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SINGAPORECompany
CompanyUpdate
Report Results MITA No.MITA No. 010/06/2009
013/06/2010
18 February 2011
Maintain
First REIT
BUY
Previous Rating: HOLD Stability in times of risk aversion
Current Price: S$0.74
Fair Value: S$0.82 Providing stability amidst uncertain times. We believe that
First REIT's (FREIT) stability makes it an attractive investment
thesis amidst such times of uncertainty. Growth is driven
largely by Indonesia's private healthcare sector, which is
3500
STI
0.8 relatively inelastic in demand. Recall that FREIT performed
3000
2500
0.7 decently in its recent FY10 results. Gross revenue increased
2000 0.7 4.4% to S$31.49m (including deferred rental income); while
1500
1000
Firs t REIT 0.6 distributable income rose 1.8% to S$21.35m. Looking ahead,
0.6
500 we expect growth via both organic and inorganic means, since
0 0.5
FREIT has a target to raise its asset base to S$1b in the next
Apr-10
Aug-10
Dec-09
Feb-10
Jun-10
Oct-10
Dec-10
Gross revenue 30.2 30.3 54.7 58.0 Investment properties 340.9 612.8 617.3 621.3
Property operating expenses -0.3 -0.4 -0.6 -0.6 Total non-current assets 340.9 612.8 617.3 621.3
Net property income 29.9 29.9 54.1 57.4 Cash and cash equivalents 11.5 27.6 23.1 15.3
Fees -2.9 -3.2 -5.4 -5.8 Total current assets 13.7 41.8 30.7 20.4
Net interest expense -1.9 -2.2 -4.1 -4.1 Total assets 354.7 654.6 648.0 641.7
Other expenses -0.3 -1.0 -0.5 -0.6 Current liabilities ex debt 10.2 81.3 25.3 19.0
Total return before tax 38.7 80.0 44.0 47.0 Debt 52.3 57.4 107.4 107.4
Income tax expense -2.7 -19.5 -9.7 -10.3 Total liabilities 83.6 175.5 169.5 163.2
Total return after tax 36.0 60.5 34.3 36.6 Total unitholders' funds 271.0 479.1 478.5 478.5
Total distribution to unitholders 21.0 21.3 40.1 40.5 Total equity and liabilities 354.7 654.6 648.0 641.7
CASH FLOW
Year Ended 31 Dec (S$m) FY09 FY10 FY11F FY12F KEY RATES & RATIOS FY09 FY10 FY11F FY12F
Net cash from operations 22.7 27.6 -5.7 40.8 DPU (S cents) 7.6 6.6 6.4 6.4
Increase in invt properties -2.0 -160.8 -4.5 -4.0 NAV per share (S$) 1.0 0.8 0.8 0.8
Net cash from investing -2.0 -160.8 -4.5 -3.9 Distr yield (%) 10.3 9.0 8.6 8.6
Proceeds from unitholders 0.0 167.9 0.0 0.0 P/CF (x) 9.0 16.7 -81.8 11.5
Increase in borrowings 1.3 4.8 50.0 0.0 P/NAV (x) 0.8 1.0 1.0 1.0
Interest paid -1.9 -2.2 -4.2 -4.2 NPI margin (%) 99.0 98.7 99.0 99.0
Net cash from financing -25.6 153.4 5.7 -44.7 Distr to revenue (%) 69.5 70.5 73.4 69.8
Net cash flow -4.9 20.1 -4.4 -7.9 Total debt/total assets (x) 14.7 8.8 16.6 16.7
Cash at beginning of year 12.4 7.5 27.6 23.1 ROE (%) 13.3 12.6 7.2 7.7
Cash at end of year 11.5 27.6 23.1 15.3 ROA (%) 10.1 9.2 5.3 5.7
SHAREHOLDING DECLARATION:
The analyst/analysts who wrote this report holds NIL shares in the above security.
Co.Reg.no.: 198301152E
For OCBC Investment Research Pte Ltd
Carmen Lee
Published by OCBC Investment Research Pte Ltd Head of Research