.10
21%
22%
10%
8%
17%
20.0
42.0
16.0
20.0
166.0
19.0
46.0
17.0
22.0
183.0
5.2%
5.6%
5.9%
5.1%
4.0%
4.9%
6.2%
6.2%
5.6%
4.4%
Buy
Buy
Buy
Buy
Hold
M a l a ys i a (R M )
Axis REIT
CapitaMalls Msia Trust
IGB REIT
Pavilion REIT
MRCB-Quill REIT
Sunway REIT
Dec
Dec
Dec
Dec
Dec
Jun
1.66
1.39
1.30
1.52
1.11
1.52
1.75
1.50
1.40
1.60
1.25
1.75
5%
8%
8%
5%
13%
15%
9.9
8.9
7.8
8.0
8.4
8.7
9.0
8.8
8.0
8.1
8.4
9.1
5.9%
6.4%
6.0%
5.2%
7.5%
5.7%
5.4%
6.3%
6.2%
5.3%
7.5%
6.0%
Hold
Buy
Buy
Hold
Hold
Buy
Th a i l a n d (B t)
CP Tower Growth Leasehold
CPN Retail Growth Leasehold Property Fund
Future Park LH Prop Fund
Impact Growth Real Estate Investment Trust
LH Shopping Centers Leasehold
Prime Office LH Prop Fund
Samui Airport Property Fund (Leasehold)
Tesco Lotus Retail Growth
TICON Industrial Growth Leasehold Property Fu
Dec
Dec
Dec
Mar
Dec
Dec
Dec
Feb
Dec
10.00
16.70
18.20
11.20
10.40
13.30
19.60
13.20
12.20
10.70
18.00
22.30
12.00
11.40
14.00
21.40
15.10
12.90
7%
8%
23%
7%
10%
5%
9%
14%
6%
80.0
99.7
127.0
42.0
73.0
108.0
129.6
81.0
93.2
86.0
126.0
133.0
75.0
73.0
111.0
129.6
80.9
93.2
8.0%
6.0%
7.0%
3.8%
7.0%
8.1%
6.6%
6.1%
7.6%
8.6%
7.6%
7.3%
6.4%
7.0%
8.3%
6.6%
6.1%
7.6%
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Si n g a p o re (S$ )
O ffi c e
CapitaLand Commercial Trust
Fraser Commercial Trust
Keppel Reit
R e ta i l
CapitaLand Mall Trust
CapitaLand Retail China Trust
Croesus Retail Trust *
Frasers Centrepoint Trust
SPH REIT
M i xe d (R e ta i l & O ffi c e )
Starhill Global REIT
Suntec REIT
Mapletree Commercial Trust *
Mapletree Greater China Commercial Trust *
I n d u s tri a l
A-Reit *
Ascendas India Trust *
Mapletree Industrial Trust *
Mapletree Logistics Trust *
Cambridge Industrial Trust
Cache Logistics Trust
Soilbuild Business Space Reit
Ho s p i ta l i ty & He a l th c a re
Ascendas Hospitality Trust *
Ascott Residence Trust
CDL Hospitality Trust
Far East Hospitality Trust
Frasers Hospitality Trust
OUE Hospitality Trust
Parkway Life
Religare Health Trust *
O th e rs
IREIT Global
Keppel DC REIT
Page 8
Industry Focus
Property Fund/REIT Sector
Regional Comparison
1 1 -Se p -1 5
Ge a ri n g R a ti o
FY1 5 F
B V Pe r Sh
FY1 5 F
P/B ra ti o
Y/E
La s t Pri c e
Dec
Sep
Dec
1.315
1.310
0.950
19%
36%
37%
1.74
1.67
1.41
Dec
Dec
Mar
Sep
Aug
1.890
1.345
0.840
1.895
0.960
36%
28%
47%
30%
26%
Jun
Dec
Mar
Mar
0.760
1.515
1.320
0.935
Mar
Mar
Mar
Mar
Dec
Dec
Dec
3M
6M
12M
0.75
0.79
0.67
-4.7%
-7.4%
-9.1%
-16.8%
-11.5%
-17.4%
-22.7%
-10.3%
-22.1%
-21.3%
-5.4%
-23.7%
1.82
1.69
0.94
1.85
0.93
1.04
0.80
0.89
1.02
1.04
-6.0%
-11.2%
-9.7%
-5.7%
-5.4%
-10.9%
-20.7%
-9.7%
-6.2%
-8.1%
-8.7%
-17.5%
-10.6%
-5.7%
-7.3%
-5.3%
-15.4%
-11.1%
-2.8%
-10.3%
36%
35%
36%
41%
0.92
2.07
1.24
1.18
0.83
0.73
1.07
0.79
-8.4%
-8.5%
-2.6%
-7.0%
-11.6%
-13.4%
-10.2%
-10.1%
-7.9%
-18.6%
-13.7%
-9.7%
-7.3%
-16.8%
-9.3%
-1.6%
2.200
0.840
1.530
1.010
0.610
0.990
0.790
34%
35%
35%
39%
36%
40%
36%
2.08
0.68
1.32
1.02
0.68
0.97
0.80
1.06
1.24
1.16
0.99
0.90
1.02
0.99
-4.4%
-9.2%
2.3%
-6.1%
-4.7%
-5.7%
-6.0%
-10.2%
-6.7%
0.7%
-10.2%
-11.6%
-13.9%
-6.0%
-10.9%
-5.6%
0.3%
-17.2%
-12.2%
-14.3%
-1.3%
-6.8%
1.2%
5.9%
-14.4%
-14.7%
-16.1%
0.0%
Mar
Dec
Dec
Dec
Sep
Dec
Dec
Mar
0.605
1.210
1.365
0.615
0.725
0.800
2.260
0.950
37%
39%
35%
32%
40%
42%
36%
15%
0.72
1.35
1.63
0.97
0.94
0.90
1.70
0.94
0.84
0.90
0.84
0.64
0.77
0.89
1.33
1.01
-10.4%
-4.0%
-6.5%
-10.9%
-10.5%
-10.1%
-7.4%
-9.5%
-14.2%
-4.0%
-17.0%
-20.7%
-15.7%
-14.0%
-0.9%
-5.5%
-12.3%
-4.7%
-20.4%
-24.5%
-19.0%
-14.0%
-3.4%
-10.0%
-16.0%
-2.4%
-19.5%
-27.2%
-18.5%
-10.6%
-3.8%
0.0%
Dec
Dec
0.645
1.005
32%
34%
0.75
0.88
0.86
1.15
-4.4%
-8.2%
-6.3%
-4.7%
-6.9%
-2.9%
-16.8%
0.0%
Ho n g Ko n g (HK$ )
Champion REIT
Fortune REIT
Prosperity REIT
Sunlight REIT
Link REIT
Dec
Dec
Dec
Jun
Mar
3.95
7.50
2.78
3.90
41.25
22%
30%
27%
22%
12%
8.36
12.76
4.90
7.99
51.53
0.47
0.59
0.57
0.49
0.80
-6.6%
-7.3%
-4.8%
-0.3%
-6.7%
-12.2%
-4.0%
0.4%
-0.5%
-10.1%
5.9%
-8.5%
-6.7%
4.3%
-13.7%
11.6%
2.3%
6.9%
17.5%
-10.7%
M a l a ys i a (R M )
Axis REIT
CapitaMalls Msia Trust
IGB REIT
Pavilion REIT
MRCB-Quill REIT
Sunway REIT
Dec
Dec
Dec
Dec
Dec
Jun
1.66
1.39
1.30
1.52
1.11
1.52
33%
29%
24%
15%
36%
31%
1.21
1.29
1.06
1.26
1.39
1.26
1.37
1.08
1.22
1.20
0.80
1.21
-0.9%
8.6%
0.8%
5.6%
1.8%
1.3%
-5.4%
-2.1%
-2.3%
0.0%
-4.3%
-8.4%
-6.7%
-4.8%
-2.3%
2.0%
-11.2%
-5.0%
-5.7%
-1.4%
0.8%
10.1%
-5.9%
1.3%
Th a i l a n d (B t)
CP Tower Growth Leasehold
CPN Retail Growth Leasehold Property Fund
Future Park LH Prop Fund
Impact Growth Real Estate Investment Trust
LH Shopping Centers Leasehold
Prime Office LH Prop Fund
Samui Airport Property Fund (Leasehold)
Tesco Lotus Retail Growth
TICON Industrial Growth Leasehold Property Fu
Dec
Dec
Dec
Mar
Dec
Dec
Dec
Feb
Dec
10.00
16.70
18.20
11.20
10.40
19.60
19.60
13.20
12.20
Net Cash
6%
6%
24%
18%
7%
Net Cash
9%
7%
10.34
13.02
12.52
10.80
10.26
11.55
11.04
11.24
10.28
0.97
1.28
1.50
1.04
1.01
1.15
1.78
1.17
1.09
0.0%
0.0%
-1.6%
-1.8%
-3.7%
1.5%
1.6%
-2.2%
0.0%
0.0%
1.2%
1.1%
4.7%
-1.0%
6.4%
9.6%
0.0%
0.0%
0.5%
1.2%
5.3%
8.7%
1.0%
10.8%
12.1%
-0.6%
2.6%
1.5%
-1.2%
4.7%
nm
nm
5.6%
10.8%
-4.6%
13.2%
Si n g a p o re (S$ )
O ffi c e
CapitaLand Commercial Trust
Fraser Commercial Trust
Keppel Reit
R e ta i l
CapitaLand Mall Trust
CapitaLand Retail China Trust
Croesus Retail Trust *
Frasers Centrepoint Trust
SPH REIT
M i xe d (R e ta i l & O ffi c e )
Starhill Global REIT
Suntec REIT
Mapletree Commercial Trust *
Mapletree Greater China Commercial Trust *
I n d u s tri a l
A-Reit *
Ascendas India Trust*
Mapletree Industrial Trust*
Mapletree Logistics Trust*
Cambridge Industrial Trust
Cache Logistics Trust
Soilbuild Business Space Reit
Ho s p i ta l i ty & He a l th c a re
Ascendas Hospitality Trust *
Ascott Residence Trust
CDL Hospitality Trust
Far East Hospitality Trust
Frasers Hospitality Trust
OUE Hospitality
Parkway Life
Religare Health Trust *
O th e rs
IREIT Global
Keppel DC REIT
A-Reit, Ascendas Hospitality Trust, Ascendas India Trust, Croesus Retail Trust, Mapletree Industrials Trust, Mapletree Logistics Trust, Mapletree
Commercial Trust, Mapletree Greater China Commercial Trust, Religare Health Trust
Religare Health Trust (FY16 - 17)
Source: DBS Bank, DBS Vickers, AllianceDBS Research, Bloomberg Finance L.P, Thomson Reuters
Page 9
Industry Focus
Property Fund/REIT Sector
51
51
Property Funds
40
30
20
10
46
41
35
29
26
2015
2014
2013
2012
2011
2010
REITs
Property Funds
250,000
200,000
150,000
100,000
50,000
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
REITs
50
2009
First REIT listed in 2014. The first Thai REIT, Impact Growth
Real Estate Investment Trust (IMPACT), was listed on the
SET on 1 October 2014. Since then, there have been four
other REIT listings on the SET.
51 PFPOs and 5 REITs listed on the SET currently. Todate,
there are 51 PFPOs and 5 REITs listed on the SET with a
combined market capitalisation of Bt333.4bn (US$9.3bn).
The sector accounts for 2.6% of the SETs total market
capitalisation currently. Initially, these PFPOs were listed
under the Property Sector. But as the number of PFPOs
grew, the SET created a separate Property Fund & REIT
sector in 2009.
Page 10
Industry Focus
Property Fund/REIT Sector
Property Fund
Legal Structure
Mutual fund
Trust
Minimum Size
Same
Same
REIT
After establishment: 35
Listing of Unit
Management
Registrar
Investment
Type of property in which investment can
be made
Investment in real estate abroad
Not permitted
Permitted
Not permitted
Leverage limit
Distribution
Disclosure
Not specified
Tax
Page 11
Industry Focus
Property Fund/REIT Sector
Major sponsors
Major sponsors. The following table lists the major
sponsors of the assets for Thai PFPOs/REITs, together with
their current holdings. The top sponsors include TCC Land,
Central Pattana (CPN), Bangkok Land (BLAND), Ek-Chai
Distribution System (TESCO), TICON Industrial Connection
(TICON), and WHA Corporation (WHA).
Benefits to sponsors. Injecting their assets into PFPOs/REITs
is an alternative fund-raising exercise for these companies,
as it helps to unlock the value of their assets and most of
them normally recognise huge disposal gains. The proceeds
were normally used to finance their expansion plans or
Major sponsors of assets for Thai PFPOs/REITs and their current holdings
Sponsor
Company
CPN
TICON
Investment in
Fund
Mkt Cap
Holding
Mkt Value
(Btm)
(%)
(Btm)
CPNRF
36,948
27%
9,862
CPNCG
5,034
25%
1,259
TFUND
12,185
24%
2,878
TLOGIS
5,090
19%
980
TGROWTH
6,771
25%
1,713
TREIT
3,528
12%
440
WHAPF
10,705
15%
1,606
WHART
3,263
15%
489
HPF
3,995
23%
924
IMPACT
16,604
50%
8,302
TLGF
30,852
25%
7,713
FUTUREPF
9,638
33%
3,212
SPF
18,620
25%
4,674
TCIF
29,654
33%
9,786
TCIF
29,654
32%
9,513
TCIF
29,654
19%
5,631
TRIF
22,723
31%
6,930
Yodying Intertrade
TRIF
22,723
20%
4,440
THIF
30,916
33%
10,208
Panachai Panich
THIF
30,916
18%
5,432
CPTGF
9,670
33%
3,223
HEMRAJ
BLAND under:
Impact Exhibition
Ekchai Distribution (Tesco Lotus)
Rangsit Plaza
BA
TCC Group under:
CP Land
Page 12
Industry Focus
Property Fund/REIT Sector
Current status
Sector breakdown by asset ownership. The sector now
comprises 51 PFPOs and 5 REITs. Of the total, 40% hold
freehold assets, 42% hold leasehold assets, and 18% hold
both. For leasehold assets, the remaining leasehold life for
most funds is 20-30 years.
Leasehold
42%
Freehold
40%
NAV
(Btm)
TMB A.M.
8,023
One AM Fund
2,408
One AM Fund
972
MFC Fund
734
MFC Fund
2,220
Thanachart Fund
1,447
Phatra Asset
1,236
By
Phatra Asset
CIMB-Principal
A.M.
CIMB-Principal
A.M.
CIMB-Principal
A.M.
CIMB-Principal
A.M.
61
542
742
199
341
Page 13
Industry Focus
Property Fund/REIT Sector
Price Performance
Sector has yielded 13% average annual returns to investors
in last six years. This comprised about 6% price
appreciation and 7% distribution yield p.a. The total returns
are lower than the SET average return of 14% during the
same period, but the level of risk in investing in PFPO/REIT is
much lower. This is mainly because PFPO/REITs normally
invest in recurring income assets which generate steady cash
flows. In addition, it is strictly governed by the SEC to pay
out not less than 90% of net income. The borrowing limit
is also capped at 10% for PFPOs and 35% for REIT; there is
no limit for other stocks.
Total return of investing in Thai PFPO/REIT sector
40%
Distribution Yield
30%
Price Change
20%
10%
0%
-10%
2010
2011
2012
2013
2014
2015
-20%
Source: SET, DBS Vickers
SET
0.75
SET PF&REIT
Page 14
Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
0.70
SSPF
WHAPF
CPNCG
SPF
POPF
TGROWTH
QHOP
IMPACT
MIPF
QHPF
MJLF
UOB8TF
FUTUREPF
SIRIP
SPWPF
LUXF
PPF
TLGF
CPTGF
TIF1
WHART
TLOGIS
CPNRF
CRYSTAL
KPNPF
LHSC
TFUND
M-STOR
TTLPF
ERWPF
GOLDPF
JCP
SSTPF
CTARAF
M-PAT
DTCPF
TCIF
BKKCP
LHPF
SSTSS
QHHR
UNIPF
MNIT2
MNIT
M-II
THIF
MONTRI
HPF
TRIF
SBPF
URBNPF
TU-PF
MNRF
TNPF
AMATAR
TREIT
End-2014
(Bt)
5.20
9.90
10.30
17.30
11.80
10.90
3.82
10.20
18.50
9.25
12.20
8.20
17.00
10.00
9.30
5.10
10.20
12.40
9.40
7.00
10.00
11.80
16.10
9.70
9.80
10.20
10.40
10.60
19.00
9.60
5.35
10.00
9.40
3.96
9.85
8.55
13.50
9.75
8.60
9.70
8.45
9.80
8.25
3.00
10.00
12.70
9.80
9.50
16.20
9.00
5.15
2.20
8.55
8.70
11-Sep-15
(Bt)
9.55
11.40
11.80
19.60
13.30
12.20
4.24
11.20
20.00
9.95
13.10
8.80
18.20
10.70
9.95
5.45
10.90
13.20
10.00
7.35
10.50
12.30
16.70
10.00
10.00
10.40
10.60
10.70
19.10
9.60
5.35
10.00
9.40
3.94
9.80
8.50
13.40
9.55
8.40
9.45
8.20
9.45
7.90
2.86
9.50
11.80
8.80
8.50
14.30
7.65
4.24
1.74
6.60
4.90
11.10
10.30
Change
(%)
84%
15%
15%
13%
13%
12%
11%
10%
8%
8%
7%
7%
7%
7%
7%
7%
7%
6%
6%
5%
5%
4%
4%
3%
2%
2%
2%
1%
1%
0%
0%
0%
0%
-1%
-1%
-1%
-1%
-2%
-2%
-3%
-3%
-4%
-4%
-5%
-5%
-7%
-10%
-11%
-12%
-15%
-18%
-21%
-23%
-44%
nm
nm
Industry Focus
Property Fund/REIT Sector
Industry Outlook
Office Bright outlook
Favourable demand-supply situation. According to CBRE
(Thailand), the total supply of office space in Bangkok
increased by 86,000 sqm in 1H15 to 8.4m sqm. Among the
major Grade A Buildings completed was Bhiraj Tower at
Emquartier located on Sukhumvit Road, with a total lettable
area of 47,500 sqm. Occupancy rate remained flat at 90.7%
at end-1H15. Net take-up surged to 97,000 sqm in 1H15,
slightly exceeding the total new supply during the period. It
is estimated net take-up of office space for the whole of
2015 will exceed 200,000 sqm.
CBD
150,000
3,000,000
6%
2,000,000
4%
1,000,000
2%
0%
1H10
2H10
1H11
2H11
1H12
2H12
1H13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
Stock
Demand
Vacancy Rate
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F
2017F
8%
2016F
10%
4,000,000
2015F
12%
5,000,000
2014
6,000,000
50,000
2013
14%
2012
16%
7,000,000
2011
8,000,000
100,000
2010
18%
2009
9,000,000
Lettable
Area
(Sqm)
- 2H15
Major Tower, Thonglor 10
G-Land Tower, Rama 9
Bhiraj Tower, Sathorn
- 2016
The Metropolis, Sukhumvit 39
Bhiraj Tower, BITEC
FYI Center, Rama IV
M Tower, Sukhumvit 62
Rungrojthanakul 4, Ratchadapisek
- 2017
Shinawatra 4, Phaholyothin
Pearl Bangkok, Phaholyothin
Singha Complex, Asoke
Gaysorn Office Tower, Rajdamri
-2018
Whizdom 101, Sukhumvit 101
-2020 and beyond
Super Tower, Rama 9
SJ Infinite II, Bangna KM 7
The Bangkok Mall, Bangna
Suan Lum Night Bazaar, Rama IV
Completion
10,405
65,630
27,000
3Q15
4Q15
2015
13,540
31,880
48,095
9,990
15,705
1Q16
2Q16
4Q16
4Q16
4Q16
13,060
n.a.
36,000
19,500
1Q17
2017
1Q17
2Q17
30,000
2018
94,000
30,000
100,000
137,500
2020
n.a.
n.a.
n.a.
Page 15
Industry Focus
Property Fund/REIT Sector
16%
14%
12%
10%
8%
6%
4%
2%
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
Hong Kong
Singapore
Beijing
Shanghai
Seoul
Stock
Demand
Jakarta
2017F
2016F
2015F
2014
2013
2012
2011
2010
0%
Guangzhou
Vacancy Rate
Bangkok
Phnom Penh
Kuala Lumpur
150
200
1,000
%
9.0
900
800
8.0
700
7.0
600
6.0
500
5.0
POPF
CPTGF
QHPF
CPNCG
BKKCP
2Q2015
KPNPF
MIPF
Non-CBD Grade B
TCIF
Non-CBD Grade A
1.0
JCP
CBD Grade B
2.0
SSPF
CBD Grade A
1Q2015
4Q2014
3Q2014
2Q2014
1Q2014
4Q2013
3Q2013
2Q2013
1Q2013
4Q2012
3Q2012
2Q2012
1Q2012
4Q2011
3Q2011
3.0
2Q2011
4.0
300
1Q2011
400
Page 16
100
US$/sqm/month
50
Industry Focus
Property Fund/REIT Sector
100%
7,000,000
98%
96%
6,000,000
94%
5,000,000
92%
4,000,000
90%
3,000,000
88%
86%
2,000,000
84%
1,000,000
CentralPlaza WestGate
82%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
1H15
80%
Supply (Sqm)
Demand (Sqm)
Occupancy (RHS)
Page 17
Industry Focus
Property Fund/REIT Sector
Shanghai
Melbourne
120
110
100
90
80
70
60
50
40
Brisbane
Singapore
Beijing
Perth
Adelaide
Auckland
CCI Index
Mumbai
Delhi
Bangalore
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Chennai
Bangkok
Jakarta
Manila
0
-5%
-10%
1H15
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
TTLPF
0%
50
CRYSTAL
5%
LHSC
100
%
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
-
FUTUREPF
10%
TLGF
150
CPNRF
20%
15%
2001
20,000
TRIF
25%
200
Page 18
15,000
TNPF
10,000
250
5,000
Industry Focus
Property Fund/REIT Sector
Saraburi, 4%
Prachinburi,
2%
Chachoengsao,
1%
3,500,000
3,000,000
Nonthaburi,
1%
Pathum
Thani, 6%
25%
Supply
Occupied Space
Vacancy (RHS)
20%
2,500,000
15%
2,000,000
Chonburi,
30%
10%
1,500,000
Ayudhya,
16%
1,000,000
5%
500,000
Samut
Prakan, 21%
Rayong,
19%
0%
0
2011
2012
2013
2014
1H15
Btm/Sqm/Month
175
40%
10%
145
5%
140
0%
135
2015F
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
150
Eastern Seaboard
Pathum-Ayudhya
1H15
50,000
15%
2H14
100,000
SuvarnabhumiBangpakong
155
1H14
20%
150,000
160
2H13
25%
1H13
200,000
Eastern Bangkok
165
2H12
30%
170
1H12
35%
2H11
250,000
1H11
Supply
Demand
Vacancy
Page 19
Industry Focus
Property Fund/REIT Sector
%
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Page 20
TREIT
WHART
WHAPF
TLOGIS
SSTSS
SSTPF
PPF
MONTRI
HPF
TGROWTH
TIF1
TFUND
M-STOR
M-II
AMATAR
Industry Focus
Property Fund/REIT Sector
CPTGF
POPF
QHPF
Units (m)
427
967
482
797
Price (Bt)
11.80
10.00
13.30
9.95
5,034
9,670
6,406
7,930
140
269
178
220
Listing
21-Sep-12
16-Dec-13
12-Apr-11
12-Dec-06
TP (Bt)
12.50
10.80
14.00
n.a.
Upside
6%
8%
5%
n.a.
11.78
10.37
11.40
11.06
1.0
1.0
1.2
0.9
0.84
0.80
1.08
0.74
7.1%
8.0%
8.1%
7.5%
NAVps (Bt)
P/NAV (x)
DPU (Bt) - 2015
Div. Yield
0.88
0.86
1.11
n.a.
Div. Yield
7.5%
8.6%
8.3%
n.a.
IRR
8.5%
9.7%
8.6%
n.a.
Asset type
Office
Office
Office
Office
Asset
CentralWorld
CP Tower Silom
UBC II Tower
Q House Ploenchit
CP Tower Fortune
Town
CP Tower Phyathai
Ploenchit Center
Q House Lumpini
Nation Tower
Wave Place
0%
0%
0%
0%
100%
100%
100%
100%
17.3
28.2
22.8
19.5
80,604
70,293
125,184
115,678
4,765
9,660
5,491
7,194
59,119
137,421
43,860
62,193
5,197
9,626
5,754
7,837
Page 21
Industry Focus
Property Fund/REIT Sector
TLGF
Units (m)
2,212
2,337
530
390
488
Price (Bt)
16.70
13.20
18.20
10.00
10.4
36,948
30,852
9,638
3,900
5,076
1,026
857
268
108
141
Listing
23-Aug-05
19-Mar-12
07-Dec-06
27-Jun-13
26-Dec-14
TP (Bt)
18.00
15.1
22.27
11.44
11.40
Upside
8%
14%
22%
14%
10%
13.06
11.18
12.55
10.95
10.63
1.3
1.2
1.5
0.9
1.0
1.00
0.81
1.27
0.77
0.76
6.0%
6.1%
7.0%
7.7%
7.3%
NAVps (Bt)
P/NAV (x)
DPU (Bt) - 2015
Div. Yield
DPU (Bt) - 2016
FUTUREPF
CRYSTAL
LHSC
1.26
0.84
1.33
0.79
0.77
Div. Yield
7.6%
6.3%
7.3%
7.9%
7.4%
IRR
8.8%
7.4%
9.2%
9.3%
8.5%
Asset type
Retail
Retail
Retail
Retail
Retail
Central Rama 2
23 Tesco Lotus
malls
The Crystal
Terminal 21 Mall
Asset
Central Rama 3
Crystal Design
Center
Central Pinklao
Central Chiangmai
Airport
Ownership (by leasable area)
Freehold
Leasehold
Remaining leasehold life (yrs)
Leasable area (Sqm)
Cost (Bt)
Acquisition price (Bt/sqm)
Page 22
0%
60%
0%
0%
0%
100%
40%
100%
100%
100%
34.9
21.7
27.5
28.0
25.0
218,269
331,563
65,500
118,018
34,058
27,973
27,761
6,403
4,132
5,942
128,159
83,729
97,761
35,015
174,456
Industry Focus
Property Fund/REIT Sector
HPF
T REIT
WHA PF
WHA RT
T F UND T GROWT H
T L O GIS
Units (m)
358
470
343
939
311
1,150
555
414
Price (Bt)
11.10
8.50
10.30
11.30
10.60
10.60
12.20
12.30
3,973
3,995
3,528
10,611
3,294
12,185
6,771
5,090
110
111
98
295
92
338
188
141
30-J un-15
TP (Bt)
11.0
n.a.
10.4
11.6
11.0
11.0
12.9
11
Upside
-1%
n.a.
1%
3%
4%
4%
6%
-8%
NAV ps (Bt)
10.0
10.1
9.9
10.2
9.8
11.1
10.4
11.8
P/NAV (x)
1.1
0.8
1.0
1.1
1.1
1.0
1.2
1.0
0.4
0.7
0.6
0.7
0.8
0.6
0.9
0.7
7.6%
7.8%
6.1%
6.3%
7.6%
6.0%
7.6%
5.9%
0.8
n.a.
0.7
0.7
0.8
0.6
1.0
0.8
Div . Yield
DPU (Bt) - 2016
Div . Yield
7.5%
n.a.
7.2%
6.5%
7.2%
6.0%
7.9%
6.2%
IRR
9.3%
n.a.
10.3%
9.2%
9.4%
0.0%
8.1%
6.5%
F actories
F actories
Industrial
Industrial
Industrial
Industrial
Asset ty pe
Asset
Industrial Warehouses
F actories
30%
64%
65%
70%
61%
100%
100%
Leasehold
70%
36%
35%
30%
39%
0%
100%
30
n.a.
28-30
22.4
26
n.m.
28.5
n.a.
160,579
150,117
214,523
397,782
342,021
584,550
303,270
243,625
4,750
4,700
4,228
9,780
9,056
11,716
6,003
4,469
29,580
31,309
19,709
24,585
26,479
20,043
19,794
18,344
Page 23
Industry Focus
Property Fund/REIT Sector
MJ LF
SPF
Units (m)
1482.5
330
950
Price (Bt)
11.20
13.10
19.60
16,604
4,323
18,620
461
120
517
01-Oct-14
18-J ul-07
24-Nov -06
TP (Bt)
12
13.8
21.4
Upside
7%
5%
9%
10.79
12.16
11.08
1.0
1.1
1.8
0.71
1.01
1.30
6.4%
7.7%
6.6%
NAV ps (Bt)
P/NAV (x)
DPU (Bt) - 2015
Div . Yield
0.74
1.03
1.39
Div . Yield
6.6%
7.9%
7.1%
IRR
8.9%
7.8%
8.4%
Exhibition Center
Airport
Impact Arena
Samui Airport
Asset ty pe
Asset
Impact F orum
Major Rangsit
Challenger Hall
Ownership (by leasable area)
F reehold
Leasehold
Remaining leasehold life (yrs)
Leasable area (Sqm)
Cost (Bt)
Acquisition price (Bt/sqm)
Page 24
100%
100%
0%
0%
0%
100%
n.a.
30.8
21.0
122,165
45,194
n.a.
19,601
3,194
9,301
160,448
70,675
n.m.
Industry Focus
Property Fund/REIT Sector
Page 25
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
Low risks, high quality tenants. The main contracts with anchor
tenant C.P. group and its subsidiaries, Tesco Lotus, and public
sector clients, which cover 34%, 6% and 5% of total lettable
area, respectively, are subject to 10% rental reversion next
year. And, 52 other contracts which account for 9.4% of total
revenue are expiring in FY16 and subject to renewals at 5%
higher rents, at least.
209
10.7
189
10.2
169
9.7
149
129
9.2
109
8.7
8.2
Dec-13
89
69
May-14
Oct-14
Mar-15
Aug-15
2014A
1,307
1,169
727
733
0.75
nm
0.76
nm
10.31
13.2
7.6
1.0
0.0
N/A
2015F
1,348
1,208
757
771
0.78
4
0.80
5
10.35
12.7
8.0
1.0
0.0
7.6
2016F
1,452
1,301
824
833
0.85
9
0.86
8
10.36
11.7
8.7
1.0
0.0
8.2
2017F
1,469
1,316
869
843
0.90
6
0.87
1
10.39
11.1
8.8
1.0
0.0
8.7
N/A
B: 0
N/A
S: 0
N/A
H: 0
Valuation:
We value CPTGF at Bt10.80 based on DCF valuation (WACC:
6.8%).
Key Risks to Our View:
Key risks are (i) lower-than-expected rental reversion, and (ii)
weaker-than-expected occupancy rate.
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Btm/US$m)
Major Shareholders
CPL Group Pcl. (%)
KTB (%)
Social Security Office (%)
Free Float (%)
3m Avg. Daily Val (US$m)
ICB Industry : Financials / Real Estate Investment Trusts
967
9,670 / 269
33.3
15.0
15.0
50.6
0.20
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
VICKERS SECURITIES
Company Guide
CP Tower Growth Leasehold
Net Property Income and Margins (%)
800
92.9%
600
90.9%
400
88.9%
200
86.9%
84.9%
2014A
2015F
2016F
2017F
73%
45
72%
40
71%
35
30
70%
25
69%
20
68%
15
67%
10
65%
2Q2015
66%
1Q2015
4Q2014
Low risk with high profile tenants. The main contracts with
anchor tenant C.P. group and its subsidiaries, Tesco Lotus,
and public sector clients, which cover 34%, 6% and 5% of
total lettable area, respectively, are subject to 10% rental
reversion next year. And, 52 other contracts which account
for 9.4% of total revenue are expiring in FY16 and subject
to renewals at 5% higher rents, at least.
94.9%
1,000
3Q2014
96.9%
1,200
2Q2014
Earnings Drivers:
Invests in leasehold rights to three office buildings in
Bangkoks prime areas. These are successful office buildings
in good locations with 98% average occupancy rate. The
Funds assets include i) C.P. Tower I (Silom), ii) C.P. Tower II
(Fortune Town), iii) C.P. Tower III (Phayathai). With all of the
assets being in prime locations, the Fund stands to benefit
from future rental rate hikes. The remaining tenure of the
lease is about 29 years.
1,400 Bt m
1Q2014
0.5
0.0
2014A
2015F
2016F
2017F
-0.5
-1.0
-1.5
For retail space, the average occupancy rate for C.P. Tower I
and II were 99% and 97%, growing by 3.0% and 7.8%
CAGR, respectively. Occupancy at C.P. Tower III had risen
from 46.4% in 2010 to 100% in 2015, or at 8.4% CAGR.
Payout assumptions. We currently assumed 97%payout ratio
throughout our forecast period. CPTGF has paid Bt0.20
quarterly DPU in 1Q15 and 2Q15, respectively. In addition,
the fund has announced par reduction of Bt0.004 in both
1Q15 and 2Q15.
35,717
25,414
9,163
Occupancy rates
100%
92%
97%
9,075
46,528
7,850
Occupancy rates
98%
98%*
97%
ASIAN INSIGHTS
VICKERS SECURITIES
Page 27
Company Guide
CP Tower Growth Leasehold
ROE (%)
Balance Sheet:
Currently, the fund is debt-free.
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2015F
2016F
2017F
Key Risks:
Economic slowdown
Economic slowdown should result in weaker-than-expected
occupancy rate and slower-than-expected rental reversion,
which would limit the Funds growth, and hence, DPU.
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
COMPANY BACKGROUND
CPTGF is a property fund that invests in leasehold rights to
three office buildings in Bangkoks prime business areas with
a total leasable area of 132,191 sqm. The assets are C.P.
Tower I (Silom), C.P. Tower II (Fortune Town), and C.P.
Tower III (Phayathai). The key anchor tenants are C.P. group
and its subsidiaries, Tesco Lotus, and also public sector
clients, which cover 34%, 6% and 5% of total lettable area,
respectively.
3.0%
2014A
2015F
2016F
2017F
PB Band (x)
For the office rental space, CPTGF will renew the rental
contract and revise up the rental rate by 10% with the
tenants every 3 years
The fund was listed on the Stock Exchange of Thailand on
16 December 2013. The IPO price was Bt10.15/sh. C.P. Land
Public Company Limited is the funds sponsor, a major
shareholder with 33.33% stake, and the Property Manager.
Assets
Appraised
Value (Btm)
Remaining Leasehold
(Years)
3,979.86
28
C.P. Tower II
(Fortune Town)
4,752.29
28
853.90
28
ASIAN INSIGHTS
Page 28
VICKERS SECURITIES
Company Guide
CP Tower Growth Leasehold
Key Assumptions
FY Dec
C.P. Tower I (Silom)
Office rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
Retail rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
C.P. Tower II (Fortune)
Town)
Office rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
Retail rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
C.P. Tower III (Phayathai)
Office rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
Retail rental space
Leasable area (sqm)
Occupancy
Rents (bt/sqm/month)
Dividend payout ratio
2014A
2015F
2016F
2017F
35,716
99%
840
35,716
100%
840
35,716
100%
924
35,716
100%
924
7,792
98%
949
7,792
98%
996
7,792
98%
1046
7,792
98%
1088
25,413
93%
600
25,413
93%
600
25,413
93%
660
25,413
93%
660
46,528
99%
855
46,528
99%
895
46,528
99%
943
46,528
97%
978
9,162
99%
576
9,162
100%
576
9,162
100%
634
9,162
100%
634
7,850
98%
788
96%
7,850
98%
828
97%
7,850
98%
869
97%
7,850
98%
904
97%
2014A
2015F
2016F
2017F
1,307
(139)
1,169
(451)
3
7
3
730
0
0
0
730
727
14
733
1,348
(140)
1,208
(456)
3
2
0
757
0
0
0
757
757
0
771
1,452
(151)
1,301
(484)
3
3
0
824
0
0
0
824
824
0
833
1,469
(152)
1,316
(454)
3
4
0
869
0
0
0
869
869
0
843
N/A
nm
nm
95.8
89.4
55.8
56.1
3.1
3.4
3.8
97.0
89.6
56.2
57.2
7.7
7.7
8.7
97.0
89.6
56.7
57.4
1.2
1.2
5.5
97.0
89.6
59.2
57.4
34.5
33.8
33.3
30.9
N/A
N/A
N/A
NM
7.6
7.3
7.5
NM
8.2
7.9
8.2
NM
8.7
8.3
8.6
NM
ASIAN INSIGHTS
VICKERS SECURITIES
Page 29
Company Guide
CP Tower Growth Leasehold
4Q2014
1Q2015
2Q2015
329
(105)
224
(44)
1
0
0
182
0
0
182
182
10
192
326
(91)
236
(47)
0
3
2
194
0
0
194
194
7
201
332
(107)
225
(49)
1
3
3
182
0
0
182
182
7
189
333
(94)
238
(46)
1
2
(25)
171
0
0
171
171
34
205
341
(102)
239
(43)
1
1
31
230
0
0
230
230
(22)
208
3
(1)
5
68.2
94.8
(1)
5
7
72.2
95.2
2
(5)
(6)
67.7
95.3
0
6
(6)
71.6
97.3
3
0
34
70.1
96.7
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
9,651
0
561
0
64
80
10,355
9,651
0
649
0
66
43
10,408
9,651
0
715
0
71
8
10,444
9,651
0
747
0
71
8
10,477
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
64
322
0
0
9,969
0
10,355
0
66
332
0
0
10,010
0
10,408
0
71
356
0
0
10,016
0
10,444
0
72
360
0
0
10,045
0
10,477
(243)
561
(290)
649
(348)
715
(352)
747
1.8
1.6
0.0
NA
1.9
1.8
0.0
NA
1.9
1.8
0.0
NA
1.9
1.9
0.0
NA
ASIAN INSIGHTS
Page 30
VICKERS SECURITIES
Company Guide
CP Tower Growth Leasehold
2014A
2015F
2016F
2017F
Pre-Tax Income
Dep. & Amort.
Tax Paid
Associates &JV Inc/(Loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Net Invt in Properties
Other Invts (net)
Invts in Assoc. & JV
Div from Assoc. & JVs
Other Investing CF
Net Investing CF
Distribution Paid
Chg in Gross Debt
New units issued
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
730
0
0
0
(871)
(3)
(144)
0
(402)
0
0
0
(402)
(553)
0
(29)
0
(582)
0
(1,129)
757
0
0
0
93
0
850
0
0
0
0
0
0
(761)
0
0
0
(761)
0
89
824
0
0
0
59
0
883
0
0
0
0
0
0
(817)
0
0
0
(817)
0
65
869
0
0
0
4
0
873
0
0
0
0
0
0
(841)
0
0
0
(841)
0
33
0.8
(0.1)
0.8
0.9
0.9
0.9
0.9
0.9
ASIAN INSIGHTS
VICKERS SECURITIES
Page 31
18 Sep 2015
BUY
DIVIDEND HICCUP
Price Relative
Bt
Relative Index
212
20.4
192
18.4
172
16.4
152
132
14.4
112
12.4
10.4
Sep-11
92
Sep-12
Sep-13
Sep-14
72
Sep-15
2014A
3,185
3,024
3,211
2,684
1.62
(2)
1.33
8
12.52
10.3
7.9
1.3
6.4
14.1
2015F
2,948
2,776
3,483
2,373
1.57
(3)
1.00
(25)
13.02
10.6
6.0
1.3
6.0
12.3
2016F
3,616
3,414
3,004
3,004
1.36
(14)
1.26
27
13.18
12.3
7.6
1.3
6.0
10.4
2017F
3,970
3,715
3,297
3,297
1.49
10
1.39
10
13.32
11.2
8.3
1.3
5.3
11.2
0
1.17
B: 2
0
1.37
S: 1
0
1.43
H: 1
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
2,212
36,948 / 1,025
26.7
3.4
3.1
66.9
0.52
VICKERS SECURITIES
Company Guide
CPN Retail Growth Property Fund
Leasable
Occupancy
(%)
Dec-14
Mar-15
Area
(Sqm)
Jun-15
88,038
96.5
95.6
96.0
37,324
93.8
90.8
90.7
21,829
98.3
76.5
50.2
33,760
96.2
97.0
97.5
Central Chiangmai
37,307
98.9
97.5
96.7
218,258
96.6
93.4
90.9
Total
Rental Structure
Assets
3,500
Fixed
% of
Rate
Sales
52%
48%
71%
29%
95%
5%
100%
0%
72%
28%
102.5%
3,000
100.5%
2,500
98.5%
2,000
96.5%
1,500
94.5%
1,000
92.5%
500
90.5%
88.5%
2013A
2014A
2015F
2016F
2017F
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
2013A
2014A
2015F
2016F
2017F
ASIAN INSIGHTS
VICKERS SECURITIES
Page 33
Company Guide
CPN Retail Growth Property Fund
Balance Sheet:
Net debt amounted to Bt1.95bn, and net gearing reached
6.8% at end-2Q15. This is within the 10% maximum
gearing allowed for property funds.
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2013A
2014A
2015F
2016F
2017F
2016F
2017F
2016F
2017F
ROE (%)
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2013A
2014A
2015F
COMPANY BACKGROUND
CPNRF is Thailand's largest property fund by market CPNRF
is Thailand's largest property fund by market capitalisation.
The fund invests in leasehold rights to four retail assets with
a total gross area of 685,442 sqm and total leasable area of
218,258 sqm. The assets are CentralPlaza Rama 2,
CentralPlaza Rama 3, CentralPlaza Pinklao, and CentralPlaza
Chiangmai Airport. The remaining leasehold life of the
assets is currently 34.9 years. The fund was listed on the
Stock Exchange of Thailand on 23 August 2005. CPN is
the funds sponsor, a major shareholder with 26.7% stake,
and the Property Manager.
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
2013A
2014A
2015F
PB Band (x)
Appraised
Value
(Btm)
6,532
8,216
5,439
10,856
31,043
ASIAN INSIGHTS
Page 34
Remaining
Leasehold
(Years)
10.0
80.0
9.3
28.7
34.9
VICKERS SECURITIES
Company Guide
CPN Retail Growth Property Fund
Key Assumptions
FY Dec
Leasable Area (Sqm)
Occupancy
Occupied Area (Sqm)
Average rents
(Bt/sqm/month)
Rental growth
Total revenue (Btm)
Dividend payout
2013A
2014A
2015F
2016F
2017F
182,204
97.2%
177,054
1218.86
9%
2,590
93%
218,539
92.5%
202,194
1312.74
8%
3,185
98%
218,258
85.2%
186,000
1320.85
1%
2,948
93%
224,078
94.0%
210,724
1423.83
8%
3,600
93%
224,078
96.2%
215,553
1526.95
7%
3,950
93%
2013A
2014A
2015F
2016F
2017F
1,062
622
906
1,146
640
933
522
3,185
1,180
680
292
792
2,944
1,239
752
1,040
831
3,862
1,300
786
1,248
873
4,207
40%
23%
10%
27%
100%
32%
19%
27%
22%
100%
31%
19%
30%
21%
100%
Segmental Breakdown
FY Dec
Revenues (Bt m)
Central Rama 2
Central Rama 3
Central Pinklao
Central Chiangmai Airport
Total
Revenue Breakdown
Central Rama 2
Central Rama 3
Central Pinklao
Central Chiangmai Airport
Total
100%
36%
20%
29%
16%
100%
2013A
2014A
2015F
2016F
2017F
2,590
(176)
2,413
(357)
97
(1)
538
2,691
0
0
0
2,691
2,691
(538)
2,152
3,185
(161)
3,024
(409)
112
(43)
527
3,211
0
0
0
3,211
3,211
(527)
2,684
2,948
(172)
2,776
(476)
118
(44)
1,111
3,483
0
0
0
3,483
3,483
(1,111)
2,373
3,616
(203)
3,414
(486)
119
(43)
0
3,004
0
0
0
3,004
3,004
0
3,004
3,970
(254)
3,715
(505)
120
(34)
0
3,297
0
0
0
3,297
3,297
0
3,297
3.1
3.5
12.9
93.0
93.2
103.9
83.1
23.0
25.3
19.3
100.5
94.9
100.8
84.3
(7.4)
(8.2)
8.5
93.0
94.2
118.2
80.5
22.7
23.0
(13.8)
93.0
94.4
83.1
83.1
9.8
8.8
9.7
93.0
93.6
83.0
83.0
13.8
12.8
16.2
13.4
12.7
15.2
13.8
11.4
2,155.7
14.1
12.6
10.9
60.3
12.3
11.1
7.6
51.7
10.4
9.3
9.5
67.9
11.2
10.1
10.3
94.9
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Preference Dividend
Net Income After Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Dist. Payout Ratio (%)
Net Prop Inc Margins (%)
Net Income Margins (%)
Dist to revenue (%)
Managers & Trustees fees
to sales %)
ROAE (%)
ROA (%)
ROCE (%)
Int. Cover (x)
2,590
41%
24%
35%
Major renovation at
CentralPlaza Pinklao
ASIAN INSIGHTS
VICKERS SECURITIES
Page 35
Company Guide
CPN Retail Growth Property Fund
4Q2014
1Q2015
2Q2015
800
(28)
771
(107)
25
(9)
170
851
0
0
851
851
N/A
N/A
855
(28)
828
(111)
27
(16)
108
835
0
0
835
835
N/A
N/A
861
(30)
831
(134)
31
(15)
(38)
674
0
0
674
674
N/A
N/A
845
(27)
818
(136)
23
(15)
944
1,633
0
0
1,633
1,633
N/A
N/A
742
(28)
715
(132)
24
(17)
116
705
0
0
732
732
N/A
N/A
19
20
0
96.5
104.9
7
7
(2)
96.8
98.3
1
0
(19)
96.5
99.5
(2)
(2)
142
96.8
97.3
(12)
(13)
(55)
96.2
89.8
2013A
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
18,535
893
351
0
0
0
19,780
29,920
768
304
0
0
0
30,991
31,291
499
210
0
0
0
32,000
31,401
499
663
0
0
0
32,563
31,411
499
832
0
0
0
32,742
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
802
811
340
0
17,827
0
19,780
0
994
352
1,955
0
27,690
0
30,991
0
920
352
1,917
0
28,811
0
32,000
0
1,129
352
1,915
0
29,168
0
32,563
0
1,239
352
1,685
0
29,467
0
32,743
(1,613)
11
(1,346)
(1,651)
(1,272)
(1,707)
(1,481)
(1,252)
(1,591)
(853)
0.2
0.2
1.8
8.9
0.2
0.2
6.4
6.4
0.2
0.2
6.0
6.8
0.4
0.4
6.0
6.3
0.5
0.5
5.3
6.3
Stable gearing
ASIAN INSIGHTS
Page 36
VICKERS SECURITIES
Company Guide
CPN Retail Growth Property Fund
2013A
2014A
2015F
2016F
2017F
Pre-Tax Income
Dep. & Amort.
Tax Paid
Associates &JV Inc/(Loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Net Invt in Properties
Other Invts (net)
Invts in Assoc. & JV
Div from Assoc. & JVs
Other Investing CF
Net Investing CF
Distribution Paid
Chg in Gross Debt
New units issued
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
2,691
0
0
0
(32)
(538)
2,120
(97)
0
0
0
0
(97)
(1,990)
(95)
0
0
(2,085)
0
(62)
3,211
0
0
0
118
(527)
2,801
(10,742)
0
0
0
0
(10,742)
(2,480)
1,615
8,642
0
7,777
0
(163)
3,483
0
0
0
(74)
(1,111)
2,299
(260)
0
0
0
0
(260)
(2,363)
(38)
0
0
(2,401)
0
(363)
3,004
0
0
0
209
0
3,213
(110)
0
0
0
0
(110)
(2,647)
(2)
0
0
(2,649)
0
453
3,297
0
0
0
110
0
3,407
(10)
0
0
0
0
(10)
(2,998)
(230)
0
1
(3,227)
0
170
1.3
1.2
1.4
(4.0)
1.1
0.9
1.4
1.4
1.5
1.5
Acquisition of
CentralPlaza
Chiangmai Airport
Bt
S.No .
17.20
1:
2:
3:
4:
16.70
Ta rg e t
Pri c e
18.00
18.00
18.00
18.00
R a ti n g
Buy
Buy
Buy
Buy
2
16.20
Cl o s i n g
Pri c e
02 Mar 15
16.40
02 Apr 15
16.20
18 May 15
16.40
31 Aug 15
16.30
Da te
15.70
15.20
Sep-14
Jan-15
May-15
Not e : Share price and Target price are adjusted for corporate actions.
ASIAN INSIGHTS
VICKERS SECURITIES
Page 37
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
20.8
209
18.8
189
169
16.8
149
14.8
BUY with DCF-based TP of Bt22.30. Amid the current lowinterest-rate environment, the Fund offers attractive 7.1% yield
in FY15, higher than 10-year government bond yield of 2.65%
and dividend yield of 3.6% for DBS Thailand universe.
Supported by growing mall traffic, revenue growth should be
sustainable at c.3% p.a.
129
109
12.8
89
10.8
Sep-11
Sep-12
Sep-13
Sep-14
69
Sep-15
2014A
924
751
797
733
1.51
(2)
1.25
5
12.31
12.1
6.9
1.5
6.5
12.4
2015F
954
767
781
750
1.47
(2)
1.27
2
12.52
12.3
7.0
1.5
5.7
11.9
2016F
987
794
780
780
1.47
0
1.33
4
12.68
12.4
7.3
1.4
4.8
11.7
2017F
1,021
821
810
810
1.53
4
1.38
4
12.84
11.9
7.6
1.4
4.0
12.0
N/A
B: 0
N/A
S: 0
N/A
H: 0
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
Valuation:
We value FUTUREPF at Bt22.30, based on DCF valuation
(WACC: 6.9%, Terminal value of Bt0 at the end of 2041). Even
with conservative assumptions of 3% annual increase in rental
income and stable occupancy rate for most of the 27 years,
the Fund still offers 25% upside to our target price.
Key Risks to Our View:
Leases for 40% of the Funds leasable area will expire in FY16.
While we expect occupancy rate to be stable and rents to
increase by 3.5% next year, the extended economic slowdown
could result in lower-than-expected lease renewals and rental
hikes.
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Btm/US$m)
Major Shareholders
Rangsit Plaza Co Ltd (%)
Thai Tapioca Dev Institute (%)
Bangkok Bank Pcl (%)
Free Float (%)
3m Avg. Daily Val (US$m)
ICB Industry : Financials / Real Estate Investment Trusts
530
9,638 / 267
33.3
5.7
5.3
55.7
0.08
VICKERS SECURITIES
Company Guide
Future Park Leasehold Property Fund
Net Property Income and Margins (%)
Bt m
900
86.0%
600
84.0%
500
82.0%
400
300
80.0%
200
78.0%
100
0
76.0%
2013A
2014A
2015F
2016F
2017F
77%
10
76%
75%
74%
2Q2015
78%
15
1Q2015
79%
20
4Q2014
80%
25
3Q2014
81%
30
2Q2014
82%
35
1Q2014
83%
40
4Q2013
84%
45
3Q2013
50
2Q2013
88.0%
700
1Q2013
Earnings Drivers:
Traffic to remain healthy
Customer traffic has been increasing since 2006, except
during the heavy flooding in 2011 and 2013. Daily customer
count has risen from 122k in 2006 to 164k in 2014, and
peaked at 165k in 1Q15. However, traffic fell 10% q-o-q to
148k in 2Q15 because of renovation work at Centrals mall
and part of Robinsons (total leasable area of 1,936 sqm)
from 20 April to 30 September 2015. Customer count is
expected to normalize to above 160k in 4Q15 and 2016.
800
ASIAN INSIGHTS
VICKERS SECURITIES
Page 39
Company Guide
Future Park Leasehold Property Fund
Balance Sheet:
As of end-2Q15, FUTUREPF had Bt450m debt, representing
only 6.8% of NAV and 60% of FY15F net investment income.
The fund is scheduled to repay Bt60m every year, so the debt
will be fully repaid by 2022.
Share Price Drivers:
High yield in the low-rate environment
FUTUREPF is offering attractive 7.1-7.4% yields in FY15FFY16F, compared to 2.65% yield for 10-year government
bonds and 3.6-3.9% dividend yield for stocks under DBS
Thailand coverage (75% of the SETs market cap).
ROE (%)
12.0%
Key Risks:
Non-renewal of leases
Leases for 40% of the Funds leasable area will expire in
FY16. While we expect occupancy rate to be stable and
rents to increase by 3.5% next year, the extended economic
slowdown could result in lower-than-expected lease
renewals and rental hikes.
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2013A
COMPANY BACKGROUND
FUTUREPF is a property fund and part owner of the lease to
Future Park Rangsit, a shopping mall in Rangsit, Bangkok,
Thailand. It collects rent from common (8,514 sqm) and
shopping (59,986 sqm) areas with a remaining leasehold life
of 27.5 years. The Fund has a solid track record of income
growth; revenue grew at a 3-year average of 11.6% despite
the political instability in FY14 (3.6% growth). Historically,
FUTUREPF raises rents by 2.5%-3.7% per year.
Ninety-three percent of the leases (shopping space only) are
under fixed-rate rental contracts while the rest 7% is under
revenue-sharing scheme.
2014A
2015F
2016F
2017F
PB Band (x)
ASIAN INSIGHTS
Page 40
VICKERS SECURITIES
Company Guide
Future Park Leasehold Property Fund
Key Assumptions
FY Dec
2013A
2014A
2015F
2016F
2017F
56,906
98%
56,986
97%
56,986
98%
56,986
98%
56,986
98%
8,514 86% 8,514 85% 8,514 87% 8,514 87% 8,514 88%
1,332
10.7%
892
1,393
4.5%
924
1,423
2.2%
954
1,473
3.5%
987
1,524
3.4%
1,021
2013A
2014A
2015F
2016F
2017F
892
(178)
713
(14)
11
(17)
117
811
0
0
0
811
811
(117)
683
924
(173)
751
(14)
11
(15)
64
797
0
0
0
797
797
(64)
733
954
(187)
767
(14)
11
(14)
31
781
0
0
0
781
781
(31)
750
987
(193)
794
(15)
11
(11)
0
780
0
0
0
780
780
780
1,021
(200)
821
(15)
11
(8)
0
810
0
0
0
810
810
810
10.7
10.7
10.2
91.8
80.0
91.0
70.3
3.6
5.3
(1.7)
90.2
81.3
86.3
71.5
3.3
2.2
(2.0)
90.0
80.4
81.9
70.8
3.5
3.5
(0.2)
90.0
80.4
79.0
71.1
3.4
3.4
3.9
90.0
80.4
79.3
71.4
1.5
1.5
1.5
1.5
1.5
13.0
11.3
10.3
41.7
12.4
10.9
10.6
48.9
11.9
10.6
10.8
54.1
11.7
10.5
11.1
72.7
12.0
10.9
11.4
107.2
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Preference Dividend
Net Income After Tax
Total Return
Less: Non-cash gain
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Dist. Payout Ratio (%)
Net Prop Inc Margins (%)
Net Income Margins (%)
Dist to revenue (%)
Managers & Trustees fees
to sales %)
ROAE (%)
ROA (%)
ROCE (%)
Int. Cover (x)
ASIAN INSIGHTS
VICKERS SECURITIES
Page 41
Company Guide
Future Park Leasehold Property Fund
4Q2014
1Q2015
2Q2015
226
(41)
186
(4)
1
(4)
1
181
0
0
181
181
N/A
180
233
(39)
194
(3)
4
(4)
30
221
0
0
221
221
N/A
191
236
(49)
187
(4)
2
(3)
2
184
0
0
184
184
N/A
182
236
(45)
191
(3)
1
(3)
31
216
0
0
216
216
N/A
186
228
(43)
186
(4)
2
(3)
4
185
0
0
185
185
N/A
181
(1)
1
(14)
82.1
90.1
3
4
22
83.2
90.2
1
(4)
(17)
79.2
90.2
0
2
17
81.1
90.1
(3)
(3)
(14)
81.3
90.9
2013A
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
6,754
N/A
487
0
41
12
7,294
6,820
N/A
490
0
44
12
7,366
6,851
N/A
488
0
44
12
7,394
6,851
N/A
516
0
41
12
7,419
6,851
N/A
544
0
41
12
7,447
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
62
350
510
0
6,372
0
7,294
0
25
372
450
0
6,519
0
7,366
0
25
351
390
0
6,629
0
7,394
0
25
351
330
0
6,713
0
7,419
0
25
351
270
0
6,801
0
7,447
(359)
(23)
(341)
40
(320)
98
(324)
186
(324)
274
1.3
1.3
7.4
0.0
1.4
1.3
6.5
0.0
1.4
1.4
5.7
0.0
1.5
1.5
4.8
0.0
1.6
1.6
4.0
0.0
ASIAN INSIGHTS
Page 42
VICKERS SECURITIES
Company Guide
Future Park Leasehold Property Fund
2013A
2014A
2015F
2016F
2017F
811
0
0
0
(33)
(117)
661
(9)
(161)
0
0
0
(169)
(526)
(60)
0
0
(587)
0
(95)
797
0
0
0
(18)
(64)
715
(2)
(11)
0
0
0
(13)
(650)
(60)
0
0
(710)
0
(8)
781
0
0
0
(21)
(31)
729
0
(30)
0
0
0
(30)
(671)
(60)
0
0
(731)
0
(33)
780
0
0
0
4
0
783
0
(20)
0
0
0
(20)
(695)
(60)
0
0
(755)
0
8
810
0
0
0
0
0
810
0
(20)
0
0
0
(20)
(722)
(60)
0
0
(782)
0
8
1.3
1.2
1.4
1.3
1.4
1.4
1.5
1.5
1.5
1.5
ASIAN INSIGHTS
VICKERS SECURITIES
Page 43
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
12.6
206
12.1
186
11.6
166
11.1
146
10.6
126
10.1
106
9.6
9.1
Sep-14
86
Dec-14
Mar-15
Jun-15
2015A
1,110
725
632
632
628
0.43
0.42
nm
nm
0.42
0.42
10.80
26.3
26.5
nm
27.5
3.8
1.0
0.2
N/A
2016F
1,790
1,303
1,111
1,110
1,110
0.75
0.75
76
77
0.75
0.71
10.82
15.0
15.0
15.7
15.3
6.4
1.0
0.2
6.9
2017F
1,861
1,347
1,154
1,154
1,154
0.78
0.78
4
4
0.78
0.74
10.87
14.4
14.4
14.3
14.7
6.6
1.0
0.2
7.2
N/A
B: 0
N/A
S: 0
N/A
H: 0
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
1,483
16,604 / 461
50.00
2.93
2.23
48.3
0.35
VICKERS SECURITIES
Company Guide
Impact Growth Real Estate Investment Trust
ARR
NAV
ASIAN INSIGHTS
VICKERS SECURITIES
Page 45
Company Guide
Impact Growth Real Estate Investment Trust
Balance Sheet:
Investment properties accounted for 96% of total assets at
the end of June. The properties will be revalued annually. The
REIT has a strong balance sheet with a low leverage ratio of
0.24x at end June, represented by Bt3.9bn long-term loans.
However, leverage could surge if the REIT decides to finance
2016 acquisitions with debt. Since incorporation, the fund
has paid out an average of 96% of distributable earnings
with total amount of Bt0.595 per unit, and the management
plans to retain this.
Share Price Drivers:
Improvement in overall occupancy rate. The REITs average
occupancy rate is still not stable (55% in FY14, 49% in 1Q15)
and could miss its latest target of 58-63%. Hence, occupancy
rate will be a key revenue and earnings driver in the future.
Key Risks:
Slowing economy, political turmoil and safety issues. These
could lead to lower occupancy rates at the REITs assets,
which would reduce investment income.
ROE (%)
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
COMPANY BACKGROUND
IMPACT is one of Thailands leading property funds. The
Fund has invested in IMPACT Muang Thong Thani, the
largest exhibition and convention center in South East Asia,
covering a total exhibition area of over 122,165 sqm. The
REITs assets are i) IMPACT Arena, ii) IMPACT Forum, iii)
IMPACT Exhibition Hall 1-8, and iv) IMPACT Challenger.
Customers of the REIT can be split into three main
segments: Public Sector, Domestic Private Sector and
International Private Sector.
The REITs revenue is driven by occupancy rate which can be
affected by economic, political and safety issues, and rental
rates. The REIT absorbs the operating expenses and the fund
management fees and capital expenditures, but the REITs
profit is exempted from tax. The REIT is able to acquire new
assets in the future in accordance with regulations.
2016F
2017F
PB Band (x)
ASIAN INSIGHTS
Page 46
VICKERS SECURITIES
Company Guide
Impact Growth Real Estate Investment Trust
Key Assumptions
FY Mar
2013NA
2014NA
2015A
2016F
2017F
54.6%
13.6%
15.2%
99%
54.8%
13.6%
13.7%
95%
54.8%
13.6%
14.2%
95%
54.8%
13.6%
21.3%
95%
54.8%
13.6%
22.9%
95%
2015A
2016F
2017F
1,110
(151)
959
(237)
722
3
0
(97)
4
632
0
0
0
632
628
725
1,790
(243)
1,547
(246)
1,300
3
0
(193)
0
1,111
0
0
0
1,110
1,110
1,303
1,861
(253)
1,609
(265)
1,343
3
0
(193)
0
1,154
0
0
0
1,154
1,154
1,347
N/A
nm
nm
nm
61.3
79.9
80.2
76.9
4.0
3.3
3.3
3.9
86.4
65.0
56.9
N/A
N/A
N/A
96.4
7.5
86.4
72.7
62.0
6.9
5.4
6.5
95.0
6.7
86.4
72.2
62.0
7.2
5.6
6.7
95.0
7.0
ASIAN INSIGHTS
VICKERS SECURITIES
Page 47
Company Guide
Impact Growth Real Estate Investment Trust
3Q2015
4Q2015
1Q2016
4
(1)
3
(4)
0
1
0
0
0
1
0
0
1
1
1
561
(78)
483
(91)
393
1
0
(48)
2
347
0
0
347
345
394
545
(72)
472
(143)
329
1
0
(49)
2
284
0
0
284
282
330
497
(71)
427
(116)
310
1
0
(47)
2
266
0
0
266
264
311
N/A
nm
nm
nm
13,858.5
56,560.7
nm
44,943.4
(2.9)
(16.2)
(16.2)
(18.5)
(8.7)
(5.9)
(5.7)
(6.2)
86.7
(1.7)
19.1
86.1
70.0
61.9
86.7
60.4
52.1
85.8
62.4
53.5
2015A
2016F
2017F
19,603
0
0
607
0
180
14
20,404
19,603
0
0
590
0
291
0
20,484
19,603
0
0
663
0
302
0
20,568
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
0
79
335
3,900
84
16,005
0
20,404
0
0
541
3,900
0
16,043
0
20,483
0
0
562
3,895
0
16,111
0
20,568
(221)
(3,293)
N/A
N/A
N/A
NM
1.9
1.9
0.2
0.2
0.0
NA
(250)
(3,310)
48.0
59.7
N/A
0.1
1.6
1.6
0.2
0.2
0.0
NA
(260)
(3,232)
58.1
N/A
N/A
0.1
1.7
1.7
0.2
0.2
0.0
NA
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (Pre-ex) (%)
Margins
Gross Margins (%)
Opg Profit Margins (%)
Net Profit Margins (%)
Balance Sheet (Bt m)
FY Mar
ASIAN INSIGHTS
Page 48
VICKERS SECURITIES
Company Guide
Impact Growth Real Estate Investment Trust
2015A
2016F
2017F
632
0
0
0
(18,355)
(4)
(17,727)
0
(402)
0
0
0
(402)
(341)
3,900
15,715
0
19,274
0
1,144
0.4
(12.0)
1,111
0
0
0
(55)
0
1,056
0
0
0
0
0
0
(1,073)
0
0
0
(1,073)
0
(17)
0.7
0.7
1,154
0
0
0
10
0
1,164
0
0
0
0
0
0
(1,086)
(5)
0
0
(1,090)
0
73
0.8
0.8
ASIAN INSIGHTS
VICKERS SECURITIES
Page 49
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
204
11.6
184
11.1
164
10.6
144
10.1
124
9.6
104
9.1
Dec-14
84
Mar-15
Jun-15
2014A
26
13
12
0
0.02
nm
0.00
nm
10.22
424.2
0.0
1.0
18.2
N/A
2015F
1,036
442
400
372
0.82
3,242
0.76
nm
10.28
12.7
7.3
1.0
18.2
8.0
2016F
1,048
447
402
373
0.82
0
0.77
0
10.34
12.6
7.4
1.0
18.2
8.0
2017F
1,056
450
405
377
0.83
1
0.77
1
10.40
12.5
7.4
1.0
18.2
8.0
N/A
B: 0
N/A
S: 0
N/A
H: 0
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
488.06
4,978 / 138
9.0
6.0
6.0
72.9
0.07
VICKERS SECURITIES
Company Guide
LH Shopping Centers Leasehold
Earnings Drivers:
Higher ARR (Average Rental Rate). The leases are divided into
two types: (i) fixed rate contracts which accounts for 85% of
total rental income, and (ii) variable rate contracts which are
mostly signed with the F&B and cinema operators. The fixedrate contracts are normally for one to three years, with a rent
review upon renewal. The variable-rate contracts are linked to
the revenues generated by the lessees. We expect overall ARR
to increase by 10% every three years.
High occupancy rates. The REITs portfolio occupancy rate is
currently at 98% of total leasable space with 588 lessees. We
expect occupancy rate to be stable or reach 100% in some
months, because the convenient access and stylish interior
design of the property will attract both local customers and
tourists. Hence, earnings growth should remain relatively
stable in the near future.
Area breakdown
ASIAN INSIGHTS
VICKERS SECURITIES
Page 51
Company Guide
LH Shopping Centers Leasehold
Balance Sheet:
Investment properties accounted for 90% of the REITs total
assets end June. The REITs leverage ratio is only 0.11x,
represented by Bt1.1bn long-term loans. The low leverage,
indicates a strong balance sheet. The REIT has no plans to
acquire new assets in the near-term, which means net
gearing will drop as the REIT starts to repay the loan. Since
incorporation in December 2014, the REIT payout has been
c.90% of distributable earnings, or Bt0.022 per unit, implying
0.2% dividend yield (based on IPO price). The REIT will raise
dividend payout ratio to 95% in the future.
15.0%
14.0%
13.0%
12.0%
11.0%
10.0%
2014A
2015F
2016F
2017F
ROE (%)
7.0%
6.0%
5.0%
4.0%
Key Risks:
Political turmoil, safety issues and slowing economy. The
political and safety issues could lead to lower traffic at
Terminal 21, which could drive down occupancy rates. And
a slowing economy would make it challenging for the REIT
to increase rents. These would reduce investment income.
3.0%
2.0%
1.0%
0.0%
2015F
2016F
2017F
COMPANY BACKGROUND
LH Shopping Centers Leasehold Real Estate Investment Trust
(LHSC) was founded in December 2014 with total registered
capital of Bt4.978bn.
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2014A
2015F
2016F
2017F
PB Band (x)
Land and House PCL, GIC Private Limited and Social Security
Office are the major unit shareholders with 9%, 6% and
6% stake, respectively.
Source: Company, DBS Vickers
ASIAN INSIGHTS
Page 52
VICKERS SECURITIES
Company Guide
LH Shopping Centers Leasehold
Key Assumptions
FY Dec
2014A
2015F
2016F
2017F
31,622
1,760
98%
45%
0%
31,622
2,112
98%
37%
93%
31,622
2,112
98%
37%
93%
31,622
2,112
98%
37%
93%
2014A
2015F
2016F
2017F
26
(13)
13
0
0
(1)
0
12
0
0
0
12
14
0
14
1,036
(594)
442
(3)
2
(40)
0
400
0
0
0
400
400
0
400
1,048
(601)
447
(3)
2
(44)
0
402
0
0
0
402
402
0
402
1,056
(606)
450
(3)
2
(44)
0
405
0
0
0
405
405
0
405
N/A
nm
nm
0.0
49.9
45.2
0.0
3,811.5
3,245.2
3,242.4
93.0
42.6
38.6
35.9
1.2
1.2
0.4
93.0
42.6
38.3
35.6
0.7
0.7
0.9
93.0
42.6
38.4
35.7
1.6
0.3
0.3
0.3
N/A
N/A
N/A
15.7
8.0
6.0
6.9
10.9
8.0
6.0
6.9
10.1
8.0
6.0
6.9
10.2
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Preference Dividend
Net Income After Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Dist. Payout Ratio (%)
Net Prop Inc Margins (%)
Net Income Margins (%)
Dist to revenue (%)
Managers & Trustees fees
to sales %)
ROAE (%)
ROA (%)
ROCE (%)
Int. Cover (x)
ASIAN INSIGHTS
VICKERS SECURITIES
Page 53
Company Guide
LH Shopping Centers Leasehold
4Q2014
1Q2015
2Q2015
26
(13)
13
0
0
(1)
0
12
0
0
12
12
0
12
270
(153)
117
(3)
0
(10)
0
104
0
0
104
104
0
104
274
(159)
115
(3)
0
(10)
0
103
0
0
103
103
0
103
N/A
nm
nm
49.9
0.0
919
784
667
N/A
0.0
2
(1)
(1)
44.1
181.0
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
5,942
0
509
0
8
225
6,684
5,942
0
533
0
27
225
6,726
5,942
0
561
0
27
225
6,755
5,942
0
590
0
27
225
6,783
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
14
291
1,080
309
4,990
0
6,684
0
29
291
1,080
309
5,018
0
6,726
0
29
291
1,080
309
5,046
0
6,755
0
29
291
1,080
309
5,075
0
6,783
(72)
(571)
(68)
(547)
(68)
(519)
(68)
(490)
2.4
1.7
18.2
NA
2.5
1.8
18.2
NA
2.5
1.8
18.2
NA
2.6
1.9
18.2
NA
ASIAN INSIGHTS
Page 54
VICKERS SECURITIES
Company Guide
LH Shopping Centers Leasehold
2014A
2015F
2016F
2017F
Pre-Tax Income
Dep. & Amort.
Tax Paid
Associates &JV Inc/(Loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Net Invt in Properties
Other Invts (net)
Invts in Assoc. & JV
Div from Assoc. & JVs
Other Investing CF
Net Investing CF
Distribution Paid
Chg in Gross Debt
New units issued
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
12
0
0
0
381
0
393
(5,942)
(389)
0
0
0
(6,331)
0
1,080
4,978
0
6,058
0
120
400
0
0
0
(4)
0
396
0
0
0
0
0
0
(372)
0
0
0
(372)
0
24
402
0
0
0
0
0
401
0
0
0
0
0
0
(373)
0
0
0
(373)
0
28
405
0
0
0
0
0
405
0
0
0
0
0
0
(377)
0
0
0
(377)
0
28
0.0
(11.4)
0.8
0.8
0.8
0.8
0.8
0.8
ASIAN INSIGHTS
VICKERS SECURITIES
Page 55
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
16.4
210
15.4
190
14.4
170
13.4
150
12.4
130
11.4
110
10.4
90
9.4
8.4
Sep-11
Sep-12
Sep-13
Sep-14
70
Sep-15
2014A
689
481
422
395
0.82
(21)
1.04
2
11.48
16.2
7.8
1.2
7.4
8.4
2015F
922
665
546
546
1.13
38
1.08
3
11.55
11.7
8.1
1.2
7.3
9.8
2016F
964
679
561
561
1.17
3
1.11
3
11.61
11.4
8.3
1.1
6.9
10.1
2017F
1,019
715
595
595
1.24
6
1.17
6
11.69
10.8
8.8
1.1
6.5
10.6
1.06
B: 0
1.10
S: 0
N/A
H: 0
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
Convenient access
Both the UBC II Building and Ploenchit Center are located in
prime locations and accessible by BTS. And, Bangna Tower is
on Bangna Trad Road, one of the main transportation routes
for goods, and is only 20-km from Suvarnabhumi Airport.
Consequently, traffic at these assets is supported by easy
access.
Potential growth outlook
Portfolio occupancy has been sustainable at 96-99%, and
considering strong demand for the assets, the Fund expects
average rental rate to increase by 10-15% every three years.
Valuation:
We value POPF at Bt14.0, based on DCF valuation.
Key Risks to Our View:
Key risks are (i) a drop in occupancy rate, (ii) lower-thanexpected average rental rate, and (iii) non-renewal of leases.
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Btm/US$m)
Major Shareholders
Social Security Office (%)
SCB Life Assurance PCL (%)
MTLS (%)
Free Float (%)
3m Avg. Daily Val (US$m)
ICB Industry : Financials / Real Estate Investment Trusts
482
6,406 / 178
19.3
8.8
4.3
67.6
0.10
VICKERS SECURITIES
Company Guide
Prime Office Leasehold Property Fund
Earnings Drivers:
Leasehold rights to three buildings in prime locations. They
are (i) UBC II Building in Prompong, (ii) Ploenchit Center
Building at Ploenchit, and (iii) Bangna Tower. The buildings
are located in prime areas and along the main roads leading
into and out of Bangkok, and register high average
occupancy rates of 96-99%. The remaining tenures of the
lease are 10 - 29 years, which means they will continue to
generate revenues for that period. And, the diversified
location of the assets reduces concentration risk.
Healthy occupancy rate. The Funds portfolio occupancy rate
has been hovering at 96-99% of total leasable space in the
past few years. The Fund expects occupancy rate to be stable
because the convenient access and availability of full facilities
will continue to drive demand for the assets.
Average rental rate (ARR) hikes. ARR dropped in 4Q14
because the Fund had added Bangna Tower which
commands lower ARR than the other two assets because of
location. However, the Fund will be able to raise rents
regularly because the assets are in prime locations. We expect
growth to come from positive rental reversion which would
increase overall ARR by 10-15% every three years.
Strong facilities offering. The properties operated by the Fund
have full facilities, i.e. meeting rooms, catering rooms, fitness
facilities, parking lots, etc. One of the largest advantages is
sufficient parking lots for tenants and visitors; most of the
other office buildings in the Central Business District are
facing a shortage of parking space. In addition, the Fund has
kept parking fees stable so far; this suggests room to raise
fees (and income) when there is stronger demand for the
parking lots.
100
UBC II
100
Ploenchit Center
100
Bangna Tower
99
98 98
98
98 98
98
98
97
97
97
96
96
95
95
94
93
92
1Q14
2Q14
3Q14
4Q14
1Q15
ARR by property
Bt/sq.m.
800
717
697
711
700
611
589
590
1Q15
2Q15
600
500
400
300
200
100
1Q14
2Q14
3Q14
4Q14
800
700
95.4%
600
93.4%
500
91.4%
400
89.4%
300
87.4%
200
85.4%
100
83.4%
81.4%
2013A
2014A
2015F
2016F
2017F
NAV
Btm
6,000
NAV
5,529
5,563
5,594
2015F
2016F
2017F
5,000
4,000
3,818
3,875
3,000
2,000
1,000
0
ASIAN INSIGHTS
VICKERS SECURITIES
Page 57
Company Guide
Prime Office Leasehold Property Fund
Balance Sheet:
Investment properties accounted for 97% of the Funds total
assets at end June. Total borrowings amount to Bt455m
(long-term loan), implying low leverage at 0.08x. This
indicates a strong balance sheet and also complies with the
SECs property fund regulations. The Fund has no plans to
drawdown more loans. Hence, net gearing will improve as
the Fund repays the loan.
2014A
2015F
2016F
2017F
2016F
2017F
ROE (%)
18.0%
16.0%
14.0%
Key Risks:
Political unrest and slowing economy. Political unrest and a
slowing economy would make it challenging for the Fund to
increase rents, and could even drive down occupancy rates,
and in turn, rental income.
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2013A
COMPANY BACKGROUND
Prime Office Leasehold Property fund (POPF) was founded in
March 2011 and increased its capital in October 2014,
taking total registered capital to Bt5.03bn.
2015F
0.70
0.60
2014A
DPU
0.30
120%
110%
108%
99%
0.50
0.40
Payout ratio
100%
96%
80%
79%
0.28
0.28
0.30
0.26 0.26
0.22
0.24
0.26
0.30 0.29
60%
40%
0.20
20%
0.10
0.00
0%
1Q14
2Q14
3Q14
4Q14
1Q15
The major unit holders are Social Security Office, SCB Life
Assurance PCL and Muangthai Leasing PCL with 19%, 9%
and 3% stake, respectively.
ASIAN INSIGHTS
Page 58
VICKERS SECURITIES
Company Guide
Prime Office Leasehold Property Fund
Key Assumptions
FY Dec
2013A
2014A
2015F
2016F
2017F
76,695
684
99%
56%
127%
684
125,184
614
99%
58%
95%
614
125,184
642
98%
57%
95%
642
125,184
679
98%
57%
95%
679
125,184
702
98%
57%
92%
702
2013A
2014A
2015F
2016F
2017F
634
(206)
428
(91)
8
7
353
49
0
0
401
401
(49)
353
689
(209)
481
(97)
10
1
395
27
0
0
422
422
(27)
395
922
(257)
665
(115)
11
(15)
546
0
0
0
546
546
0
546
964
(285)
679
(117)
12
(12)
561
0
0
0
561
561
0
561
1,019
(304)
715
(121)
12
(11)
595
0
0
0
595
595
0
595
N/A
nm
nm
99.5
85.7
55.6
55.6
8.7
12.2
11.9
127.3
86.0
57.3
57.3
33.7
38.4
38.3
95.0
87.5
59.2
59.2
4.6
2.2
2.8
95.0
87.9
58.2
58.2
5.7
5.3
6.0
95.0
88.1
58.4
58.4
14.3
14.0
12.5
12.1
11.9
18.2
17.1
17.4
NM
8.4
7.5
7.8
NM
9.8
8.6
9.1
37.6
10.1
8.8
9.3
45.2
10.6
9.3
9.8
53.1
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Net Investment Income
Revaluation Gain
Minority Interest
Preference Dividend
Net Income After Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Dist. Payout Ratio (%)
Net Prop Inc Margins (%)
Net Income Margins (%)
Dist to revenue (%)
Managers & Trustees fees
to sales %)
ROAE (%)
ROA (%)
ROCE (%)
Int. Cover (x)
ASIAN INSIGHTS
VICKERS SECURITIES
Page 59
Company Guide
Prime Office Leasehold Property Fund
4Q2014
1Q2015
2Q2015
165
(51)
113
(22)
2
1
0
95
0
0
95
95
0
95
163
(54)
109
(22)
2
1
0
91
0
0
91
91
0
91
201
(56)
146
(32)
4
(3)
0
114
0
0
114
114
0
114
223
(48)
175
(31)
3
(4)
0
143
0
0
143
143
0
143
224
(54)
170
(32)
4
(5)
0
138
0
0
138
138
0
138
3
1
1
68.8
94.1
(1)
(4)
(5)
66.7
113.3
23
34
26
72.4
92.4
11
20
25
78.6
88.8
0
(3)
(4)
76.1
91.7
2013A
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
0
3,863
241
0
22
1
4,127
0
6,182
81
0
48
39
6,351
0
6,182
95
0
64
39
6,380
0
6,182
100
0
67
39
6,388
0
6,182
110
0
71
39
6,402
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
240
0
0
12
3,875
0
4,127
0
341
0
455
26
5,529
0
6,351
0
341
0
450
26
5,563
0
6,380
0
341
0
427
26
5,594
0
6,388
0
341
0
404
26
5,631
0
6,402
(217)
241
(254)
(374)
(238)
(356)
(235)
(327)
(231)
(295)
N/A
1.1
0.0
0.0
N/A
0.4
7.4
0.0
N/A
0.5
7.3
0.0
N/A
0.5
6.9
0.0
N/A
0.5
6.5
0.0
ASIAN INSIGHTS
Page 60
VICKERS SECURITIES
Company Guide
Prime Office Leasehold Property Fund
2013A
2014A
2015F
2016F
2017F
353
0
0
0
0
200
552
0
0
0
0
0
0
(344)
0
0
0
(344)
0
208
395
0
0
0
0
(2,242)
(1,847)
0
0
0
0
0
0
(373)
455
1,606
0
1,687
0
(159)
546
0
0
0
0
(16)
530
0
0
0
0
0
0
(512)
(5)
0
0
(517)
0
13
561
0
0
0
0
(3)
558
0
0
0
0
0
0
(530)
(23)
0
0
(553)
0
5
595
0
0
0
0
(4)
591
0
0
0
0
0
0
(558)
(23)
0
0
(581)
0
10
1.6
1.6
(3.8)
(3.8)
1.1
1.1
1.2
1.2
1.2
1.2
ASIAN INSIGHTS
VICKERS SECURITIES
Page 61
18 Sep 2015
BUY
Price Relative
Bt
Relative Index
22.0
20.0
204
18.0
184
16.0
164
14.0
144
12.0
124
104
10.0
8.0
Sep-11
Sep-12
Sep-13
Sep-14
84
Sep-15
2014A
1,216
1,216
1,178
1,185
1.24
(13)
1.25
0
11.03
15.8
6.4
1.8
0.0
11.2
2015F
1,263
1,263
1,231
1,231
1.30
5
1.30
4
11.04
15.1
6.6
1.8
0.0
11.7
2016F
1,355
1,355
1,323
1,323
1.39
7
1.39
7
11.07
14.1
7.1
1.8
0.0
12.6
2017F
1,448
1,448
1,415
1,415
1.49
7
1.49
7
11.09
13.2
7.6
1.8
0.0
13.4
1.30
B: 2
1.39
S: 0
1.49
H: 0
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CT
950
18,620 / 517
25.0
8.1
7.1
46.9
0.31
VICKERS SECURITIES
Company Guide
Samui Airport Property Fund
Monthly Passenger Volume and YoY Growth
Passenger Breakdown
ASIAN INSIGHTS
VICKERS SECURITIES
Page 63
Company Guide
Samui Airport Property Fund
Balance Sheet:
Balance sheet is strong with net a cash position and virtually
no debt. SPF has no operating expenses or capex, as these are
borne by Bangkok Airways, the Property Manager. The fund
has only annual fund expenses of about Bt40m. Hence, any
increases in revenue would flow directly to the bottom line.
The fund normally pays out 100% of cash profits every
quarter. Such distribution has been risen steadily since its
inception, in line with rising passenger and flight numbers.
Despite the political unrest in 2014 which has led to military
coup in May 2014, SPF managed to pay flat dividends as
compared to 2013.
Share Price Drivers:
Recovering tourism industry. Since the funds revenues and
profits are tied directly to Samui tourism, the strong tourist
recovery will be a key driver of both earnings and share price.
1Q and 3Q are normally high seasons for Samui tourism.
ROE (%)
12.0%
10.0%
8.0%
6.0%
Key Risks:
Political unrest. Political unrest, like what happened in 2014
which led to the implementation of martial laws, will affect
tourist arrivals to Thailand including Samui Airport, and
hence, revenues of the fund.
Reliance on a single asset. SPF relies on a single asset to
generate its revenues, which is Samui Airport, and tourism
on Samui.
COMPANY BACKGROUND
SPF is one of Thailand's leading property funds. The Fund
invests in leasehold rights to operate Samui Airport for 30
years (2006-2036). Bangkok Airways, the sponsor, has
voluntarily agreed to retain at least 25% stake in the fund
for 20 years in order to align its interests with the fund. BA
has 25.1% stake in the fund.
SPFs revenues correlate with the number of passengers and
flights flying from and to Samui Airport, based on the
following formula. All operating expenses and capital
expenditure are borne by the operator, Bangkok Airways.
This eliminates operating cost risks at the fund.
4.0%
2.0%
0.0%
2013A
2014A
2015F
2016F
2017F
2016F
2017F
2014A
2015F
PB Band (x)
Revenue
Sharing
Passenger revenue (per departing passenger)
Domestic
Bt300
International
Bt340
Flight revenue (per incoming flight)
Cressna
Dash 7
ATR72
Airbus/Boeing
ASIAN INSIGHTS
Page 64
Bt5,000
Bt10,000
Bt50,000
Bt80,000
VICKERS SECURITIES
Company Guide
Samui Airport Property Fund
Key Assumptions
FY Dec
No. of passengers (m)
Growth
Sharing (Bt/pax)
Domestic passengers
International passengers
Passenger rev (Btm)
Cabin factor
Operating hours/day
No. of flights p.a.:
ATR
Boeing/Airbus
Sharing:
ATR (Bt/flight)
Boeing (Bt/flight)
Div. Payout
Segmental Breakdown
FY Dec
2013A
2014A
2015F
2016F
2017F
1.1
9.0%
1.1
-1.6%
1.1
5.0%
1.2
7.0%
1.3
7.0%
300.0
320.0
332.2
80%
16.0
300.0
320.0
326.7
80%
16.0
300.0
330.0
348.0
80%
16.0
300.0
340.0
377.5
80%
16.0
300.0
340.0
403.9
80%
16.0
4,968
7,991
4,731
8,146
4,745
8,475
4,745
9,254
4,745
10,088
50,000
80,000
100%
50,000
80,000
100%
50,000
80,000
100%
50,000
80,000
100%
50,000
80,000
100%
2013A
2014A
2015F
2016F
2017F
Margins Trend
116.0%
111.0%
Revenues (Bt m)
Passenger revenue
Flight revenue
ATR
Boeing
Total flight revenue
Total revenue
Revenue breakdown
Passenger revenue
Flight revenue
ATR
Boeing
Total flight revenue
Total revenue
332
327
348
378
404
106.0%
248
639
888
1,220
237
652
888
1,215
237
678
915
1,263
237
740
978
1,355
237
807
1,044
1,448
101.0%
96.0%
91.0%
2013A
2014A
Operating Margin %
27%
27%
28%
28%
28%
20%
52%
73%
100%
19%
54%
73%
100%
19%
54%
72%
100%
18%
55%
72%
100%
16%
56%
72%
100%
2013A
2014A
2015F
2016F
2017F
1,221
0
1,221
(38)
0
9
168
1,359
0
0
0
1,359
1,359
(168)
1,191
1,216
0
1,216
(40)
0
9
(7)
1,178
0
0
0
1,178
1,178
7
1,185
1,263
0
1,263
(41)
0
9
0
1,231
0
0
0
1,231
1,231
0
1,231
1,355
0
1,355
(42)
0
10
0
1,323
0
0
0
1,323
1,323
0
1,323
1,448
0
1,448
(43)
0
10
0
1,415
0
0
0
1,415
1,415
0
1,415
8.3
8.3
37.6
99.7
96.9
111.3
97.6
(0.4)
(0.4)
(13.3)
100.0
96.7
96.9
97.5
3.9
3.9
4.5
100.0
96.8
97.5
97.5
7.3
7.3
7.4
100.0
96.9
97.6
97.6
6.9
6.9
7.0
100.0
97.0
97.7
97.7
2015F
2016F
2017F
3.1
3.3
3.2
3.1
3.0
13.1
13.0
11.3
NM
11.2
11.2
11.2
NM
11.7
11.7
11.6
NM
12.6
12.5
12.4
NM
13.4
13.4
13.3
NM
ASIAN INSIGHTS
VICKERS SECURITIES
Page 65
Company Guide
Samui Airport Property Fund
4Q2014
1Q2015
2Q2015
286
0
286
(10)
0
2
26
304
0
0
304
N/A
N/A
N/A
319
0
319
(10)
0
2
18
329
0
0
329
N/A
N/A
N/A
277
0
277
(10)
0
2
10
279
0
0
279
N/A
N/A
N/A
326
0
326
(10)
0
2
(58)
260
0
0
260
N/A
N/A
N/A
306
0
306
(10)
0
2
(28)
269
0
0
269
N/A
N/A
N/A
(15)
(15)
14
100.0
N/A
12
12
8
100.0
N/A
(13)
(13)
(15)
100.0
N/A
18
18
(7)
100.0
N/A
(6)
(6)
3
100.0
N/A
2013A
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
10,182
366
3
0
0
0
10,552
10,175
364
3
0
0
0
10,542
10,175
364
14
0
0
0
10,553
10,175
364
37
0
0
0
10,576
10,175
364
60
0
0
0
10,599
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
0
0
0
62
10,490
0
10,552
0
0
0
0
61
10,481
0
10,542
0
0
0
0
61
10,492
0
10,554
0
0
0
0
61
10,515
0
10,576
0
0
0
0
61
10,538
0
10,599
0
3
0
3
0
14
0
37
0
60
N/A
N/A
0.0
273.9
N/A
N/A
0.0
273.6
N/A
N/A
0.0
273.5
N/A
N/A
0.0
0.0
N/A
N/A
0.0
NA
No borrowings
ASIAN INSIGHTS
Page 66
VICKERS SECURITIES
Company Guide
Samui Airport Property Fund
2013A
2014A
2015F
2016F
2017F
Pre-Tax Income
Dep. & Amort.
Tax Paid
Associates &JV Inc/(Loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Net Invt in Properties
Other Invts (net)
Invts in Assoc. & JV
Div from Assoc. & JVs
Other Investing CF
Net Investing CF
Distribution Paid
Chg in Gross Debt
New units issued
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
1,359
0
0
0
(4)
(168)
1,188
0
(24)
0
0
0
(24)
(1,173)
0
0
0
(1,173)
0
(10)
1,178
0
0
0
3
7
1,188
0
(1)
0
0
0
(1)
(1,188)
0
0
0
(1,188)
0
0
1,231
0
0
0
(1)
0
1,230
0
0
0
0
0
0
(1,220)
0
0
0
(1,220)
0
11
1,323
0
0
0
0
0
1,323
0
0
0
0
0
0
(1,300)
0
0
0
(1,300)
0
23
1,415
0
0
0
0
0
1,415
0
0
0
0
0
0
(1,392)
0
0
0
(1,392)
0
23
1.3
1.3
1.2
1.3
1.3
1.3
1.4
1.4
1.5
1.5
No capex
Bt
20.05
S.No .
19.55
1:
2:
3:
4:
5:
6:
19.05
18.55
18.05
Cl o s i n g
Pri c e
10 Mar 15
17.40
20 Apr 15
17.40
15 May 15
17.70
21 May 15
17.70
22 Jul 15
18.70
25 Aug 15
18.60
Da te
Ta rg e t
Pri c e
19.50
18.80
18.80
18.90
21.40
21.40
R a ti n g
Buy
Buy
Buy
Buy
Buy
Buy
17.55
17.05
16.55
16.05
Sep-14
Jan-15
May-15
Not e : Share price and Target price are adjusted for corporate actions.
ASIAN INSIGHTS
VICKERS SECURITIES
Page 67
18 Sep 2015
BUY
DECENT YIELDS
Price Relative
Bt
Relative Index
221
16.4
201
15.4
181
14.4
161
13.4
12.4
141
11.4
121
10.4
101
9.4
Mar-12
Mar-13
Mar-14
Mar-15
Tesco Lotus Retail Growth Freehold and Leasehold Property
Fund (LHS)
Relative SET INDEX (RHS)
2014A
2,414
2,057
1,762
1,783
0.75
17
0.76
10
11.25
17.5
5.8
1.2
8.1
6.7
81
2015A
2,736
2,302
1,877
1,888
0.80
7
0.81
6
11.24
16.4
6.1
1.2
9.1
7.1
2016F
2,907
2,453
1,976
1,890
0.85
5
0.81
0
11.28
15.6
6.1
1.2
9.1
7.5
2017F
3,009
2,532
2,136
1,953
0.91
8
0.84
3
11.36
14.4
6.3
1.2
9.1
8.1
N/A
B: 4
N/A
S: 0
N/A
H: 1
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CT
2,337
30,852 / 856
25.0
8.2
7.2
59.7
0.46
VICKERS SECURITIES
Company Guide
Tesco Lotus Retail Growth Freehold and Leasehold
Property Fund
Revenue Breakdown (1Q15/16) (%)
2,500
91.9%
2,000
89.9%
87.9%
1,500
85.9%
1,000
83.9%
500
81.9%
79.9%
2013A
2014A
2015A
2016F
2017F
88%
45
87%
40
35
86%
30
25
85%
20
84%
15
10
83%
1Q2016
4Q2015
3Q2015
2Q2015
1Q2015
4Q2014
3Q2014
2Q2014
82%
1Q2014
4Q2013
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
2013A
2014A
2015A
2016F
2017F
ASIAN INSIGHTS
VICKERS SECURITIES
Page 69
Company Guide
Tesco Lotus Retail Growth Freehold and
Leasehold Property Fund
Balance Sheet:
Total borrowings amounted to Bt2.6bn, representing 9.8% of
its net asset value at end-1Q16.
Share Price Drivers:
Strong rental reversion. Strong rental reversion could lift
rental income and distribution per unit.
Converting to a REIT. The successful conversion would mean
the REIT can gear up more. It will then rely less on equity
financing. This should lift DPU and yields.
2014A
2015A
2016F
2017F
ROE (%)
8.0%
Key Risks:
Political unrest & slowing economy
Political unrest and a slowing economy could hurt consumer
confidence and delay spending, and in turn affect the
potential for rental rate hikes.
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2014A
2015A
2016F
2017F
7.0%
6.0%
5.0%
4.0%
COMPANY BACKGROUND
TLGF is a property fund that invests in freehold and
leasehold rights to 23 retail shopping malls in Thailand, with
Tesco Lotus as a key anchor tenant.
Ek-Chai Distribution System Co., Ltd. (Tesco Lotus) is the
sponsor, major unit holder with 25% stake, and the
Property Manager of the Fund.
3.0%
2.0%
2013A
2014A
2015A
2016F
2017F
PB Band (x)
ASIAN INSIGHTS
Page 70
VICKERS SECURITIES
Company Guide
Tesco Lotus Retail Growth Freehold and Leasehold
Property Fund
Key Assumptions
FY Feb
Leasable area (sqm)
Occupancy
Occupied area (sqm)
Rents (bt/sqm/month)
Total rents (Btm)
Dividend payout
2013A
2014A
2015A
2016F
2017F
312,438
99%
309,648
479
1,778
100%
314,097
99%
312,019
645
2,414
100%
334,453
99%
332,108
680
2,708
100%
336,453
99%
334,074
725
2,907
95%
336,453
99%
334,074
751
3,009
95%
2013A
2014A
2015A
2016F
2017F
587
925
249
18
1,778
771
1,300
323
20
2,414
790
1,555
342
21
2,708
869
1,657
360
22
2,907
869
1,740
377
23
3,009
33%
52%
14%
1%
100%
32%
54%
13%
1%
100%
29%
57%
13%
1%
100%
30%
57%
12%
1%
100%
29%
58%
13%
1%
100%
31%
41%
30%
10%
36%
2%
20%
6%
5%
12%
10%
7%
5%
5%
7%
0%
5%
5%
5%
4%
2013A
2014A
2015A
2016F
2017F
1,779
(275)
1,503
(301)
12
17
12
1,243
0
0
0
1,243
1,243
(538)
1,346
2,414
(357)
2,057
(459)
17
13
134
1,762
0
0
0
1,762
1,762
0
1,783
2,736
(435)
2,302
(497)
1
(68)
139
1,877
0
0
0
1,877
1,877
0
1,888
2,907
(454)
2,453
(404)
1
(74)
0
1,976
0
0
0
1,976
1,976
0
1,990
3,009
(477)
2,532
(326)
1
(72)
0
2,136
0
0
0
2,136
2,136
0
2,056
N/A
nm
nm
99.8
84.5
69.9
75.7
35.7
36.8
41.8
100.0
85.2
73.0
73.8
13.3
11.9
6.6
100.0
84.1
68.6
69.0
6.2
6.6
5.3
95.0
84.4
68.0
65.0
3.5
3.2
8.1
95.0
84.2
71.0
64.9
7.3
9.5
9.8
10.7
10.8
N/A
N/A
N/A
NM
6.7
6.3
5.8
NM
7.1
6.4
6.3
26.5
7.5
6.7
7.1
27.8
8.1
7.2
7.6
30.8
Segmental Breakdown
FY Feb
Revenues (Bt m)
Hypermarkets & food court
Long-term lease
Short-term lease
Others
Total
Revenue Breakdown
Hypermarkets & food court
Long-term lease
Short-term lease
Others
Total
Growth
Hypermarkets & food court
Long-term lease
Short-term lease
Others
Total
Income Statement (Bt m)
FY Feb
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Preference Dividend
Net Income After Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Dist. Payout Ratio (%)
Net Prop Inc Margins (%)
Net Income Margins (%)
Dist to revenue (%)
Managers & Trustees fees
to sales %)
ROAE (%)
ROA (%)
ROCE (%)
Int. Cover (x)
ASIAN INSIGHTS
VICKERS SECURITIES
Page 71
Company Guide
Tesco Lotus Retail Growth Freehold and
Leasehold Property Fund
Quarterly / Interim Income Statement (Bt m)
FY Feb
1Q2015
2Q2015
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Net Income after Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Net Prop Inc Margin (%)
Dist. Payout Ratio (%)
3Q2015
4Q2015
1Q2016
677
(90)
587
(119)
0
(21)
(0)
429
0
0
429
429
38
467
688
(93)
595
(120)
1
(21)
0
440
0
0
440
440
38
478
679
(90)
589
(121)
0
(21)
76
508
0
0
508
508
(38)
471
693
(101)
592
(138)
0
(22)
64
483
0
0
483
483
(28)
455
708
(101)
607
(92)
0
(22)
(1)
478
0
0
478
478
18
496
8
10
nm
86.7
N/A
2
1
nm
86.5
N/A
(1)
(1)
nm
86.8
N/A
2
1
nm
85.5
N/A
2
3
nm
85.7
N/A
2013A
2014A
2015A
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
24,964
716
1,072
0
0
0
26,752
27,469
593
1,029
0
0
0
29,091
28,043
473
1,070
0
0
0
29,586
28,153
380
1,010
0
0
0
29,543
28,263
380
1,113
0
0
0
29,755
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
0
433
0
0
26,319
0
26,752
0
0
510
2,284
0
26,298
0
29,091
0
0
719
2,591
0
26,276
0
29,586
0
0
581
2,600
0
26,362
0
29,542
0
0
595
2,600
0
26,560
0
29,755
(433)
1,072
(510)
(1,255)
(719)
(1,521)
(581)
(1,590)
(595)
(1,487)
2.5
2.5
0.0
58.6
2.0
2.0
8.1
27.4
1.5
1.5
9.1
26.1
1.7
1.7
9.1
26.4
1.9
1.9
9.1
26.2
ASIAN INSIGHTS
Page 72
VICKERS SECURITIES
Company Guide
Tesco Lotus Retail Growth Freehold and Leasehold
Property Fund
Cash Flow Statement (Bt m)
FY Feb
Pre-Tax Income
Dep. & Amort.
Tax Paid
Associates &JV Inc/(Loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Net Invt in Properties
Other Invts (net)
Invts in Assoc. & JV
Div from Assoc. & JVs
Other Investing CF
Net Investing CF
Distribution Paid
Chg in Gross Debt
New units issued
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
2013A
2014A
2015A
2016F
2017F
1,243
170
0
0
(12)
108
1,509
(25,416)
0
0
0
(55)
(25,471)
(877)
0
25,442
0
24,565
0
603
1,762
230
0
0
(134)
34
1,892
(2,372)
12
0
0
(76)
(2,435)
(1,783)
2,284
0
0
501
0
(43)
1,877
230
0
0
(139)
167
2,134
(435)
8
0
0
(76)
(504)
(1,900)
308
0
0
(1,592)
0
39
1,976
94
0
0
0
(61)
2,009
(110)
0
0
0
(76)
(186)
(1,890)
9
0
0
(1,881)
0
(58)
2,136
0
0
0
0
90
2,226
(110)
0
0
0
(76)
(186)
(1,937)
0
0
0
(1,937)
0
102
0.8
(12.4)
0.9
(0.2)
1.0
0.7
0.9
0.8
1.0
0.9
Bt
S.No .
14.09
4
2
13.59
1:
2:
3:
4:
Cl o s i n g
Pri c e
19 Jan 15
13.00
01 Apr 15
13.50
06 May 15
13.50
15 Jul 15
13.70
Da te
Ta rg e t
Pri c e
15.10
15.10
15.10
15.10
R a ti n g
Buy
Buy
Buy
Buy
13.09
1
12.59
12.09
11.59
Sep-14
Jan-15
May-15
Not e : Share price and Target price are adjusted for corporate actions.
ASIAN INSIGHTS
VICKERS SECURITIES
Page 73
18 Sep 2015
BUY
BUY with DCF-based TP of Bt12.90. Amid the low-interestrate environment, the fund offers attractive annual yield of
c.8% over the next three years, higher than the current 2.65%
yield for Thai government bonds and 3.6% yield for stocks
under DBS coverage. It has a solid track record of healthy
occupancy rates and offers 16% total return (price upside +
dividend yield) at the current market price.
Price Relative
Bt
Relative Index
218
13.7
198
12.7
178
11.7
158
10.7
138
9.7
118
8.7
98
7.7
Dec-13
78
May-14
Oct-14
Mar-15
Valuation:
We value TGROWTH at Bt12.90, based on DCF valuation
(WACC: 7.1%, Terminal Value of Bt0 at the end of 2043).
Aug-15
2014A
593
534
531
516
0.96
nm
0.97
nm
10.26
12.7
7.9
1.2
8.1
N/A
2015F
601
543
523
523
0.94
(2)
0.93
(4)
10.28
13.0
7.6
1.2
7.4
9.2
2016F
624
562
541
541
0.98
4
0.97
4
10.30
12.5
7.9
1.2
6.7
9.5
2017F
625
563
544
544
0.98
1
0.97
1
10.31
12.4
8.0
1.2
6.0
9.5
0.80
B: 0
0.90
S: 0
0.90
H: 1
ASIAN INSIGHTS
www.dbsvickers.com
ed: SGC / sa: CS
555
6,771 / 188
25.3
11.4
11.4
25.1
0.09
VICKERS SECURITIES
Company Guide
TICON Industrial Growth Leasehold Property Fund
Net Property Income and Margins (%)
97.5%
500
95.5%
400
93.5%
300
91.5%
200
89.5%
100
87.5%
85.5%
2014A
2015F
ASIAN INSIGHTS
91%
35
90%
30
90%
25
89%
20
89%
15
88%
10
88%
87%
87%
2Q2015
91%
40
1Q2015
92%
45
3Q2014
50
2Q2014
2017F
1Q2014
2016F
4Q2014
Earnings Drivers:
Occupancy rates remain healthy
TGROWTHs operations have been resilient. Despite the
ongoing economic slowdown, its occupancy rate had
bottomed out in 2H14 at 93% (factory: 100%, warehouse:
88%) and rebounded in 1H15 to 96% (factory: 100%,
warehouse: 93%).
Bt m
1.0
0.9
0.8
0.7
0.6
0.5
0.4
2014A
2015F
2016F
2017F
VICKERS SECURITIES
Page 75
Company Guide
TICON Industrial Growth Leasehold
Property Fund
Balance Sheet:
At the end of 2014, TGROWTH had Bt460m debt, equivalent
to 8.1% of NAV. We expect debt to drop to Bt422m (7.4%
of NAV) by the end of this year, and the Fund to be debt-free
by 2026, assuming no acquisition of new rental assets.
4.0%
3.0%
2.0%
1.0%
0.0%
2014A
2015F
2016F
2017F
ROE (%)
9.0%
8.0%
Key Risks:
Domestic and global economic slowdown
The slower economy and high household debt could result
in extended weak automotive sales in Thailand; falling auto
production could make its autopart makers (33% of
TGROWTHs total leasable area) to downsize production
lines and warehouse space. Also, lackluster global growth
could hurt exports of electronics parts (20% of total leasable
area).
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2015F
2016F
2017F
COMPANY BACKGROUND
Ticon Industrial Growth Leasehold Property (TGROWTH)
owns rental warehouse and factories with total leasable
areas of 182k sqm and 121k sqm, respectively. The
remaining leasehold life of its assets is 28.5 years. All its
assets were developed by the SET-listed Ticon Industrial
Connection (TICON); TICON usually develops and holds
rental assets for a few years before selling them to its
network of property funds and REITs, including TLOGIS,
TFUND, TGROWTH and REIT.
The bulk of TGROWTHs leasable area is occupied by
Japanese corporations (61%), followed by Thais (8%),
Germans (7%) and French (6%). TGROWTHs warehouses
and factories are in industrial parks/estates in Ayutthaya,
Patumtani, Chonburi, Chachoengsao and Rayong.
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2014A
2015F
2016F
2017F
PB Band (x)
ASIAN INSIGHTS
Page 76
VICKERS SECURITIES
Company Guide
TICON Industrial Growth Leasehold Property Fund
Key Assumptions
FY Dec
Leasable area (sqm)
Warehouse
Factory
Total
Occupancy (%)
Warehouse
Factory
Total
2013A
2014A
2015F
2016F
2017F
182,095
104,225
286,320
182,095
121,175
303,270
182,095
121,175
303,270
182,095
121,175
303,270
182,095
121,175
303,270
100%
100%
100%
88%
100%
93%
93%
100%
96%
95%
100%
97%
95%
95%
95%
2014A
2015F
2016F
2017F
593
(59)
534
(14)
10
(14)
16
531
0
0
0
531
531
0
516
601
(59)
543
(13)
10
(17)
0
523
0
0
0
523
523
0
523
624
(62)
562
(13)
10
(17)
0
541
0
0
0
541
541
0
541
625
(62)
563
(13)
10
(15)
0
544
0
0
0
544
544
0
544
N/A
nm
nm
104.1
90.0
89.6
90.6
1.5
1.7
(1.6)
99.0
90.2
86.9
86.0
3.7
3.5
3.6
99.0
90.0
86.8
85.9
0.2
0.2
0.5
99.0
90.0
87.1
86.2
2.4
2.2
2.1
2.1
N/A
N/A
N/A
37.5
9.2
8.2
8.3
31.7
9.5
8.5
8.7
32.0
9.5
8.6
8.7
35.5
ASIAN INSIGHTS
VICKERS SECURITIES
Page 77
Company Guide
TICON Industrial Growth Leasehold
Property Fund
Quarterly / Interim Income Statement (Bt m)
FY Dec
2Q2014
3Q2014
Gross revenue
Property expenses
Net Property Income
Other Operating expenses
Other Non Opg (Exp)/Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Net Income
Tax
Minority Interest
Net Income after Tax
Total Return
Non-tax deductible Items
Net Inc available for Dist.
Growth & Ratio
Revenue Gth (%)
N Property Inc Gth (%)
Net Inc Gth (%)
Net Prop Inc Margin (%)
Dist. Payout Ratio (%)
4Q2014
1Q2015
2Q2015
151
(16)
135
0
7
(4)
0
138
0
0
138
135
N/A
135
147
(15)
132
1
0
(4)
15
144
0
0
144
139
N/A
124
147
(13)
134
0
0
(4)
0
130
0
0
130
126
N/A
126
147
(18)
130
0
1
(4)
0
127
0
0
127
123
N/A
123
147
(16)
131
0
0
(5)
0
127
0
0
127
123
N/A
122
3
2
6
89.4
97.0
(3)
(2)
4
89.8
105.7
0
1
(10)
90.9
98.9
0
(3)
(2)
88.0
101.4
0
1
0
88.9
100.0
2014A
2015F
2016F
2017F
Investment Properties
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
6,018
N/A
336
0
14
2
6,370
6,018
N/A
310
0
14
2
6,345
6,018
N/A
289
0
15
2
6,324
6,018
N/A
257
0
15
2
6,293
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Unit holders funds
Minority Interests
Total Funds & Liabilities
0
0
0
460
215
5,696
0
6,371
0
0
0
422
218
5,706
0
6,345
0
0
0
383
226
5,716
0
6,325
0
0
0
345
226
5,722
0
6,293
16
(124)
17
(112)
17
(94)
17
(88)
N/A
N/A
8.1
NA
N/A
N/A
7.4
NA
N/A
N/A
6.7
NA
N/A
N/A
6.0
NA
ASIAN INSIGHTS
Page 78
VICKERS SECURITIES
Company Guide
TICON Industrial Growth Leasehold Property Fund
2014A
2015F
2016F
2017F
531
0
0
0
(55)
(16)
461
(460)
(296)
0
0
0
(756)
(412)
460
0
0
48
0
(248)
523
0
0
0
3
0
526
0
96
0
0
0
96
(513)
(38)
0
0
(551)
0
71
541
0
0
0
8
0
549
0
0
0
0
0
0
(531)
(38)
0
0
(570)
0
(21)
544
0
0
0
0
0
544
0
0
0
0
0
0
(538)
(38)
0
0
(576)
0
(32)
0.9
0.0
0.9
0.9
1.0
1.0
1.0
1.0
ASIAN INSIGHTS
VICKERS SECURITIES
Page 79
Industry Focus
Property Fund/REIT Sector
DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10 to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or
risk assessments stated therein.
Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)
mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to
the commodity referred to in this report.
DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research
department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months.
ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her
compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the
report is published, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the
securities recommended in this report (interest includes direct or indirect ownership of securities, directorships and trustee positions).
COMPANY-SPECIFIC / REGULATORY DISCLOSURES
DBS Vickers Securities (Thailand) Co., Ltd. and its subsidiaries do not have a proprietary position in the mentioned company as of
1.
17 Sep 2015.
DBSVT, DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, may beneficially own a total of 1% or more of any
2.
class of common equity securities of the mentioned company as of 18 Sep 2015.
Page 80
Industry Focus
Property Fund/REIT Sector
3.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment
banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further
information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed
in this document should contact DBSVUSA exclusively.
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Distribution of this report is intended only for wholesale investors within the meaning of the CA.
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This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
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rd
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Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in
compliance with any applicable U.S. laws and regulations. . It is being distributed in the United States by DBSVUSA, which
accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any
securities referred to herein should contact DBSVUSA directly and not its affiliate.
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jurisdictions
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
th
th
th
DBS Vickers Securities (Thailand) Co., Ltd. 989 Siam Tower, 9 , 14 -15 Floor,
Rama 1 Road, Pathumwan, Bangkok Thailand 10330
Tel. 66 2 657 7831, Fax: 66 2 658 1269
Page 81