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雷达卡
Australia Property
Trust Talk: 74th Edition
Chart of the Week: Just 8% of Cyclical Upside if
A-REITs Return to Peak Operating EPS Earnings
62.9
100.0
67.9
(5%)
(32%)
+7.9%
-
10
20
30
40
50
60
70
80
90
100
Historical
Peak
Structural &
Cyclical
Downside
Trough
(Jun-Dec 2010)
Cyclical
Upside
Proforma
Peak
Historical Peak = Base of 100
Structural Change (permanent)
Cyclical Change
Source: Company data, Morgan Stanley Research
Chart of the Week: Expectations of a cyclical recovery
continue to drive up the market and A-REITs. However,
while the peak-to-trough drop in share prices suggests
that property should be a main beneficiary of such a
cyclical recovery, our analysis shows that the majority of
the 37% decline in weighted average EPS has been
driven by the dilution of balance sheet repair, disposals
and currency. Consequently, if all operating profits
return to previous peaks, there is just 8% upside to
sector EPS, while we believe that rent declines and
rising interest expense will drive down earnings in the
short term. Not surprisingly, MGR and SGP have most
cyclical upside (in MGR’s case from a low base), but
after the recent rally, we believe this is now more then
reflected in their share prices.
This week in Australia: Both Australian sales of newly
built dwellings and building approvals increase. Mirvac
completes A$102.5m acquisition of a 1000-home
development from Brickworks.
Internationally: US Team provides mid-season
earnings update. EW on valuation for Gecina. Our
China/HK Team has upgraded Investors from In-Line to
Attractive with price targets based on bull case scenario
for HK assets.
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