CapitaLand Retail China Trust's (CRCT) results were within expectations. In RMB terms, 1Q19 revenue grew 4.5% YoY due to stronger rental growth from core multi-tenanted malls, offset by lower revenue from CapitaMall Wuhu which is in the process of being divested. In SGD terms, 1Q19 revenue grew by a more muted 1.1% YoY to S$56.0m due to a weaker RMB.

There was a full-quarter contribution from the Rock Square joint venture of S$2.6m vs. the partial quarter distribution of S$1.2m in 1Q18. Income available for distribution to unitholders grew 4.9% YoY to S$24.9m.

Meanwhile, capital distribution fell from S$3.0m in 1Q18 to S$1.0m. As a result, total distributable amount to unitholders fell 3.1% YoY to S$25.9m.

1Q19 DPU before capital distribution grew 2.0% YoY to 2.49 S cents, while DPU after capital distribution dropped 5.8% YoY to 2.59 S cents or 25.3% of our initial fullyear forecast. Portfolio occupancy remained high at 97.4%. Growth in shopper traffic remains healthy at +14.0% YoY.

We maintain our HOLD call but place our fair value of S$1.42 under review pending further details.

Source: OCBC Research - 25 Apr 2019