CapitaMall Trust’s placement of 125 million new units at $2.00/unit, raising $250 million, should be viewed favouably, Maybank-Kim Eng says, noting the FY13 DPU dilution is minimal; “the placement will provide the necessary funds for some new asset enhancement plans that could potentially add another 6% to our fair value, raising the target price to $2.42.”
The house notes CMT said up to 99% of the proceeds will be used to finance capex and asset enhancement initiatives and refinance debt, but the house expects AEIs to consume most of the proceeds. “While no plans have been revealed, we believe previously shelved (and now largely forgotten) plans for Funan and Tampines Mall are likely to be revisited, and these two malls could be the highlights of CMT’s AEI pipeline for 2013 and beyond.”
It adjusts its target to $2.29 from $2.35 to account for the placement, keeping a Buy call. “With the potential of exciting AEI plans in the pipeline, we remain confident that CMT can deliver DPU growth and maximise value for unitholders.” The stock is flat at $2.06.
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