Personally i think that while this is a good stock for dividend yield, the capital gain might not be as quick as expected.
fyi
| Company | Share Price | Rec | Our Target Price | Within Expectation (Y/N) | Profit YoY | Profit QoQ | Highlights of Results |
| Keppel Infrastructure Trust (KIT) | 0.515 | HOLD | 0.560 | N | n.m. | n.m. | See comments below |
KIT reported 2QFY16 distributable cashflow of S$32.9m, below our quarterly estimate of S$35.3m by 7%.
- 2QFY16 distributable cashflow was lower than expected primarily to a shortfall in City Gas's contribution (see point 2). The quarter also represented the first quarterly result with full 3 months contribution from Crystal Trust's assets (ex-KIT).
- City Gas contributed lower than expected distributable cashflow of S$7.3m in 2QFY16 vs S$11.2m in 2QFY15. The shortfall was due to a time lag in adjustment of gas tariffs with actual fuel costs. The business unit also saw higher interest expense from hedging of its underlying loan. As this is a timing issue, the shortfall is expected to be reversed later in the year.
- Concessions contribution to distributable cashflow was S$17m, in-line with expectations.
- KMC contributed distributable cashflow of S$12m for the quarter, S$1m higher than expectation of S$11m per quarter owing to a one-off gain from hedging. It is expected to normalise to S$11m going forward.
- Basslink did not contribute to distributable cashflow for 2QFY16 as per management guidance, as its cashflows are being diverted to reduce Basslink's debt. We note that revenue for the unit was lower due to higher CRSM, which hit the maximum 20% penalty for the period.
- KIT declared distributable payout per unit (DPU) of 0.93 S cents for 2QFY16. This is in-line with guided annualised DPU of 3.73 S cents, after accounting for rounding errors.The current DPU is payable on 20 Nov 15; book closure is 27 Oct 15.
Zhiwei Foo
UOB Kay Hian (Singapore) Pte Ltd
8 Anthony Road, Singapore 229957
Tel: +65 6535 6868
Dir: +65 6590 6626
E-mail: zhiwei@uobkayhian.com
This transmission has been issued by a member of the UOB Kay Hian Group for the information of the addressee only and should not be reproduced and/or distributed to any other person. Each page attached hereto must be read in conjunction with any disclaimer which forms part of it. Unless otherwise stated, this transmission is neither an offer nor the solicitation of an offer to sell or purchase any investment. Its comments are based on information obtained from sources believed to be reliable but UOB Kay Hian Group makes no representations and accepts no responsibility or liability as to its completeness or accuracy.
