To The Moon

$Sasseur Reit(CRPU.SI)$

Basic Profile & Key Statistics

• Main Sector(s): Retail

• Country(s) with Assets: China

• No. of Properties (exclude associate/fund): 4

Key Indicators

Performance Highlight

EMA rental income in RMB increased YoY, however, in terms of SGD, it has declined slightly due to a weaker exchange of RMB against SGD. DPU has declined YoY mainly due to the absence of one-off non-recurring tax refund in 3Q 2022 and higher interest expenses.

Sales

Sales for all 4 outlets have improved YoY. 

Asset Enhancement Initiative

AEI for the Kunming outlet has been completed where both Erlanggang Chongqing Hotpot and KFC have opened in 3Q. 

For the Bishan outlet, the second entrance is planned and targeted to be completed by 1Q 2024.

AEI for the Hefei outlet would be carried out for the upcoming opening of a leading supermarket. 

Related Parties Shareholding

• REIT Sponsor's Shareholding: Above median by 20% or more

• REIT Manager's Shareholding: Above median by 20% or more

• Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

• Committed Occupancy: ± 5% from median

• Income in SGD/Major Currencies: All income is received in RMB

• WALE: Below median by 20% or more

• Highest Lease Expiry within 5 Years: Above median by 20% or more; Falls in 2024

• Weighted Average Land Lease Expiry: Below median by 20% or more

Debt Profile

• Gearing Ratio: Below median by 20% or more

• Cost of Debt: Above median by 20% or more

• Fixed Rate Debt %: ± 10% from median

• Unsecured Debt %: Below median by 10% or more

• WADM: ± 10% from median

• Highest Debt Maturity within 5 Years: Above median by 20% or more; Falls in 2026

• Interest Coverage Ratio: Above median by 10% or more

Diversification Profile

• Top Geographical Contribution: ± 10% from median

• Top Property Contribution: Above median by 20% or more

• Top 5 Properties' Contribution: Above median by 20% or more

• Top Tenant Contribution: Below median by 20% or more

• Top 10 Tenants' Contribution: Below median by 20% or more

Key Financial Metrics

• Property Yield: Above median by 20% or more

• Management Fees over Distributable Operating Income: Below median by 20% or more; $8.40 distribution for every dollar paid 

• Distributable Operating Income on Capital: Above median by 20% or more

• Distributable Operating Income Margin: Above median by 20% or more

• Operating Distribution Proportion: ± 5% from median

DPU Breakdown

• TTM DPU Breakdown:

• 88.4% from Operation

• 11.6% from Fees Payable/Paid in Units

• TTM DPU = 91.7% of Distributable Income

Trends

• Uptrend: Interest Coverage Ratio

• Slight Uptrend: Operating Distributable Income on Capital

• Flat: NAV per Unit, Committed Occupancy, Property Yield, Operating Distributable Income Margin

• Slight Downtrend: DPU from Operation

Relative Valuation

• Dividend Yield: Average for 1y, 3y & 5y

• P/NAV: Average for 1y, 3y & 5y

Author's Opinion

As compared to the previous quarter, distributable income has declined despite an increase in EMA rental income. However, no detail has been provided in this business update. In terms of debt, only 13% would be matured in 2024 and no refinancing requirement in 2025. With a 77% debt proportion at a fixed rate, further impact on interest increase should be minimal.

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