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PhillipCapital maintains 'accumulate' on Dasin Retail Trust following higher-than-expected 1H20 DPU and NPI

Felicia Tan
Felicia Tan8/25/2020 10:06 AM GMT+08  • 2 min read
PhillipCapital maintains 'accumulate' on Dasin Retail Trust following higher-than-expected 1H20 DPU and NPI
On August 13, Dasin Retail Trust declared 1H20 distribution per unit (DPU) of 1.92 cents, 43.4% lower than the 3.39 cents posted in 1H19.
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PhillipCapital’s research team has maintained its “accumulate” call on Dasin Retail Trust with an unchanged target price of 91 cents following the Trust’s results.

On August 13, Dasin Retail Trust declared 1H20 distribution per unit (DPU) of 1.92 cents, 43.4% lower than the 3.39 cents posted in 1H19. The lower DPU was attributable to lower earnings and an enlarged share base from the Trust’s preferential offering and fewer units with distribution waiver.

Revenue for the period grew 5.2% y-o-y to $37.1 million mainly driven by contribution from Doumen Metro Mall, which was acquired in September 2019. Net property income (NPI) rose 6.4% y-o-y to $30.3 million.

The higher NPI was mainly due to the higher NPI margins of and post-asset enhancement initiative (AEI) rental income of Xiaolan Metro Mall.

The team says the Trust’s NPI and DPU came in with 5.2% and 9.2% above its estimates for the half-year period.

Its turnover rent in June 2020 recovered to some 90.4% of 4Q19’s average, which “lends confidence for the remaining 13.5% in expiring leases (by gross rental income),” says the team.

Dasin’s portfolio occupancy also inched up 0.2 percentage points (ppts) to 97% for 1H20.

Rents signed in 2Q were “flattish”, and the team believes it is likely to remain flat for 2H20.

Looking ahead, the team believes there is “income visibility” in the Trust’s lease structure. As at end June, its assets have maintained a high occupancy rate of 97% and weighted average lease expiry (WALE) by gross rental income (GRI) of 4 years.

Following the acquisition of Shunde and Tanbei Metro Mall on July 8, which will contribute around 12% to overall revenue, Dasin is said to relook at acquisition plans in FY21.

As at 10.04am, units in Dasin were trading flat at 80 cents.

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