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Saturday, 25 March 2017

Lippo Malls Indonesia Retail Trust

26/3/2017
Accumulate:
  1. Strong fundamentals - price a bit high but justified by DPU CAGR 2% qoq
  2. Favorable Indonesian economy
  3. Attractive dividend yield - 8.6%
  4. Potential future acquisitions - low debt

Metrics
Last Done (as of 26/3/2017): S$0.395
AUM: S$1,949.4 million
Debt: Gearing 31.5%, WADM 2.59 years, 19.2% expiring in 2017, 70% fixed, Cost of debt 4-7%, SGD
Occupancy: 94.3%, WALE 4.51 years, 23% of leases expiring in 2017
NAV: S$0.39, PNAV 1.01
Dividend: 2016 DPU: S$0.0341, Dividend yield: 8.6%, CAGR 2% qoq
NPI: CAGR 7.68%

Operations
20 retail malls and 7 retail spaces across Indonesia
Diversified trade mix
Top 10 tenants contribute approximately 22% of Portfolio’s Gross Rental Income
Top tenant 9.5% of gross rental income

Growth story
Favorable Indonesian economy, tax amnesty could increase money flow into economy
Low debt allows for acquisitions
IDR/SGD might have bottomed

Risks
IDR/SGD could decline more
Income support from acquisition of Kemang Mall. Yield would only be 7% without income support
Short land leases - land leases that average 17 years



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