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Frasers Centrepoint Trust J69U

Morningstar Rating
SGD 2.16 −0.02 (0.92%)
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Company Report

Frasers Centrepoint Trust Earnings: Retail Portfolio Metrics Remain Robust

Frasers Centrepoint Trust’s, or FCT’s, first-half fiscal 2024 (ending September) net property income fell 8.4% year on year to SGD 124.6 million, below our expectations and only making up 46.8% of our full-year estimate. The miss was largely due to lower-than-expected contributions from Tampines 1 mall, which is undergoing asset enhancement initiative. This was offset by lower-than-expected financing cost as the trust paid off higher interest rate debts using proceeds from the equity fund raising exercise in February 2024 and divestment of Changi City Point and Hektar REIT in October 2023 and December 2023, respectively. As such, first-half distribution per unit, or DPU, of SGD 0.06022 remains in line with our estimate. We fine-tuned our leasing and debt assumptions and lift our DPU estimates for 2024-26 by 0.8%-2.5%. Our fair value estimate of SGD 2.42 per unit remains unchanged. Based on current price, the trust trades at a fiscal 2024 distribution yield of 5.6%. Although the trust screens as undervalued, our preference among Singapore REITs is Keppel REIT, which trades at a more attractive distribution yield of 6.8%.

Price vs Fair Value

J69U is trading at a 343% premium.
Price
SGD 2.18
Fair Value
SGD 7.98
Uncertainty
Low
1-Star Price
SGD 7.62
5-Star Price
SGD 2.74
Economic Moat
Tlccqbk
Capital Allocation
Plzwtsdp

Bulls Say, Bears Say

Bulls

Strong population growth in Singapore, resulting in higher population density and higher shopper traffic for the trust's suburban malls, drives rentals higher.

Bears

A substantial increase in retail supply within the same neighborhood of the trust's retail mall increases competition and causes a decline in rents.

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Trading Information

Previous Close Price
SGD 2.18
Day Range
SGD 2.162.19
52-Week Range
SGD 2.012.33
Bid/Ask
SGD 2.16 / SGD 2.17
Market Cap
SGD 3.91 Bil
Volume/Avg
1.7 Mil / 3.1 Mil

Key Statistics

Price/Earnings (Normalized)
21.40
Price/Sales
10.55
Dividend Yield (Trailing)
5.52%
Dividend Yield (Forward)
5.52%
Total Yield
5.58%

Company Profile

Frasers Centrepoint Trust, or FCT, is a real estate investment trust listed on the Singapore Exchange that predominately invests in suburban retail assets in Singapore. Its portfolio consists of 9 retail malls (of which two are not wholly owned) and one office property with a total valuation of SGD 7.1 billion as at March 31, 2024. The trust is externally managed by Frasers Centrepoint Asset Management, a wholly owned subsidiary of Frasers Property Limited that has a 39.4% direct and indirect interest in FCT.
Sector
Real Estate
Industry
REIT - Retail
Stock Style Box
Mid Value
Total Number of Employees
27

Competitors

Valuation

Metric
J69U
T82U
C38U
Price/Earnings (Normalized)
21.4023.1316.27
Price/Book Value
0.950.510.92
Price/Sales
10.556.788.42
Price/Cash Flow
24.4912.2218.09
Price/Earnings
J69U
T82U
C38U

Financial Strength

Metric
J69U
T82U
C38U
Quick Ratio
0.150.460.12
Current Ratio
0.160.560.13
Interest Coverage
3.202.133.51
Quick Ratio
J69U
T82U
C38U

Profitability

Metric
J69U
T82U
C38U
Return on Assets (Normalized)
3.28%2.06%3.52%
Return on Equity (Normalized)
5.20%3.81%6.15%
Return on Invested Capital (Normalized)
4.51%3.33%4.96%
Return on Assets
J69U
T82U
C38U
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