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Mapletree Commercial Trust - Diversifying growth engines

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Publish date: Sun, 26 Oct 2014, 05:06 PM
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MCT posted a decent set of 2QFY15 results, with DPU of 1.97Scts at 25% of our full year forecast thanks to positive rental renewals and better management of utilities, A&P and interest costs. This lifted NPI margin to 67.1%. Looking ahead, we expect NPI margin to remain robust, albeit with slight compression in 2HFY15 from the ramp-up of A&P expenses towards year-end. The more challenging retail operating environment is likely to hamper significant rental reversion upside, while the positive earnings impact of the planned AEI at Vivocity would only materialise when it is completed in 1HFY16.

We maintain our Hold call on MCT, with a higher DDM-based target price of S$1.47 as we roll over to FY16.
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