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1、3,107.76,89.8,8.3,%,6.23,39.3,3.7,4.2,Co.Reg No:198700034EMICA(P):099/03/2012Singapore,Results PreviewBUY(from HOLD),Suntec REIT,8 October 2012,Share price:Target price:,SGD1.53SGD1.66(previously SGD1.42),The Sun shines brighter hereDPU top-up unlikely in 3Q12.As a result of Phase 1 AEI work,whichst
2、arted in Jun 2012,we expect revenue from Suntec Mall to slide fromSGD103m in FY11 to SGD86m(16%decline)in FY12F.Occupancy,ONG Kian Linongkianlinmaybank-.sg(65)6432 1470Stock InformationDescription:Suntec Real Estate Investment Trust is a realestate investment trust established with the objective ofi
3、nvesting in income-producing real estate properties whichare used primarily for retail and office purposes.,rate is likely to fall to 75-78%by year-end(excluding the space vacatedby Carrefour).Carrefour takes up some 137k sq ft of NLA and will likelydepress occupancy rate to 60%when its lease tenure
4、 expires 31 Dec2012.Nonetheless,we are confident that Suntec REIT should be ableto pay out DPU of at least 2.15 Singapore cents for 3Q12 and at least9.0 Singapore cents for the full year.We also do not think that Suntecwill use its Chijmes divestment proceeds to top up its 3Q12 DPU.It maywant to kee
5、p this flexibility for 4Q12 when there is greater clarity on itsfull-year distributable income.AEI making good progress.From our observation,refurbishmentworks have been progressing well,with Suntec Convention and the,Ticker:Shares Issued(m):Market Cap(USD m):3-mth Avg Daily Turnover(USD m):ST Index
6、:Free float(%):Major Shareholders:Suntec City DevelopmentKey IndicatorsROE annualised(%)Debt to deposit assets(%):NAV/shr(SGD):Interest cover(x):Historical Chart,SUN SP2,242.92,796.31.98,Galleria/Fountain Terrace zones proceeding full steam ahead.FoodRepublic has ceased operations and tenants at Fou
7、ntain Food Terraceare expected to vacate by end Oct.We think pre-commitments forPhase 1 leases should hit at least 65%presently and Phase 2 AEIshould commence on time by Apr-May 2013.We estimate that thelargest dip in mall occupancy should occur in FY13F at 59%,but thiswill improve in FY14F to 70%.O
8、ffice portfolio in good shape.Against a background of office supplyglut(Pipeline supply of 24%of available Downtown Core stock by2012-2016)and high vacancy rates(Downtown Core vacancy at 13%in2Q12),we are heartened that Suntec has secured 100%occupancy forSuntec Office,Park Mall Office,One Raffles Q
9、uay and 99.5%forMBFC1.With less than 22%of office leases NLA expiring per annumfor the next three years,we remain positive that Suntecs proactiveleasing management will tread cautiously to optimise its office portfolio.Upgrade to BUY on brighter prospects.There are only a handful ofS-REITs that offe
10、r yields of more than 6%but are trading at discountsto book.Suntec is one of them,with a yield-spread of 463bps comparedto the sector average of 436bps.With all its assets and incomecontribution from Singapore,we believe investors will continue to favourSuntec in the absence of forex risk(all SGD),h
11、ighly-liquid S-REITcounters(ADTV USD8m)and investable alternatives.In addition,inthis inflationary and yield-chasing climate,yields for Suntec could becompressed further to 5.5%in our view.Upgrade to BUY with a highertarget price of SGD1.66.Suntec REIT Summary Earnings TableFYE Dec(SGD m)FY10 FY11 F
12、Y12F FY13F FY14FRevenue249.5 270.3 254.0 263.7 295.1,Net property incomeDistributable income,193.1 193.4182.5 220.7,195.5207.0,205.4201.5,229.2213.7,Performance:,DPU(SG cts),9.9,9.9,9.2,8.9,9.4,52-week High/Low,SGD1.54/SGD1.05,DPU growth(%)DPU yield(%),-15.86.4,0.76.5,-7.36.0,-3.45.8,5.26.1,1-mth,3-
13、mth,6-mth,1-yr,YTD,P/BV(x),0.8,0.8,0.8,0.8,0.8,Absolute(%)Relative(%),5.92.1,12.98.0,22.918.1,43.716.9,42.321.2,Gearing(debt-to-deposited assets)(%)ROE(%),39.49.7,38.014.3,37.15.4,37.45.3,37.15.6,ROA(%),5.8,8.4,3.3,3.2,3.3,Source:Company,Maybank KESEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST
14、 CERTIFICATIONS,Suntec REITFigure 1:Proposed phasing of works(1 Jun 2012 end-2014)Source:CompanyFigure 2:Suntec Conventions AEI moving full steam aheadSource:Company,Maybank KE,8 October 2012,Page 2 of 10,Suntec REITFigure 3:Refurbishments underway at various sections of Suntec MallSource:Company,Ma
15、ybank KEFigure 4:Fountain Food Terrace will be vacated by end Oct.Source:Company,Maybank KEFigure 5:MBKE estimates for Suntec Mall,(SGD m)Gross revenueNPINPI MarginFull-yr occupancy,FY11A103.0077.0075%97%,FY12F86.7664.8175%86%,FY13F72.0153.7975%59%,FY14F90.2667.4275%70%,FY15F138.39103.3875%100%,Sour
16、ce:Maybank KE,8 October 2012,Page 3 of 10,13Nov06,13Nov07,13Nov08,13Nov09,13Nov10,13Mar07,13Mar08,13Mar09,13Mar10,13May07,13Mar11,13Nov11,13May08,13May09,13May10,13May11,13Mar12,13Jan07,13Jan08,13Jan09,13Jan10,13Jan11,13Sep06,13Sep07,13Sep08,13Sep09,13Sep10,13Sep11,13Jan12,13Jul07,13Jul08,13Jul09,13
17、Jul10,13Jul11,Suntec REITFigure 6:SWOT analysis,Strengths,Weaknesses,Strategic location of assets(all within Concentration risk on Suntec,city centre).All Singapore-based.,City(53%of FY12 GAV).,All SGD rental income.No forex risk.“Flight to quality”vacancy risk,Affiliation with Cheung KongHoldings a
18、nd the HK tycoons whopreviously owned Suntec City.Ongoing enhancements at SuntecCity(organic growth).Opportunities Possible acquisition of one-thirdstake in MBFC Phase 2.Cross-fertilisation effect from SouthBeach development(due tocomplete in 2015).More officeworkers to patronise Suntec Mall.,at Sun
19、tec Office mitigated toa certain extent by a largenumber of Non-FI tenants(eg,service industry,trading,manufacturing,real estate)which makes up 78.3%oftotal.Isolation risk for Suntec City(separation from Marina BayNew Downtown and RafflesPlace).Threats Macro-economic headwinds.Impending office suppl
20、y glut indowntown core.Equity fund raising for MBFCPhase 2 acquisition(possiblynext year and beyond).,Capitalise on the rising popularity of More government land sales,Singapore as a MICE destination ofchoice.,(GLS)in Marina Bay area todrive down office rent in a bid,to maintain competitiveness.Sour
21、ce:Maybank KEFigure 7:Suntec REIT is presently trading at 463 bps yield-spread.,RISK-FREE,DPU YIELD,SPREADS,25.0%SUNTEC REITMin Spreads 48 bpsMax Spreads 2020 bps20.0%15.0%10.0%5.0%0.0%Source:Bloomberg,Maybank KE,8 October 2012,Page 4 of 10,Suntec REITFigure 8:Dividend Discount Model(DDM),DDMDPU(SG
22、cts):,FY12F9.21,FY13F8.90,FY14F9.36,FY15F10.74,Terminal Value172.62,Fair ValueCost of EquityTerminal Growth,1.6607.0%1%,Source:Maybank KEFigure 9:Suntec REIT FY12F GAV100%,90%80%,21%,70%60%50%,8%,4%,14%,100%,40%,30%20%10%0%,53%,Suntec City(Office+M all),SuntecCo nventio n,P ark M all,One RafflesQuay
23、,M B FC1(33%interest),To tal,8 October 2012,Source:Maybank KE,(co nso lidatedif 100%),(33%interest),Page 5 of 10,FV,Suntec REIT,PROFIT AND LOSS(SGD m),BALANCE SHEET(SGD m),FYE DecGross RevenueProperty expensesNet Property IncomeShare of profit of JCEOther IncomeAmortisation CostsManagement feesTrust
24、 expensesNet Financing CostsOthersNet income b/f tax&change inChange in FV of Inv PtyOthersIncome taxTotal returnNon-tax deductibles&oer adjDistributable incomeDPU(SG cts),2010A249.5-56.4193.130.922.4-20.9-27.9-2.7-55.90.0139.0248.70.0-2.0385.7-203.2182.59.9,2011A270.3-76.9193.4141.747.7-39.3-36.1-5
25、.3-51.80.0250.3396.2-5.9-6.0634.6-413.9220.79.9,2012F254.0-58.4195.547.531.6-20.0-31.3-2.5-37.30.0183.525.539.5-3.5245.0-38.1207.09.2,2013F263.7-58.4205.449.830.0-20.0-32.2-2.6-37.70.0192.652.30.0-3.3241.7-40.2201.58.9,2014F295.1-66.0229.261.210.0-20.0-33.6-3.0-38.80.0204.954.20.0-1.1258.0-44.3213.7
26、9.4,FYE DecTotal assetsCurrent assetsCash&equivalentTrade receivablesOthersNon-current assetsInvestment propertiesPlant&equipmentOthersTotal liabilitiesCurrent liabilitiesTrade and other payablesShort term borrowingsOthersLong-term liabilitiesLong-term debtsOthersUnitholders funds,2010A6,652.159.952
27、.53.34.26,592.14,452.00.02140.12,667.4478.941.1404.633.22,188.52,150.138.53,984.6,2011A7,516.7262.7104.413.6144.77,254.15,098.17.92148.12,970.1305.680.9200.024.72,664.42,604.160.34,433.8,2012F7,489.199.185.512.70.87,390.05,233.27.92148.92,879.4756.261.5670.024.72,123.12,076.846.44,496.9,2013F7,651.1
28、77.863.713.20.97,573.35,415.37.92150.02,975.4859.761.5773.524.72,115.72,069.446.44,562.8,2014F7,763.267.852.014.81.07,695.45,536.27.92151.33,016.3775.669.4681.524.72,240.72,194.346.44,634.0,Non-controlling interests,0.0,112.8,112.8,112.8,112.8,CASH FLOW(SGD m),KEY RATIOS,FYE Dec,2010A,2011A,2012F,20
29、13F,2014F,FYE Dec,2010A,2011A,2012F,2013F,2014F,Operating cash flows,206.4,216.7,156.8,222.4,234.8,Growth(%YoY),Total return before tax,139.0,250.3,183.5,192.6,204.9,Sales,-1.4,8.3,-6.0,3.9,11.9,Adjustments for,NPI,0.4,0.2,1.1,5.0,11.6,Net interest expenseDepreciationMgt fees in units,55.90.022.3,51
30、.81.128.3,37.30.025.0,37.70.025.8,38.80.026.9,Net incomeDistributable incomeDPU,-424.3-3.8-15.8,64.520.90.7,-61.4-6.2-7.3,-1.4-2.6-3.4,6.76.05.2,Others,-9.6,-102.9,-67.0,-29.8,-41.2,Profitability(%),Trade and other receivablesTrade and other payablesIncome tax paidInvesting cash flows,0.54.4-6.2-117
31、2.7,0.4-10.3-2.0-5.6,0.8-19.4-3.5111.4,-0.50.0-3.3-80.0,-1.68.0-1.1-5.5,NPI marginNet income marginROAROE,77.4154.65.89.7,71.5234.88.414.3,77.096.53.35.4,77.991.63.25.3,77.787.43.35.6,PPE,0.0,-0.2,0.0,0.0,0.0,Stability,Capex on Inv Pty&othersPurchase of PtyOthersFinancing cash flowsOthers,-1.30.0-1,
32、171.5987.6419.1,-3.3-92.690.4-159.1-2.5,-109.6173.547.5-287.142.9,-129.80.049.8-164.36.9,-66.70.061.2-240.96.6,Gross debt/asset(%)Total debt/Investment PropInt.coverage(X)Int.&ST debt coverage(X)Cash flow int.coverage(X),39.440.31.50.23.7,38.039.73.80.84.2,37.137.93.90.24.2,37.437.94.10.25.9,37.137.
33、44.30.26.0,Borrowing costs,-76.1,-58.8,-49.1,-49.5,-50.6,Per share data(SG cts),Net borrowing proceedsDistribution to unitholdersNet change in cashBeginning cash balanceForex,830.0-185.421.331.20.0,112.5-210.351.952.50.0,-73.9-207.0-18.9104.40.0,79.8-201.5-21.885.50.0,16.7-213.7-11.763.70.0,EPUDPUCF
34、PSNAVSPS,20.39.99180.3511,28.59.910198.7012,10.89.27200.0611,10.18.910201.4812,10.69.410203.0513,Ending cash balanceFree cash flow,52.5205.1,104.4213.2,85.547.2,63.792.6,52.0168.1,Source:Company,Maybank KE,8 October 2012,Page 6 of 10,Suntec REITRESEARCH OFFICES,REGIONALP K BASURegional Head,Research
35、&Economics(65)6432 1821 pk.basumaybank-.sgWONG Chew Hann,CAActing Regional Head of Institutional Research(603)2297 8686 wchewhmaybank-THAM Mun HonRegional Strategist(852)2268 0630.hkONG Seng YeowRegional Products&Planning(852)2268 0644 ongsengyeowmaybank-.sg,ECONOMICSSuhaimi ILIASChief EconomistSing
36、apore|Malaysia(603)2297 8682 suhaimi_iliasmaybank-Luz LORENZOEconomistPhilippines|Indonesia(63)2 849 8836 luz_lorenzomaybank-,MALAYSIAWONG Chew Hann,CA Head of Research(603)2297 8686 wchewhmaybank-StrategyConstruction&InfrastructureDesmond CHNG,ACA(603)2297 8680 desmond.chngmaybank-Banking-RegionalL
37、IAW Thong Jung(603)2297 8688 tjliawmaybank-Oil&GasAutomotiveShippingONG Chee Ting,CA(603)2297 8678 ct.ongmaybank-PlantationsMohshin AZIZ(603)2297 8692 mohshin.azizmaybank-AviationPetrochemPowerYIN Shao Yang,CPA(603)2297 8916 samuel.ymaybank-Gaming RegionalMediaPowerTAN CHI WEI,CFA(603)2297 8690 chiw
38、ei.tmaybank-Construction&InfrastructurePowerWONG Wei Sum,CFA(603)2297 8679 weisummaybank-Property&REITsLEE Yen Ling(603)2297 8691 lee.ylmaybank-Building MaterialsManufacturingTechnologyLEE Cheng Hooi Head of Retailchenghooi.leemaybank-TechnicalsHONG KONG/CHINAEdward FUNG Head of Research(852)2268 06
39、32.hkConstructionIvan CHEUNG(852)2268 0634.hkPropertyIndustrialIvan LI(852)2268 0641.hkBanking&FinanceJacqueline KO(852)2268 0633.hkConsumer StaplesAndy POON(852)2268 0645.hkTelecom&equipmentAlex YEUNG(852)2268 0636.hkIndustrialINDIAJigar SHAH Head of Research(91)22 6623 2601 jigarkimeng.co.inOil&Ga
40、sAutomobileCementAnubhav GUPTA(91)22 6623 2605 anubhavkimeng.co.inMetal&MiningCapital goodsPropertyGanesh RAM(91)226623 2607 ganeshramkimeng.co.inTelecomContractor8 October 2012,SINGAPOREStephanie WONG Head of Research(65)6432 1451 swongmaybank-.sgStrategySmall&Mid CapsGregory YAP(65)6432 1450 gyapm
41、aybank-.sgTechnology&ManufacturingTelcos-RegionalWilson LIEW(65)6432 1454 wilsonliewmaybank-.sgHotel&ResortProperty&ConstructionJames KOH(65)6432 1431 jameskohmaybank-.sgLogisticsResourcesConsumerSmall&Mid CapsYEAK Chee Keong,CFA(65)6433 5730 yeakcheekeongmaybank-.sgHealthcareOffshore&MarineAlison F
42、OK(65)6433 5745 alisonfokmaybank-.sgServicesS-chipsBernard CHIN(65)6433 5726 bernardchinmaybank-.sgTransport(Land,Shipping&Aviation)ONG Kian Lin(65)6432 1470 ongkianlinmaybank-.sgREITs/PropertyWei Bin(65)6432 1455 weibinmaybank-.sgS-chipsSmall&Mid CapsINDONESIAKatarina SETIAWAN Head of Research(62)2
43、1 2557 1125 ksetiawanmaybank-ke.co.idConsumerStrategyTelcosLucky ARIESANDI,CFA(62)21 2557 1127 lariesandimaybank-ke.co.idBase metalsCoalOil&GasRahmi MARINA(62)21 2557 1128 rmarinamaybank-ke.co.idBankingMultifinancePandu ANUGRAH(62)21 2557 1137 panugrahmaybank-ke.co.idAutoHeavy equipmentPlantationTol
44、l roadAdi N.WICAKSONO(62)21 2557 1130 anwicaksonomaybank-ke.co.idGeneralistAnthony YUNUS(62)21 2557 1134 ayunusmaybank-ke.co.idCementInfrastructurePropertyArwani PRANADJAYA(62)21 2557 1129 apranadjayamaybank-ke.co.idTechnicalsPHILIPPINESLuz LORENZO Head of Research(63)2 849 8836 luz_lorenzomaybank-S
45、trategyLaura DY-LIACCO(63)2 849 8840 laura_dyliaccomaybank-UtilitiesConglomeratesTelcosLovell SARREAL(63)2 849 8841 lovell_sarrealmaybank-ConsumerMediaCementKenneth NERECINA(63)2 849 8839 kenneth_nerecinamaybank-ConglomeratesPropertyPorts/LogisticsKatherine TAN(63)2 849 8843 kat_tanmaybank-BanksCons
46、tructionRamon ADVIENTO(63)2 849 8842 ramon_advientomaybank-Mining,THAILANDMayuree CHOWVIKRAN Head of Research(66)2658 6300 ext 1440 mayuree.cmaybank-ke.co.thStrategyMaria BRENDA SANCHEZ LAPIZ Co-Head of ResearchDir(66)2257 0250|(66)2658 6300 ext 1399Maria.Lmaybank-ke.co.thConsumer/Big CapsAndrew STO
47、TZ Strategist(66)2658 6300 ext 5091Andrewmaybank-ke.co.thSuttatip PEERASUB(66)2658 6300 ext 1430 suttatip.pmaybank-ke.co.thMediaCommerceSutthichai KUMWORACHAI(66)2658 6300 ext 1400 sutthichai.kmaybank-ke.co.thEnergyPetrochemTermporn TANTIVIVAT(66)2658 6300 ext 1520 termporn.tmaybank-ke.co.thProperty
48、Woraphon WIROONSRI(66)2658 6300 ext 1560 woraphon.wmaybank-ke.co.thBanking&FinanceJaroonpan WATTANAWONG(66)2658 6300 ext 1404 jaroonpan.wmaybank-ke.co.thTransportationSmall cap.Chatchai JINDARAT(66)2658 6300 ext 1401 chatchai.jmaybank-ke.co.thElectronicsPongrat RATANATAVANANANDA(66)2658 6300 ext 139
49、8 pongrat.Rmaybank-ke.co.thServices/Small CapsVIETNAMMichael KOKALARI,CFA Head of Research(84)838 38 66 47.vnStrategyNguyen Thi Ngan Tuyen(84)844 55 58 88 x 8081.vnFood and Beverage Oil and GasNgo Bich Van(84)844 55 58 88 x 8084.vnBankingTrinh Thi Ngoc Diep(84)844 55 58 88 x 8242.vnTechnololyUtiliti
50、esConstructionDang Thi Kim Thoa(84)844 55 58 88 x 8083.vnConsumerNguyen Trung Hoa+84 844 55 58 88 x 8088.vnSteelSugarResourcesPage 7 of 10,Suntec REITAPPENDIX I:TERMS FOR PROVISION OF REPORT,DISCLAIMERS AND DISCLOSURESDISCLAIMERSThis research report is prepared for general circulation and for inform
