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What Investors Should Know About Dasin Retail Trust’s Latest Earnings Update And Valuation

Lawrence Nga

Dasin Retail Trust (SGX: CEDU) is the only property trust listed in Singapore’s stock market that focuses on retail malls in China’s Pearl River Delta region. The trust’s portfolio currently comprises four malls in Zhongshan City of China’s Guangdong province.

There are two things to know about the REIT right now: Its latest financial performance and valuation.

Financial performance

Here is a table showing important items from Dasin Retail Trust’s income statement for the first quarter of 2018.


Source: Dasin Retail Trust earnings presentation

The REIT’s gross revenue, net property income, amount of available for distribution, and distribution per unit (DPU) all came in higher compared to a year ago, and to the forecast given in its IPO (initial public offering) prospectus. The stronger performances were due to a better overall operational performance from the REIT’s portfolio, and new contributions from the acquisition of Shiqi Metro Mall in June 2017.

As of 31 March 2018, Dasin Retail Trust had a gearing ratio of just 30.4%, which is far below the regulatory gearing limit of 45%. Meanwhile, its occupancy rate stood at 100%.

In all, Dasin Retail Trust enjoyed a strong quarter, with it posting strong growth, and performing better than expected.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows Dasin Retail Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.


Source: SGX Stock Facts

We can see that Dasin Retail Trust is trading at a significant discount to the market-average, given its much lower PB ratio and distribution yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned.