SINGAPORE

SINGAPORE Company
Company Update
Update Results
Results MITA No.
MITA No. 010/06/2010
010/06/2009

17 February 2011
Maintain Lippo-Mapletree Indonesia
BUY Retail
Previous Rating: BUY
FY10 results mostly in line; Maintain BUY
Current Price: S$0.54
Fair Value: S$0.59
4Q DPU of 1.11 S-cents. LMIR Trust (LMIR) reported 4Q10
gross revenue of S$19.3m, up 41.6% YoY but down 4.7%
QoQ. Distributable income however dropped 3.3% YoY but
4000 Lippo- 0.6
rose 2.5% QoQ to S$12.1m. For FY10, gross revenue jumped
3500 Mapletree 0.5 50.9% to S$129.4m, which was in line with our projection of
3000 0.4 S$130m and market expectation of S$131m (based on
2500 STI 0.3 consensus estimate from Bloomberg). Distributable income,
2000 0.2 however, slipped 11.4% to S$47.8m, partly due to higher
1500 0.1
1000 0.0
operating expenses subsequent to the expiry of the Operating
Costs Agreements with third party operators (Opcos) on 31
May-08

May-09

May-10
Jan-08

Sep-08

Jan-09

Sep-09

Jan-10

Sep-10

Dec 2009. Previously, Opcos were given rights to the service

charges receipt and utilities cost recovery from tenants, whilst
responsible for the costs directly related to the maintenance
and operation of seven malls. The operating costs have since
been passed on directly to the REIT in FY10. 4Q DPU is 1.11
S-cents (also in line with our forecast of 1.15 S-cents),
representing an annualized yield of 8.16%, based on
yesterday's closing price of S$0.54. This was 4.1% lower than
Reuters Code LMRT.SI the 1.16 S-cents paid out in 4Q09.
ISIN Code D5IU Portfolio Performance. Overall portfolio occupancy increases
Bloomberg Code LMRT SP 1.4 pp YoY to 98.3%; this compares well against Jakarta's
average occupancy rate of 86.3%. LMIR also benefited from
Issued Capital (m) 1,082
positive rental reversion with renewed leases contracted at
Mkt Cap (S$m / US$m) 584 / 421 10% higher on average than the ones that have expired during
Major Shareholders the year. LMIR continues to have a well-diversified portfolio,
with no particular trade sector accounting for more than 17%
Lanius Ltd 18.3% of total net leasable area (NLA), and no single property
Mapletree LM Pte Ltd 13.1% accounting for more than 18% of total net property income
(NPI). We also noted that LMIR's gearing ratio of 10.3% is
Algemene Pensioen 9.9% relatively low, compared to other retail REITs. This places it in
CPI Capital Partners Asia 8.4% a favorable position to use debt financing to embark on
inorganic growth in FY2011. On the organic-growth front, we
ABN Amro Asset Mngmt 6.4%
also understand that LMIR is exploring asset enhancement
Free Float (%) 43.9% opportunities at some of its existing malls.
Daily Vol 3-mth (‘000) 895
Positive Outlook. Management guided that the Indonesian
52 Wk Range 0.420 - 0.580 economy is projected to remain buoyant1 , which will benefit
the retail industry. Retail leasing has started to pick up in
3Q10, with a large number of leases recorded and several
notable deals witnessed in newly completed projects. Foreign
major retailers were also increasingly active in the market,
(S$ m) FY09 FY10 FY11F FY12F with expansion plans in response to market opportunities.
Revenue 85.8 129.4 125.6 123.6 Furthermore, as new supply is expected to grow moderately
NPI 81.2 85.3 82.9 81.6 in 2011, nationwide vacancy is anticipated to stabilize at around
Distributions 60.1 47.9 50.4 51.4
13.3% by end of 2011. Such a trend helps the market to
maintain stable occupancy and record good rental reversions
Distr yield (%) 8.4 8.2 8.6 8.7 going forward. Our investment thesis for LMIR remains intact,
P/NAV (x) 0.7 0.6 0.7 0.7 supported by Indonesia's growth story and LMIR's quality
assets. Maintain BUY with an unchanged fair value of S$0.592.
1
The World Bank has forecasted Indonesia's GDP to grow at 6.2% and 6.3%
in 2011 and 2012 respectively. IMF has also projected Indonesia's GDP growth
Ong Kian Lin
at 6.2% and 6.5% in 2011 and 2012 respectively.
(65) 6531 9810
e-mail: OngKianLin@ocbc-research.com
2
Key risks to our rating include reversal of recovery trends for the Indonesian
economy, forex risk and deterioration in credit and capital markets.

Please refer to the important disclosures at the back of this document.

LMIR Trust

Exhibit 1: 4Q DPU Details

Source: LMIR's FY10 results

LMIR's Key Financial Data

LMIR Results 4Q10 4Q09 % Chg 3Q10 % Chg
Year Ended 31 Dec (S$ m) (S$m) (S$m) (YoY) (S$m) (QoQ)

Gross revenue 32.2 22.7 41.6% 33.8 -4.7%

Net property income 21.1 19.7 6.8% 22.2 -5.1%
Interest income 0.3 0.6 -45.0% 0.4 -9.7%
Financial expenses -2.4 -2.4 -0.3% -2.4 -0.8%
Total admin expenses -1.9 -1.8 5.5% -1.9 0.1%
Earnings before other credits/revaluations 17.1 16.1 6.1% 18.3 -6.3%
Other credits inc realised forex gains 4.9 -15.2 nm 5.7 -14.1%
Earnings before revaluation 22.0 0.9 2428.0% 24.0 -8.2%
Change in fair value of invt ppty 76.4 98.8 -22.6% 0.0 nm
Profit before tax 98.4 99.6 -1.2% 24.0 310.9%
Profit after tax 83.2 80.2 3.7% 18.8 341.7%

Total distribution 12.0 12.4 -3.3% 11.7 2.5%

Units in issue (m) 1,081.7 1,074.8 0.6% 1,079.9 0.2%
DPU per unit (S cents) 1.11 1.16 -4.1% 1.09 2.0%

Page 2 17 February 2011

LMIR Trust

LMIR Trust's Key Financial Data

EARNINGS FORECAST BALANCE SHEET

Year Ended 31 Dec (S$m) FY09 FY10 FY11F FY12F As at 31 Dec (S$m) FY09 FY10 FY11F FY12F

Gross revenue 85.8 129.4 125.6 123.6 Cash 111.3 110.0 123.3 127.6
Net property income 81.2 85.3 82.9 81.6 Trade and other receivables 20.8 20.2 25.1 24.7
Management fees -5.7 -6.4 -6.0 -5.8 Investment properties 1056.0 1082.0 1062.3 1037.0
Trustee fees -0.2 -0.2 -0.3 -0.3 Total assets 1188.2 1212.5 1210.8 1189.3
Financial expense -8.8 -9.5 -9.3 -9.3 Total current liabilities 31.5 41.0 46.5 46.1
Other credits -91.8 -6.6 0.0 0.0 Other financial liabilities 143.0 144.8 153.4 153.4
Revaluation net forex change 98.8 76.4 -24.1 -26.3 Total non-current liabilities 265.2 269.6 270.7 262.8
Tax -29.3 -29.4 -10.0 -9.1 Total liabilities 296.7 310.6 317.2 308.9
Net profit after tax 45.9 110.3 34.8 32.4 Unitholders' funds 891.5 901.9 893.5 880.4
Income to be distributed 60.1 47.9 50.4 51.4 Total liabilities & equity 1188.2 1212.5 1210.8 1189.3

CASH FLOW
Year Ended 31 Dec (S$m) FY09 FY10 FY11F FY12F KEY RATES & RATIOS FY09 FY10 FY11F FY12F

Net operating cash flows 70.3 51.0 62.4 61.5 Units outstanding (m) 1074.8 1081.7 1089.3 1095.3
Net investing cash flows 1.5 -1.6 0.9 0.9 DPU (S cents) 5.0 4.4 4.6 4.7
Bank borrowings 0.0 0.0 0.0 0.0 CFPS (S cents) 6.5 4.7 5.7 5.6
Distributions paid -44.8 -48.3 -50.4 -51.4 NAV (S$) 0.8 0.8 0.8 0.8
Funds from unitholders 0.0 0.0 0.0 0.0 NPI margin (%) 94.7 65.9 66.0 66.0
Net financing cash flows -54.0 -49.0 -57.1 -58.1 Distr to revenue (%) 70.1 37.0 40.1 41.6
Net cashflow 17.7 0.4 6.2 4.3 Distr yield (%) 8.4 8.2 8.6 8.7
Net effect of exchange rates -0.9 -1.8 0.0 0.0 P/CF (x) 9.2 11.4 9.4 9.6
Cash at beg of year 94.5 111.3 117.1 123.3 P/NAV (x) 0.7 0.6 0.7 0.7
Cash at end of year 111.3 110.0 123.3 127.6 Total Debt/Total Assets (x) 0.1 0.1 0.1 0.1

Source: Company data, OIR estimates

Page 3 17 February 2011

LMIR Trust

SHAREHOLDING DECLARATION:
The analyst/analysts who wrote this report holds NIL shares in the above security.

RATINGS AND RECOMMENDATIONS:

OCBC Investment Research’s (OIR) technical comments and recommendations are short-term and trading
oriented.
- However, OIR’s fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month
investment horizon. OIR’s Buy = More than 10% upside from the current price; Hold = Trade within +/-10%
from the current price; Sell = More than 10% downside from the current price.
- For companies with less than S$150m market capitalization, OIR’s Buy = More than 30% upside from the
current price; Hold = Trade within +/- 30% from the current price; Sell = More than 30% downside from the
current price.

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Page 4 17 February 2011