CapitaLand Retail China Trust (CRCT) reported its 2Q15 results this morning which came in within our expectations. Gross revenue rose 6.4% YoY to S$54.3m. However, in CNY terms, gross revenue was flat at CNY249.6m (-0.1% YoY) due to ongoing weakness from CapitaMall Wuhu (tenant repositioning) and CapitaMall Minzhongleyuan (impacted by road closure to facilitate the construction of a subway line).

DPU for 2Q15 was up 5.4% YoY to 2.73 S cents. For 1H15, CRCT’s gross revenue grew 9.7% to S$108.8m and this formed 50.6% of our FY15 forecast. DPU of 5.37 S cents represented an increase of 7.6% and made up 50.5% of our fullyear projection. Operationally, CRCT’s malls registered a 2.0% and 17.8% YoY growth in shopper traffic and tenants’ sales in 2Q15, respectively.

Meanwhile portfolio rental reversion came in at 4.6%, a moderation from the 12.8% achieved in 1Q15. We maintain our HOLD rating and S$1.64 fair value estimate on CRCT given this in-line set of results.

Source: OCBC Research - 29 Jul 2015