Out of the Blu

OUE Hospitality Trust – Looking past near-term volatility

Recent market data point to potentially softer earnings in 4Q14 as the hotel segment continues to be impacted by slow visitor arrivals and rupiah volatility. Despite potential near-term earnings fluctuations, we remain bullish on OUE Hospitality Trust as we believe this REIT is well-positioned to ride on a more sanguine tourism outlook for 2015. We reiterate our Add rating with a slightly higher…

IHH Healthcare – Rumours denied

Rumours that IHH Healthcare was interested in an 11.5% stake in BGH surfaced this morning but were quickly refuted by both companies. Our SOP-based target price stays at S$2.16 (RM5.54). Its plans to tap the medical tourism industry through Parkway-Pantai and its Turkish operations and contributions from its new hospitals are potential catalysts. The stock remains an Add.

Media reports said that…

Ascendas India Trust Ready to take off

Acquisition of BlueRidge Phase II a 1.5m sq ft IT property in Pune for up to INR6.4bn (S$133m) Total operating space to increase to 9m sq ft from 7.5m sq ft, exposure lifted to four key Indian IT hubs Potential 1-9% upside to FY15-17F DPU Upgrade to BUY, TP raised to S$0.87

Deploying capital to use. Ascendas India Trust (a-iTrust) announced the acquisition of BlueRidge Phase II, a 1.5m sq ft…

Centurion Corporation Significant home win

Centurion snags tender for of dormitory development land close to Jurong Island The 7,900-bed development includes workers’ dormitory and training centre to be run by ASPRI Total development cost estimated at S$200m Maintain BUY, TP adjusted to S$0.85 as we roll forward valuations

Centurion-Lian Beng JV wins ASPRI tender. Centurion announced that its 51/49 JV with Lian Beng Construction has…

Libra Group – Strong Flow Of Contract Wins

Libra has won SGD5.3m in new contracts for air-conditioning and mechanical ventilation system works for a ramp-up multi-user auto workshop in an industrial area and Ngee Ann Polytechnic Block 22. As it has won jobs totaling SGD27m in the past three months, its orderbook is now at SGD90m (our end-2014 forecast: SGD83m), we maintain BUY with a SGD0.27 TP (38.5% upside). With a turnaround firmly in…

SingTel Benefitting From Growth In Indonesia And India

SingTel benefits from pricing stability and growth in Indonesia and India, the two largest markets for its regional mobile associates. Growth from Telkomsel is driven by growth in data traffic and expansion of subscriber base, while growth from Bharti is driven by expansion of subscriber base and financial deleveraging. Re-iterate BUY with a higher target price of S$4.32.

Telkomsel: Maximising…

CapitaRetail China Trust A cut above the rest; assuming coverage with OW

We assume coverage of CapitaRetail China Trust with an Overweight rating and a Dec-15 PT of S$1.75 (N rating and Dec-14 PT of S$1.55 prior to NR designation). CapitaRetail China Trust has continued to outperform in terms of tenant sales growth and rent reversion, helped by its sizeable exposure to Beijing. With a visible and growing pipeline via its sponsor, CMA, we believe current P/B of 1.07x…

Lippo Malls Indonesia Retail Trust A uniquely positioned stock

Being the only SGX-listed REIT with pure exposure to Indonesia’s retail sector, Lippo Malls Indonesia Retail Trust (LMIRT) is well placed to benefit from a growing pool of middle-class consumers and a potential rise in rental rates due to robust demand from local and international retailers as well as limited supply of new mall space.

We begin coverage with an Add rating and DDM-based target…

Yoma Strategic Holdings – ADB lends support

US$100m loan is ADB’s show of support for Myanmar and Yoma Additional funding strengthens Yoma’s financial position to better support several ongoing developments Maintain BUY, TP: S$0.82

Yoma announced that The Asian Development Bank (ADB) has approved a loan of up to US$100m to the company with the aim of improving infrastructure for sustainable growth in Myanmar. The ADB loan will be…

City Developments – Unique value unlocking platform

We take a positive view of City Developments ’s agreement with Blackstone and CIMB Bank to create a unique S$1.5bn investment platform to invest in the cashflow of its Sentosa Cove properties as it will enable City Developments to unlock and recycle capital value from this project while benefiting from further potential upside through its 37.5% stake in the new platform. The latest valuation is…

CapitaLand – One CapitaLand Strategy To Bear Fruit

Site visits and discussions with staff from ground up to senior management level resonate with the “One CapitaLand” strategy. The streamlining of operations post CMA’s privatisation would help enhance CapitaLand’s competitive strengths in integrated developments, and thus narrow holding company discounts. CapitaLand is on track to deliver ROE target of 8-12% in the next 3-5 years. Maintain BUY.…

ISOTeam – Vote of confidence from strategic business partner

Maintain BUY but with the target price lowered to S$0.62, as we factor in the enlarged share base following the new share placement to Nippon Paint.

ISOTeam (ISO) has proposed to place out 2.8m new ordinary shares to Nippon Paint (Singapore) Company Pte Ltd (Nippon Paint) at S$0.50/share.

Upon completion of the placement and proposed acquisition of Industrial Contracts Marketing Pte. Ltd. by ISO…

Global Logistic Properties Detour to the US

Co-invests with GIC to acquire US$8.1bn US logistics portfolio To pare down initial 55% stake to 10% by Aug15; expand fund management platform Maintain BUY, TP of S$3.42

Acquires stake in US logistics portfolio. Global Logistics Properties (GLP) announced that it will co-invest with GIC (Singapore Government Investment Corporation) to acquire a US$8.1bn US logistics portfolio from Blackstone.…

Parkway Life REIT Start of capital recycling

We like Parkway Life REIT ’s stability, clean corporate structure and management track record but our chief grouse has been on its valuation. However, we expect valuations to improve with 1) narrowing of its premium over book value with the year-end revaluation and 2) capital recycling to add value.

We believe its recent acquisition in Japan is just the start of its capital recycling exercise.…

Boustead Singapore Key takeaways from NDR

During the NDR that we hosted for Boustead, Chairman and CEO Mr Wong Fong Fui shared the group’s strategy and outlook with investors. We still like Boustead’s high-quality management and multi-pronged growth strategy. However, the recent drastic plunge in oil price and the possibility of a prolonged period of low oil prices would cause overhang on Boustead’s energy infrastructure division. We…

Hutchison Port Holdings Positive on potential tariff hike, concern on dividend downside in 2015

YTD results weak, as expected; HK$0.41 2014 DPU guidance should be achieved Q314/9M14 net profit dropped 9%/12% to HK$491m/HK$1.2bn (excluding the March disposal gain). We attribute the earnings weakness to rising labour costs and higher taxes (tax holiday expiry at Yantian), in addition to slow volume growth YTD. 9M14 operating cash flow was HK$3.7bn (up 1% YoY), while capex was HK$841m (up 44%…

SPH Risk to Dividend; Downgrade to Underweight

Despite the 20% drop in underlying earnings and lower dividend for F14, the stock has been resilient. We think this reflects overly optimistic expectations of a dividend hike after the opening of Seletar Mall. We expect a falling dividend with lower earnings growth.

Income from Seletar Mall from December 2014 not likely sufficient to mitigate the decline in Media: SPH paid out 114% of recurring…