Brokers' take

CapitaLand Mall Trust BUY Oct 23 close: S$2.06 Fair value: S$2.20 OCBC Investment Research, Oct 23

CapitaLand Mall Trust (CMT) reported a stable set of Q3 '17 results which met our expectations. Although gross revenue fell marginally by 0.2 per cent yoy (year on year) to S$169.4 million, NPI (net property income) rose 1.6 per cent to S$121.4 million due to lower property tax and utility expenses. This translated into an NPI margin of 71.6 per cent (+1.2 ppt yoy). DPU (distribution per unit) was unchanged at 2.78 Singapore cents.

We fine-tune our assumptions, which include lowering our finance cost projections due to the expected repayment of borrowings from CMT's divestment of the serviced residence component in the Funan integrated development. Our FY17 and FY18 DPU forecasts are lifted by 0.5 per cent and 0.4 per cent, respectively.