Equity Analysis /
Australia

AU : Home Consortium - Executing on strategy

    Fiona Buchanan
    Fiona Buchanan

    Head of Morgans Research

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    CGS-CIMB
    19 January 2021
    Published byCGS-CIMB

    HMC had an active end to 2020 after spinning off the HomeCo Daily Needs REIT (HDN) on 23 November; new acquisitions; and a capital raising. We expect 2021 to start with the execution of the Health, Wellness Government REIT (A$400m in AUM currently and expected to grow further). AUM currently stands at A$1.7bn across 47 assets with a pathway to grow to A$5bn over the near term. We expect solid growth over the forecast period. HMC is quickly evolving into a capital light model with income sourced via rental income, distributions, fee income and developments. We expect the next trading update with the interim result on 24 February. Cash collection from operating assets was expected to reach 98-99% by Nov 2020. We retain an Add rating with a revised price target of A$4.27.