CapitaLand Retail China Trust’s (CRCT) 2Q results were within expectations. 2Q18 NPI fell 8.7% in RMB terms mainly due to the divestment of CapitaMall Anzhen and lower contributions from CapitaMall Grand Canyon, while NPI fell only 5.9% in SGD terms to S$37.6m due to the stronger RMB.

This was offset by increased distributable income contribution from the Rock Square joint venture as well as a partial distribution of gains from the Anzhen divestment. 2Q18 DPU increased 0.8% YoY to 2.64 S cents or 25.4% of our initial full-year forecast, which we consider within our expectations.

We keep our BUY rating but place our fair value of S$1.64 under review pending further details from the briefing.

Source: OCBC Research - 27 Jul 2018