Cambridge – DMG
CAMBRIGE, DMG remains a BUY with target price $0.94
– Cambridge’s 3Q07 results were in line with street estimates, with a 10% qoq growth in distributable income to $8.8m. For the 9M, bottomline totaled $24.2m or 72% of our full year projection. The improvement was due to additional revenue from 6 properties acquired during the 3 quarters. Cambridge has a further $190.5m worth of new buys to be completed and earnings contribution from these assets should boost earnings. In addition, there are another $94m of MOUs in the pipeline. The group also plans to tap opportunities in China and Malaysia, possibly within the next 12 months. Following its fund raising exercise, gearing level had declined to 38% giving the group debt financing capacity of $480m to fund new buys. Valuation is attractive at low P/book NAV of 1x and FY08 yield of 8.6%. Our price target of $0.94, based on existing portfolio, offers potential upside of 33%. Maintain buy.
– Results in line with projections. Cambridge posted Q3 distributable income of $8.8m (DPU 1.7cts), +10% qoq and 29% ahead of its IPO forecast, on a 25% yoy and 8% qoq rise in revenue to $13.5m. The improved results were due to additional contributions from new acquisitions. For the 9M, distributable bottomline came in at $24.2m or 72% of our full year forecast. – Added 6 properties to portfolio since beginning 07. For the 9M07, the group had acquired 6 buildings valued at $137m, bringing its portfolio to 33 properties. New contributions from these properties had boosted bottomline. It has another $190.5m of new purchases which are expected to be completed over the next 1 month. In all, these assets are expected to add about $25m rental revenue annually to topline. – A further $94m of MOUs. The key driver to DPU growth is new acquisitions. In this respect, the group has expanded its portfolio by $328m with another $94m of MOUs. Given the increasingly competitive domestic acquisition environment, CIT also plans to venture into Malaysia and China and could look to possibly invest offshore over the next 12 months. Recent $193.9m cash raising exercise via an issue of 276.9m new units has lowered gearing to 38% and has freed up $480m of debt headroom for the group to seek new buys. – Maintain Buy. Share price has retraced 26% from the recent high and at present, offers significant value in view of its stable and secure income profile and long lease life. FY08 yield of 8.6% is amongst the highest with the S-reit sector. Our price target of $0.94 is conservative and is based on discounting cashflow from existing portfolio and has not imputed earnings accretion from potential new purchases. Reiterate buy with potential upside of 33%.
– Results in line with projections. Cambridge posted Q3 distributable income of $8.8m (DPU 1.7cts), +10% qoq and 29% ahead of its IPO forecast, on a 25% yoy and 8% qoq rise in revenue to $13.5m. The improved results were due to additional contributions from new acquisitions. For the 9M, distributable bottomline came in at $24.2m or 72% of our full year forecast. – Added 6 properties to portfolio since beginning 07. For the 9M07, the group had acquired 6 buildings valued at $137m, bringing its portfolio to 33 properties. New contributions from these properties had boosted bottomline. It has another $190.5m of new purchases which are expected to be completed over the next 1 month. In all, these assets are expected to add about $25m rental revenue annually to topline. – A further $94m of MOUs. The key driver to DPU growth is new acquisitions. In this respect, the group has expanded its portfolio by $328m with another $94m of MOUs. Given the increasingly competitive domestic acquisition environment, CIT also plans to venture into Malaysia and China and could look to possibly invest offshore over the next 12 months. Recent $193.9m cash raising exercise via an issue of 276.9m new units has lowered gearing to 38% and has freed up $480m of debt headroom for the group to seek new buys. – Maintain Buy. Share price has retraced 26% from the recent high and at present, offers significant value in view of its stable and secure income profile and long lease life. FY08 yield of 8.6% is amongst the highest with the S-reit sector. Our price target of $0.94 is conservative and is based on discounting cashflow from existing portfolio and has not imputed earnings accretion from potential new purchases. Reiterate buy with potential upside of 33%.