MIT

MIT: 9M13 DPU of 6.87c (+11% YoY) beating expectations slightly at 77% of CS and the street’s FY13E. Growth was led by: (1) higher occupancies, overall recovery in rents and strong rent reversions post the expiry of JTC rental caps; and (2) contribution from the JTC’s Tranche two acquisitions (completed in Aug 2011). Portfolio occupancy stayed resilient at 95.2%, with rents inching up, led by strong rent reversions across, especially for flatted factories, although the pace has slowed for its business parks and stack-up/ramp-up facility. Retention ratio maintained QoQ at 86%. Overall, Gearing remains comfortable at 37.1% (target: 40-50%). CS raise DPU by 4.2-4.8% for FY13-15E to adjust for better-than-expected rents, although this is mainly driven by the expiry of the JTC rental caps. New TP is S$1.50 (from S$1.42). Maintain NEUTRAL. While its yields look attractive at 6.7%, believe this offsets its portfolio risk, which could come under pressure as MINT’s portfolio consists of quite a number of SMEs, which are finding it increasingly challenging given the rising cost environment. Ratings as follow: CIMB maintains Neutral with $1.50 TP CS maintains neutral with $1.50 TP Deutsche maintains Buy with $1.50 TP