a-iTrust – DBS

Valuation remains attractive

Comment on Results

1HFY08 results in line with expectations. Total property revenue grew 54% to S$48.5m, as a result of the inclusion of CyberPearl and ITPC to the portfolio, higher rental rates and the leasing of Navigator Building at ITPB (completed in Jan 07). Distributable income of S$22.2m was 17% higher than forecast, with a reported DPU of 2.95 cents.

NAV. As at 30 Sep 07, A-iTrust has an NAV of S$869.6m and this translates to S$1.16 per unit. This is 10% higher than the pro forma NAV of S$1.05 per unit at listing.

Recommendation

Strategy. Moving forward, a-iTrust will continue to seek organic growth, develop its in-built development pipeline and grow via acquisitions. With debt headroom of at least S$150m, this provides a-iTrust the capacity to make third-party acquisitions or undertake further development projects.

Maintain Buy, target price of S$1.84. Based on DDM valuation, we have a raised target price of S$1.84 due to Vega, the completing 5th building at The V (Hyderabad), which added 408,000 sq ft SBA instead of the earlier disclosed 377,000 sq ft.

We have reduced our DPU forecast by 3% in FY08 due to the expected completion for The Crest being delayed from Aug 07 to Nov 07.