KUALA LUMPUR (April 18): MIDF Research has initiated coverage on Capita Malls Malaysia Trust (CMMT) with a Neutral recommendation, setting a target price of RM1.51 based on the Gordon Growth Model (Required rate of return: 8.20%, perpetual growth rate: 3%, forward DPU: 7.9 sen).
In a note Wednesday, the research house said that in the longer term, CMMT had strong growth potential by leveraging on its sponsor’s management expertise, extensive network of tenants and potential yield-accretive asset injection.
“Even though the 5.7% distribution yield of CMMT in FY12 was much lower as compared to the sector average of 7.03%, investor will be compensated by higher free float (in absolute value) as well as more resilient earnings growth,” it said.
In a note Wednesday, the research house said that in the longer term, CMMT had strong growth potential by leveraging on its sponsor’s management expertise, extensive network of tenants and potential yield-accretive asset injection.
“Even though the 5.7% distribution yield of CMMT in FY12 was much lower as compared to the sector average of 7.03%, investor will be compensated by higher free float (in absolute value) as well as more resilient earnings growth,” it said.
