Excerpts from SooChow CSSD Capital Markets report
Analyst: Tan Cheng Wee, CAIA
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EC World REIT |
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♦ Wuhan Meiluote acquisition completed, Sponsor’s ROFR asset imminent: Maiden acquisition Wuhan Meiluote (RMB145m, anchored by e-commerce tenants Jing Dong and Dang Dang) was completed on 28 Feb 18. 
(L-R): CEO Goh Toh Sim | CFO Johnnie Tng | Head Investment, Asset Management and Investor Relations Jinbo Li. NextInsight file photo.We reiterate our view that Sponsor ROFR asset, phase 3 of the Fu Zhou e-commerce properties is ripe for injection after commencing operations, which could increase ECW’s underlying asset GFA by 34%.
♦ YCH Group (YCH) partnership a visible acquisition roadmap: The sponsor is jointly exploring with YCH to invest in logistics assets across China and South East Asia.
i) Near term, YCH will bring a portfolio of 13 logistics assets c.$400m and spanning 280,000sqm GFA for potential acquisition with YCH lessee and operator
ii) Longer horizon, ECW and YCH is expected to launch a US$150m logistics PERE fund in 2H18.
| ♦ Maintain BUY: ECW may enjoy yield compression as investors gradually digest the potential steepening of the inorganic growth trajectory and rising exposure to logistics e-commerce sector. Maintain BUY rating and a TP of S$0.88/unit. ECW REIT offers attractive FY18E yield of 8.3% and currently trading at undemanding 0.8x P/B. |
See also: EC WORLD REIT: 1Q18 distribution dips on withholding tax
