Fortune Reit

[sreitinvestor]

First quarter 2010 results for Fortune Reit:

Key Points

* DPU of 6.38 HK cents for the quarter.

* Total Revenue for 1Q 2010 was HK$209.1 million, 24.3% higher compared to the same quarter last year.

* Net Profit of the Property Companies was HK$100.1 million, representing a 19.5% increase compared to the same period last year.

* Income Available for Distribution for the Reporting Period was HK$106.2 million, 28.2% higher than the corresponding period last year.


http://sreitinvestor.blogspot.com/p/dat ... lease.html

[stilicon]

JPM maintains Fortune Reit at OVERWEIGHT :

- "Maintain OW, Dec-10 PT HK$4.0 Our Dec-10 PT is on par to our DDMbased NPV of HK$4.0, where a discount rate of 6.57% and long term growth rate of 0.4% (1% growth minus 0.6% dilution from REIT managers’ fee paid in units) is adopted.

Risks include lower than expected rental reversions, and delayed completion of City One Shatin asset enhancement.

Our PT implies 5.9% / 6.3% FY10E/FY11E yield, respectively."

- They expect a DPU of HK$0,1196 for 1H10.

reminder : results on July, 28.

[winston]

Not vested. From Business Times:-

Fortune Reit's Q4 DPU at 6.32 HK cts, up 10.7% yoy By FELDA CHAY

Hong Kong and Singapore-listed Fortune Real Estate Investment Trust (Fortune Reit) saw its fourth quarter payout to shareholders rise 10.7 per cent from the same period last year on higher occupancy and rental rates for its properties.

The Reit reported after market closed that distribution per unit (DPU) rose to 6.32 HK cents, from 5.71 HK cents a year ago. Overall, distributable income for the Oct-Dec period jumped 11.3 per cent to HK$105.5 million from HK$94.9 million on-year.

Total revenue saw a 9.1 per cent increase to HK$217.7 million, while net property income rose 10.7 per cent to HK$152.4 million.

Reit manager ARA Asset Management (Fortune) Ltd said yesterday that it will continue to drive revenue growth by embarking on asset enhancement initiatives.

'Leveraging on a strong balance sheet and capital structure, the Manager will continue to look for acquisition opportunities in line with addressing the long-term interests of Fortune Reit's unitholders,' it said.

Fortune Reit's shares closed unchanged at HK$4.05.

http://www.businesstimes.com.sg/sub/lat ... 75,00.html?

[stilicon]

seen on ET Net : (http://www.etnet.com.hk/www/eng/stocks/ ... E210315163)

15/03/2011 Goldman rates Fortune REIT (00778) "neutral"

Goldman Sachs initiated coverage on Fortune REIT (00778) with a "neutral" rating and a target price of HK$4.6.

Fortune REIT has a suburban retail property portfolio catering to non-discretionary spending, and Goldman expects the latter to grow at a modest but steady pace. It believes Fortune's share price would be mainly driven by portfolio rental growth and potential asset acquisition opportunities.

It sees modest but steady retail rental growth at 5% p.a. for the next three years, underpinned by the uptrend in non-discretionary retail spending in HK.

-> I wonder if the recent weakness in Fortune Reit (and others Sing Reits) is an opportunity. It begins to look so to me. But on the other hand, the ARA manager spent the last month selling loads of shares. Why ?

Personal matter ? Or did he know that FR at 4.00 HKD was overvalued ? Also, FR quotes 3,88 HKD in HKEx when it quotes 3,78 HKD in SGX. (already vested).

[stilicon]

Results are in :
- Revenue +8%
- Net Property Income +5,7%
- dpu (1H) 12,8cHK +4,3%
- NAV/share : 7,52HK$.

which means Fortune Reit trades at a significant discount vs. book value (about 0.55 P/B).

which brings my naive question :
When a property is owned with a land title which expires (is it really the right term ?), after it expires, what really happens ?
Recently, FIRST Reit explained that such titles could be prolonged for an fairly inconsequential sum in Indonesia.

What about HK laws ?

examples of such cases :
- City One Shatin Property (land title : Government Leasehold until 30 June 2047)
- Ma On Shan Plaza (idem)
- Metro Town (Government Leasehold until 10 February 2053)
(those are the 3 biggest assets by value at 30/6/11).

[winston]

not vested

EXCEEDING EXPECTATIONS

- Beating estimates
- Healthy balance sheet
- AEIs provide good returns

1Q12 results were above our and the street’s forecasts.

Net property income of HK$185m was up 15.1% YoY; 9.9ppt came from organic growth, while 5.2ppt was due to the one-and-a-half months contribution from Belvedere Square and Provident Square, which were acquired in mid Feb.

DPU climbed 14% QoQ to 7.78 HK cents.

With the next three quarters seeing full contribution from the two properties, we raise our FY12 DPU forecast from 29.4 HK cents to 31.7 HK cents, up 20.5% YoY from FY11 DPU.

We maintain our BUY rating and raise our fair value from HK$4.88 to HK$5.22.


Source: OCBC

[stilicon]

is it DBS or OCBC ?
Anyway, it is curious how this company becomes fashionable after being a black sheep for some time after their 2009 capital increase.
It seems to me that valuations of companies are more and more a function of what is trendy now, instead of what is valuable on a longer term. Today in Singapore, F&B is "in" (and rightly so probably) but industrials are not so much, and some good companies are sold on bargain. Same for hotels to some degree.

[winston]

Yes, you are right. The source is OCBC not DBS. I have edited it already.

[winston]

not vested

DISAPPOINTING HK RETAIL SALES IN JUL

• Poor HK retail sales in Jul

• Easier visa policy for Mainlanders

• Maintain HOLD

http://www.remisiers.org/cms_images/res ... 31-OIR.pdf

[winston]

Fortune Real Estate Investment Trust: Further yield compression could take place

Summary: In Aug, the value of HK retail sales climbed 4.5% YoY, a slightly improvement over Jul, which saw sales rise 3.9% YoY (revised figure).

While these increases are substantially lower than the YoY increases earlier in the year, which ranged between 8.7% and 17.1% for Jan-Jun, rental rates and prices of retail spaces are still continuing a good upward march.

Based on information from the Hong Kong Retail Management Association, we think that rental rates may have relatively more room to climb vis-à-vis the cost of other production factors, specifically wages and inventory costs.

We lower our discount rate to reflect the prevailing interest rates, which are likely to stay low till at least mid-2015 given QE3.

We raise our fair value from HK$5.33 to HK$6.49 and upgrade FRT from HOLD to BUY.


Source: OCBC