Published in BT on July 30, 2005
Suntec Reit's proposed $1b acquisitions may not fly
Doubts reinforced by Temasek chief's earlier comments
(SINGAPORE) Market watchers are wondering if Suntec Real Estate Investment Trust's recent deals to buy $788 million worth of assets from City Developments will proceed in its current form in view of Temasek Holdings chief executive Ho Ching's caution to investors about some hazards in the Reit market.
Suntec's proposed acquisition announced a month ago involves deferred payment of nearly 10 per cent of the purchase price through the issue of units in Suntec Reit.
In her speech on Thursday night, Ms Ho warned investors to be wary about such deferred payments, without naming any particular Reit that might be using such financing structures. Analysts told BT that by deferring the issue of units for part of the payment for an asset acquisition, the idea is to reduce dilution and hence achieve an increase in the Reit's distribution per unit.
Suntec's $788 million acquisition of 11 properties from CityDev as well as the $230 million purchase of Wing Tai's Park Mall - both announced at the same time last month - need to be approved by the Reit's unitholders. But even before that, the circular for the unitholders' extraordinary general meeting, where their approval will be sought, has to be approved by the Singapore Exchange and Monetary Authority of Singapore, seasoned Reit players told BT. The deal in its current form might not make the cut even at that stage, some sources suggest.
Another interesting point analysts note in Suntec Reit's Q3 results announcement this week is that it has revalued its existing assets, namely the Suntec City complex, upwards by about 5 per cent or $107.4 million. Reits usually revalue their assets only at the end of their financial year. Because gearing limits for Reit are pegged to the value of their property portfolio, raising the value of the existing Suntec City complex's value would allow Suntec Reit to borrow more, which would facilitate further acquisitions.
Analysts believe that without the Suntec City revaluation and the deferred payment component of the CityDev deal, the $1.018 billion acquisitions from CityDev and Wing Tai would not be yield accretive to Suntec Reit.
The trust has not revealed the property yield on the assets it is buying from CityDev and Wing Tai but some analysts estimate it is slightly under 4 per cent. After deferred payment and gearing, that could be raised to a level that may be accretive to unit holders of Suntec Reit, which is currently trading on the stock market at a distribution yield of about 5.1 per cent. In her speech, Ms Ho referred to deferred issue of units in Reits in an asset purchase as 'charades' which 'shore up short-term performance indicators at the expense of longer-term pain'. She said: 'If for whatever reason, rental rates cannot improve or asset enhancements fail to raise operating income, such deferred financial burdens could become very painful for the unit holders.'
Some analysts say Suntec Reit may still be able to salvage the deal. Its contract with CityDev allows a cash payment instead of deferred payment for the 10 per cent of the purchase price, provided that the authorities allow the gearing cap for Reits to be raised from 35 per cent now to at least 50 per cent.
The MAS is currently reviewing Reit guidelines. Last month, it issued a consultation paper that sought feedback on a host of matters relating to Reits including whether the borrowing limit for Reits should be raised to 60 per cent, provided the Reit obtains and discloses a credit rating from a major rating agency.
By having a higher gearing component and hence a proportionately smaller equity component, the return on equity to a Reit's unit holders goes up. But that may be seen as yet another form of financial engineering.
Already, even before Ms Ho's speech was delivered on Thursday evening, there had been murmurs in the market that some of Suntec Reit's institutional shareholders were not delighted with the trust's proposed acquisition from CityDev. 'Firstly, it is not yield accretive looking at the upfront property yield, and secondly they don't see much growth in the assets,' a source told BT.
The properties that Suntec Reit is buying include the City House and Fuji Xerox Tower office buildings; Plaza by the Park along Bras Basah Road; and remaining strata units at Fortune Centre in Middle Road and Golden Mile Complex at Beach Road.
Industry observers also say Suntec could go back to CityDev to renegotiate downwards the price of the acquisition to a level where it becomes yield-accretive for the Reit's unit holders, or alternatively purchase only those properties in the package which would be yield accretive.
Up to 10 pm last night, Suntec Reit's top officials could not be contacted.
My Comments - With BT's continued focus (3 articles in one week) on Suntec, we can no longer ignore the power of the press plus the words of the world's 30th most influential woman combined. I hope I'm wrong, but be prepared for downside price pressure on Suntec on Monday (1-Aug) and possibly CDL and Wing Tai.
I'll likely reduce my Suntec stake further if it's still not too late. Price may be well supported due to recent bullish recommendations by several analysts and Monday being the last day of cd (cum dividend). But, if it drops to below $1.15, I'll take the risk to do some accumulation. I'll watch the mkt reaction closely and make decisions on the fly :D
It may even affect all Property and Bank stocks which had gone up quite a lot recently. In the worst case scenario, the whole stock market, as it's due for consolidation anyway. If that happens, we all know who to blame :D
What can save the situation now is for Suntec to come out to rebut the news reports and especially to clarify on the yield of the acquisitions. Another unlikely possibility is for Temasek's Head to clarify that her comments had been blown out of proportion by the press :D
Previous Post on Suntec
Disclaimer : The above is just my opinion. Do not rely on it for your investment decisions
Saturday, July 30, 2005
SGX Market Commentary
Published by BT dated July 30, 2005
Banks, Mapletree light up busy week
OTHER than a continued play on property and banks, the other standout features this week were the Mapletree Logistics listing, the selling of Chartered Semiconductor and Stats ChipPac, and the new all-time highs reached by Biosensors, KS Energy, Labroy Marine, Cosco Corp and the Jardine group, with the latter enabling the Straits Times Index to achieve levels not seen since the start of 2000.
Looked at differently, interest was diffuse, stock-specific and very discriminating. For instance, although property and banks were active, not all rose as they did the week before when the government first announced its relaxed property package.
CapitaLand, Keppel Land and, to a slightly lesser extent, City Developments still enjoyed some post-government package interest, but there seemed to be a cooling off of interest in others like Wing Tai, Allgreen, and Ascott.
The same was evident in banks, where the focus very quickly switched from expectations of more housing loan business to second quarter results. DBS, for example, yesterday added 40 cents to $16.10 after releasing its profit and dividend figures. By itself, DBS contributed 6 points to the Straits Times Index, which finished the day 6.37 points stronger at 2,352.56. Excluding warrants, the broad market's advance-decline score was 163-182, indicating a generally weak day not captured by the bank-driven index.
Thanks to almost 14 million done in DBS and 8.6 million in OCBC, turnover, excluding foreign currency issues, yesterday was 901 million units worth $1.23 billion, the third consecutive day the billion dollar mark was crossed. Non-Sing dollar issues traded 26 million units. For the week, the index gained 33 points or 1.4 per cent, driven mainly by the banks, property and Jardine stocks.
As for other counters that saw meaningful action, much depended on the issuance of broking firm research. Shipping firm Cosco Corp, for example, sailed to fresh highs early in the week, thanks to 'buy' calls from DBS-Vickers and CIMB-GK Goh, while Biosensors has been on the 'buy' lists of a few local and foreign houses - hence the interest which has seen the counter gain more than 50 per cent since listing in May. Cosco, however, dropped five cents yesterday to $2.32 after UBS Investment Research said in a report on the offshore segment that based on its target price of $1.90, Cosco looks expensive.
Negative news or a 'sell' recommendation can have painful consequences, as companies like Huan Hsin, Chartered and Stats ChipPac found out. Huan Hsin caved in after Kim Eng Securities called a 'hold' in anticipation of weak earnings, while Chartered and Stats came under pressure after both reported second quarter losses that brought out a slew of 'sell' calls.
Meanwhile, the market's first logistics and warehouse property trust Mapletree made a solid debut on Thursday, finishing with a 30 per cent premium over its 68-cent offer price and remaining well-supported yesterday.
Banks, Mapletree light up busy week
OTHER than a continued play on property and banks, the other standout features this week were the Mapletree Logistics listing, the selling of Chartered Semiconductor and Stats ChipPac, and the new all-time highs reached by Biosensors, KS Energy, Labroy Marine, Cosco Corp and the Jardine group, with the latter enabling the Straits Times Index to achieve levels not seen since the start of 2000.
Looked at differently, interest was diffuse, stock-specific and very discriminating. For instance, although property and banks were active, not all rose as they did the week before when the government first announced its relaxed property package.
CapitaLand, Keppel Land and, to a slightly lesser extent, City Developments still enjoyed some post-government package interest, but there seemed to be a cooling off of interest in others like Wing Tai, Allgreen, and Ascott.
The same was evident in banks, where the focus very quickly switched from expectations of more housing loan business to second quarter results. DBS, for example, yesterday added 40 cents to $16.10 after releasing its profit and dividend figures. By itself, DBS contributed 6 points to the Straits Times Index, which finished the day 6.37 points stronger at 2,352.56. Excluding warrants, the broad market's advance-decline score was 163-182, indicating a generally weak day not captured by the bank-driven index.
Thanks to almost 14 million done in DBS and 8.6 million in OCBC, turnover, excluding foreign currency issues, yesterday was 901 million units worth $1.23 billion, the third consecutive day the billion dollar mark was crossed. Non-Sing dollar issues traded 26 million units. For the week, the index gained 33 points or 1.4 per cent, driven mainly by the banks, property and Jardine stocks.
As for other counters that saw meaningful action, much depended on the issuance of broking firm research. Shipping firm Cosco Corp, for example, sailed to fresh highs early in the week, thanks to 'buy' calls from DBS-Vickers and CIMB-GK Goh, while Biosensors has been on the 'buy' lists of a few local and foreign houses - hence the interest which has seen the counter gain more than 50 per cent since listing in May. Cosco, however, dropped five cents yesterday to $2.32 after UBS Investment Research said in a report on the offshore segment that based on its target price of $1.90, Cosco looks expensive.
Negative news or a 'sell' recommendation can have painful consequences, as companies like Huan Hsin, Chartered and Stats ChipPac found out. Huan Hsin caved in after Kim Eng Securities called a 'hold' in anticipation of weak earnings, while Chartered and Stats came under pressure after both reported second quarter losses that brought out a slew of 'sell' calls.
Meanwhile, the market's first logistics and warehouse property trust Mapletree made a solid debut on Thursday, finishing with a 30 per cent premium over its 68-cent offer price and remaining well-supported yesterday.
Tuesday, July 26, 2005
UOL @ $2.29
UOL announced the unaudited second quarter financial statement today and the following is the summarized result. 2Q Report
| UOL | 2Q05 | 2Q04 | 1H05 | 1H04 |
|---|---|---|---|---|
| Turnover ($'000) | 101,552 | 102,436 | 203,808 | 204,821 |
| Pretax Profit ($'000) | 48,375 | 38,192 | 75,311 | 66,918 |
| Net Profit ($'000) | 37,257 | 38,192 | 58,372 | 56,086 |
| Dividend Declared | Nil | Nil | Nil | Nil |
The turnover for UOL in the second quarter is lower compared to 2Q04 and the profit is down around 2%. For year 2005(End 30 June 05), there is still a profit increase of around 4%. Based on the income statement for 2nd quarter, hotel operation, service charge, interest and foreign exchange gain are the main operation that contribute higher revenue in 2nd quarter.
Comments:The main reason for lower property investment is due to the absence of income from UOB building in Xiamen, China and the UOL building along Somerset Road, Singapore, which are undergoing conversion and redevelopment. Furthermore, with the sale of UOB share, dividend income is also reduced. Result of the associates were affected by the closure of 25% owned Marina Mandarin Hotel for major refurbishment works in May 2005.
The positive news from the report is that the NAV per share for the group has increased from $2.42 to $2.81 and NAV per share for the company has increased from $1.51 to $.182.
The only positive news from the annoucement is that the NAV per share has improved. With Singapore economy improving and tourist expect to increase in the next two quarters, the hotel operation should improve the revenue for UOL. In additional with major refurbishment work completing soon. It should yield higher rent from the improving market.
Previous Post
Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK. Make your own decision for any investment.
Previous Post
Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK. Make your own decision for any investment.
Suntec REIT - Q3/05 Results
Extract fm Press Release,
Singapore, 26 July 2005 - ARA Trust Management (Suntec) Limited (“ARA Suntec”), the Manager of Suntec REIT, is pleased to announce a higher than forecast income available for distribution to unitholders of S$20.1 million for the period 1 April 2005 to 30 June 2005.
Year-to-date DPU exceeds forecast by 5.2%. Distribution per unit (“DPU”) year-to-date and for the period under review are 3.42 cents and 1.56 cents respectively. This is 5.2% and 5.0% higher than the forecast respectively. Year-to-date, Suntec REIT would have delivered an annualized DPU of 6.11 cents, providing unitholders with a distribution yield of 5.1% based on the closing price of S$1.19 per unit on 25 July 2005.
Mr Yeo See Kiat, Acting CEO of ARA Suntec, said, “Suntec REIT has outperformed DPU forecast again. Our pro-active leasing efforts coupled with a strengthening office market have resulted in committed office occupancy jumping close to 90%. Strong demand for prime office space amidst a tightening supply resulted in an 11.1% increase in achieved office rents compared to forecast for new/renewal leases that came into effect in the last quarter.
On the retail front, Suntec REIT continues to register a double digit growth in retail rents from preceding levels. This provides further evidence of Suntec REIT’s relatively strong organic growth potential. Together with the 1st phase of our asset enhancement plans, our unitholders will be embarking on a rewarding journey aimed at harnessing the potential of the assets. For example, we added 31 pushcarts in the mall last quarter (from 8 pushcarts in the previous quarter) which are expected to generate an additional revenue of over S$1 mil per annum.”
Office Occupancy and Rentals Continue to Rise. Strong demand for office space at Suntec City continued to boost occupancy, from actual occupancy of 75% as at 9 December 2004 (date of listing) to a committed occupancy level of 89.3% as at 30 June 2005. In addition, achieved rental rates rose to S$4.52 psf for new and renewal leases that came into effect during the period under review. This is 11.1% higher than the average forecast rental rate of S$4.076 for FY2005. With limited supply of quality office space over the next 3 years and an expected increase in demand for office space in tandem with sustained economic growth, occupancy and rentals are expected to continue on the upward trend. In addition, the strong interest in the new Business Financial Centre site highlights the renewed investor confidence in the office sector.
Rising Retail Rents & High Occupancy. Suntec City Mall continues to record double digit growth in rental rates from preceding levels for leases replaced/renewed during the reporting period. On a year-to-date basis, rental rates have increased by an average of 12.5% from preceding levels. This is significantly higher than the island wide average increase of a low single digit – a reflection of Suntec City Mall’s relatively strong organic growth potential. The retail sector is expected to remain robust, bolstered by positive economic growth, limited supply of prime retail space, and the government’s efforts to promote the tourism industry. The retail committed occupancy level as at 30 June 2005 has strengthened to 96.2% as at 30 June 2005.
Revenue & Asset Enhancement Plans on Track. In the last quarter, the Manager commissioned AC Nielsen to carry out a comprehensive consumer survey. The survey was completed in June and the findings were used to evaluate, affirm and fine-tune its strategy on the asset enhancement plans. In the period under review, the Manager also embarked on the re-positioning of a 39,317 sq ft area of retail space area on the 3rd floor of the Tropics zone
into a children and infant lifestyle specialty zone called Happy Kidz.
Renovation works is in progress with a formal launch expected before Christmas. The new zone is expected to generate an additional revenue of ~S$3 mil per annum. Several new zones have also been identified and would be implemented over a 1-2 year period. These include a proposed new Youth zone, a proposed new Food Hall and a proposed new Digital World zone. These initiatives are expected to increase existing revenue from these areas by more than 50% after the enhancements.
The Manager is pro-active in identifying new sources of revenue through various initiatives and asset enhancement plans. In the period under review, the advertising & promotions revenue increased by more than 30% and the pushcart revenue jumped by more than two folds.
Acquisition strategies to deliver yield accretive acquisitions. The Manager continues to pro-actively seek yield accretive acquisition targets, focusing on opportunities in the new growth corridors surrounding the Marina Bay Enclave and the Civic & Cultural District.
Another area of focus is the strengthening office sector where the Manager believes there will be significant growth from rising rental rates and capital values.
On an opportunistic basis, the Manager also seeks to participate in the robust retail market, or acquire assets where there are potential for growth. Mr Yeo commented, “The developments relating to the new Business Financial Centre will not only shift focus to the proposed new downtown but will also be a catalyst for urban renewal in the existing Central Business District. We are excited about the proposed acquisitions for Park Mall and CDL properties as the properties provide both the strategic fit in terms of being largely located in the growth corridors and additional exposure to the strengthening office sector.”
My Comments - The results is just below my own forecast at stockpick. Was expecting an annualised yield of 5.3~5.5% @ $1.18. But, the payment of a quarterly dividend was unexpected. Provided brief on their plans of the new acquisitions fm CDL & Wing Tai but no info on the financial impact. Most likely, they'll do that in their prospectus when they issue new shares to fund the acquisitions.
If investors are rational, I expect Suntec to trade at least aro' $1.20 (5.2% yield) to $1.25 (5% yield) on 27-Jul when mkt opens. If they are very very rational, then higher than $1.25 (4.8% @ $1.30 ; 4.5% @ $1.39).
Announcements dated 26-Jul,
Singapore, 26 July 2005 - ARA Trust Management (Suntec) Limited (“ARA Suntec”), the Manager of Suntec REIT, is pleased to announce a higher than forecast income available for distribution to unitholders of S$20.1 million for the period 1 April 2005 to 30 June 2005.
Year-to-date DPU exceeds forecast by 5.2%. Distribution per unit (“DPU”) year-to-date and for the period under review are 3.42 cents and 1.56 cents respectively. This is 5.2% and 5.0% higher than the forecast respectively. Year-to-date, Suntec REIT would have delivered an annualized DPU of 6.11 cents, providing unitholders with a distribution yield of 5.1% based on the closing price of S$1.19 per unit on 25 July 2005.
Mr Yeo See Kiat, Acting CEO of ARA Suntec, said, “Suntec REIT has outperformed DPU forecast again. Our pro-active leasing efforts coupled with a strengthening office market have resulted in committed office occupancy jumping close to 90%. Strong demand for prime office space amidst a tightening supply resulted in an 11.1% increase in achieved office rents compared to forecast for new/renewal leases that came into effect in the last quarter.
On the retail front, Suntec REIT continues to register a double digit growth in retail rents from preceding levels. This provides further evidence of Suntec REIT’s relatively strong organic growth potential. Together with the 1st phase of our asset enhancement plans, our unitholders will be embarking on a rewarding journey aimed at harnessing the potential of the assets. For example, we added 31 pushcarts in the mall last quarter (from 8 pushcarts in the previous quarter) which are expected to generate an additional revenue of over S$1 mil per annum.”
Office Occupancy and Rentals Continue to Rise. Strong demand for office space at Suntec City continued to boost occupancy, from actual occupancy of 75% as at 9 December 2004 (date of listing) to a committed occupancy level of 89.3% as at 30 June 2005. In addition, achieved rental rates rose to S$4.52 psf for new and renewal leases that came into effect during the period under review. This is 11.1% higher than the average forecast rental rate of S$4.076 for FY2005. With limited supply of quality office space over the next 3 years and an expected increase in demand for office space in tandem with sustained economic growth, occupancy and rentals are expected to continue on the upward trend. In addition, the strong interest in the new Business Financial Centre site highlights the renewed investor confidence in the office sector.
Rising Retail Rents & High Occupancy. Suntec City Mall continues to record double digit growth in rental rates from preceding levels for leases replaced/renewed during the reporting period. On a year-to-date basis, rental rates have increased by an average of 12.5% from preceding levels. This is significantly higher than the island wide average increase of a low single digit – a reflection of Suntec City Mall’s relatively strong organic growth potential. The retail sector is expected to remain robust, bolstered by positive economic growth, limited supply of prime retail space, and the government’s efforts to promote the tourism industry. The retail committed occupancy level as at 30 June 2005 has strengthened to 96.2% as at 30 June 2005.
Revenue & Asset Enhancement Plans on Track. In the last quarter, the Manager commissioned AC Nielsen to carry out a comprehensive consumer survey. The survey was completed in June and the findings were used to evaluate, affirm and fine-tune its strategy on the asset enhancement plans. In the period under review, the Manager also embarked on the re-positioning of a 39,317 sq ft area of retail space area on the 3rd floor of the Tropics zone
into a children and infant lifestyle specialty zone called Happy Kidz.
Renovation works is in progress with a formal launch expected before Christmas. The new zone is expected to generate an additional revenue of ~S$3 mil per annum. Several new zones have also been identified and would be implemented over a 1-2 year period. These include a proposed new Youth zone, a proposed new Food Hall and a proposed new Digital World zone. These initiatives are expected to increase existing revenue from these areas by more than 50% after the enhancements.
The Manager is pro-active in identifying new sources of revenue through various initiatives and asset enhancement plans. In the period under review, the advertising & promotions revenue increased by more than 30% and the pushcart revenue jumped by more than two folds.
Acquisition strategies to deliver yield accretive acquisitions. The Manager continues to pro-actively seek yield accretive acquisition targets, focusing on opportunities in the new growth corridors surrounding the Marina Bay Enclave and the Civic & Cultural District.
Another area of focus is the strengthening office sector where the Manager believes there will be significant growth from rising rental rates and capital values.
On an opportunistic basis, the Manager also seeks to participate in the robust retail market, or acquire assets where there are potential for growth. Mr Yeo commented, “The developments relating to the new Business Financial Centre will not only shift focus to the proposed new downtown but will also be a catalyst for urban renewal in the existing Central Business District. We are excited about the proposed acquisitions for Park Mall and CDL properties as the properties provide both the strategic fit in terms of being largely located in the growth corridors and additional exposure to the strengthening office sector.”
My Comments - The results is just below my own forecast at stockpick. Was expecting an annualised yield of 5.3~5.5% @ $1.18. But, the payment of a quarterly dividend was unexpected. Provided brief on their plans of the new acquisitions fm CDL & Wing Tai but no info on the financial impact. Most likely, they'll do that in their prospectus when they issue new shares to fund the acquisitions.
If investors are rational, I expect Suntec to trade at least aro' $1.20 (5.2% yield) to $1.25 (5% yield) on 27-Jul when mkt opens. If they are very very rational, then higher than $1.25 (4.8% @ $1.30 ; 4.5% @ $1.39).
Announcements dated 26-Jul,
- Financial Statements
- Press Release
- Presentation Part 3 : Plans for CDL & Wing Tai Acquisitions
- Presentation Part 2 : Plans for Suntec City
- Presentation Part 1 : Results & Plans for Suntec City
Disclaimer : The above is just my opinion. Do not rely on it for your investment decisions
Saturday, July 23, 2005
Mapletree Logistics Trust - IPO Results
Extract fm SGX announcement,
MAPLETREE LOGISTICS TRUST
OFFERING PRICE
Following the close of the Offering (as defined in the prospectus of MLT dated 18 July 2005 (the “Prospectus”) at 8.00 a.m. on 22 July 2005, the Board of Directors of the Manager is pleased to announce that the Offering Price has been fixed at S$0.68 per Unit.
OFFERING PRICE
Following the close of the Offering (as defined in the prospectus of MLT dated 18 July 2005 (the “Prospectus”) at 8.00 a.m. on 22 July 2005, the Board of Directors of the Manager is pleased to announce that the Offering Price has been fixed at S$0.68 per Unit.
APPLICATIONS AND INDICATIONS OF INTEREST RECEIVED
At the close of the Offering, 35,237 valid applications pursuant to the Public Offer were received for a total of approximately 1.341 billion Units (excluding the 17,697,000 Mapletree Reserved Units, which have been fully applied for by the Eligible Applicants). In addition, indications of interest pursuant to the Placement Tranche were received for a total of approximately 14.325 billion Units. The total demand for approximately 15.683 billion Units under the Offering represents approximately 43.88 times the 357,377,000 Units available for subscription under the Offering (assuming that the Over-allotment Option is fully exercised).
Demand from retail investors (including indications of interest from retail investors applying through institutions and brokerage firms pursuant to the Placement Tranche) amounted to approximately 9.335 billion Units representing approximately 60% of the total demand. Institutional investors accounted for the balance of approximately 40% of the total demand.
ALLOCATION BETWEEN THE PLACEMENT TRANCHE AND THE PUBLIC OFFER
Taking into consideration the applications for the Units under the Offering and the indications of interest received, and to ensure a reasonable spread of unitholders in MLT (“Unitholders”), DBS Bank Ltd ("DBS Bank") and UBS AG, acting through its business group, UBS Investment Bank "UBS", and together with DBS Bank, the "Underwriters"), intend to over-allot an additional 46,500,000 Units. As a result, the Underwriters, in consultation with the Manager, have decided that the aggregate of 357,377,000 Units under the Offering will be allocated to be issued or sold as follows:
(a) 307,377,000 Units under the Placement Tranche; and
(b) 50,000,000 Units under the Public Offer (inclusive of 17,697,000 Mapletree Reserved Units).
APPLICATION RESULTS FOR THE PUBLIC OFFER
To ensure a reasonable spread of Unitholders, the Underwriters, in consultation with the Manager, have decided that successful applicants who submitted valid applications for the 32,303,000 Units available under the Public Offer (excluding the Mapletree Reserved Units) complying in full with the terms and conditions set out in the Prospectus, and who have been successfully balloted, will be allocated all or a proportion of the Offer Units for which they have applied. The allocations are as follows:
| Range of Units applied for under the Public Offer ('000) | Balloting | Number of Units allocated per Successful Applicant ('000) |
|---|---|---|
1 | 10 : 50 | 1 |
2 to 9 | 12 : 50 | 1 |
10 to 49 | 22 : 50 | 2 |
50 to 99 | 26 : 50 | 3 |
100 to 499 | 30 : 50 | 3 |
500 to 999 | 32 : 50 | 4 |
1,000 and above | 35 : 50 | 7 |
COMMENCEMENT OF TRADING AND REFUNDS
It is expected that the Units will be credited to the securities accounts of the successful applicants with The Central Depository (Pte) Limited ("CDP") by 9.00 a.m. on 28 July 2005. The Units are expected to commence trading on a "ready" basis at 9.00 a.m. on 28 July 2005, subject to the SGX-ST being satisfied that all conditions necessary for the commencement of trading in the Units on a "ready" basis have been fulfilled. It is expected that there will be NO trading on a "when issued" basis.
My Comments - Results already out, I already checked online under ESA Results (for DBS/POSB online application). Good chance of getting from ballot if you'd applied for 10lots or more, 44%-70% chance.
Very strong response, 41.5x from public applications & 46.6x from placements for overall 43.88x over-subscription. Will for sure open strongly when trading starts on 28-Jul.
Currently, local listed REITS are going for 4-5% yield (My est., based on last Friday's close are: CMT 3.953%, CCT 4.320%, A-REIT 4.793%, Suntec 5.087%), so expect MapleTree to move to aro' the same range, worst case, at least 5.5% (assuming all listed REITs price drop for their yield to move up closer to MapleTree's 6%). A-REIT (4.793%) is the closest benchmark as it's also in Industrial Assets. Yield vs Price data for MapleTree,
- 6.0 % => $0.68
- 5.5% => $0.7418 (+$0.06)
- 5.0% => $0.816 (+$0.135)
- 4.5% => $0.9067 (+$0.225)
- 4.0% => $1.02 (+$0.34)
The yield for Fortune REIT, where all assets are in HK is 5.325%.
Disclaimer : The above is just my opinion only, do not rely on it for your investment decisions
Thursday, July 21, 2005
Yuan / Ringgit Repeg
BEIJING : China revalued its currency on Thursday for the first time in about a decade, fixing the yuan at 8.11 to the US dollar, up from 8.28, and also scrapping the decades-old peg to the dollar in a favour of basket of currencies. "From today, the renminbi rate against the US dollar will appreciate by 2 percent," said the website of China's central bank, the People's Bank of China, BOC) on Thursday. "One US dollar will exchange for 8.11 yuan." The move comes after months of political pressure on China.
But as soon as China made the move, Malaysia was forced into action and almost immediately, announced that it was moving to a managed float system for the ringgit. Central Bank governor Zeti Akhtar Aziz said this would have a positive effect on the Malaysian economy. Zeti declined to state the new value of the ringgit, which is widely seen as undervalued. Malaysia pegged its currency at 3.8 to the dollar on September 1, 1998, following the Asian financial crisis.
For months, Beijing has resisted calls to revalue its yuan. It stood steadfast against political pressure from the United States where manufacturers argued that their bottomlines had been hurt because the yuan was kept artificially low. US officials say the yuan's fixed exchange rate against the dollar has left the Chinese currency significantly undervalued, lifting Chinese exports, giving them an unfair advantage, and inflating the US trade deficit. However Chinese leaders remained firm in saying that any change would be done at their own time. They voiced concerns that instability in the forex markets would not only hurt China but also its neighbouring countries. But Beijing also realised that it had to reform its currency regime. And it found a model in the Singapore system in which the local currency is allowed to trade against a basket of currencies within a pre-determined range.
Japan has welcomed China's revaluation of its yuan currency as a "first step" to internationalise its economy, Chief Cabinet Secretary Hiroyuki Hosoda, the government spokesman, said Thursday. "This is the first step in the internationalisation of the Chinese economy and the first step in the internationalisation of the yuan," Hosoda told reporters. - CNA /ch
Comments - More excitement for the stock market tomorrow. China Yuan confirmed 2% appreciation but M'sian Ringgit nothing firmed up. Anyway, watch out for China and Malaysia Stocks if you have any. Prepare to sell if the market over-reacts too optimistically :D
But as soon as China made the move, Malaysia was forced into action and almost immediately, announced that it was moving to a managed float system for the ringgit. Central Bank governor Zeti Akhtar Aziz said this would have a positive effect on the Malaysian economy. Zeti declined to state the new value of the ringgit, which is widely seen as undervalued. Malaysia pegged its currency at 3.8 to the dollar on September 1, 1998, following the Asian financial crisis.
For months, Beijing has resisted calls to revalue its yuan. It stood steadfast against political pressure from the United States where manufacturers argued that their bottomlines had been hurt because the yuan was kept artificially low. US officials say the yuan's fixed exchange rate against the dollar has left the Chinese currency significantly undervalued, lifting Chinese exports, giving them an unfair advantage, and inflating the US trade deficit. However Chinese leaders remained firm in saying that any change would be done at their own time. They voiced concerns that instability in the forex markets would not only hurt China but also its neighbouring countries. But Beijing also realised that it had to reform its currency regime. And it found a model in the Singapore system in which the local currency is allowed to trade against a basket of currencies within a pre-determined range.
Japan has welcomed China's revaluation of its yuan currency as a "first step" to internationalise its economy, Chief Cabinet Secretary Hiroyuki Hosoda, the government spokesman, said Thursday. "This is the first step in the internationalisation of the Chinese economy and the first step in the internationalisation of the yuan," Hosoda told reporters. - CNA /ch
Comments - More excitement for the stock market tomorrow. China Yuan confirmed 2% appreciation but M'sian Ringgit nothing firmed up. Anyway, watch out for China and Malaysia Stocks if you have any. Prepare to sell if the market over-reacts too optimistically :D
CapitaCommercial Trust - Q205 Results
Extract fm CCT announcement,
Singapore, 21 July 2005 – CapitaCommercial Trust Management Limited (“CCTML”), the manager of CapitaCommercial Trust (“CCT”), is pleased to announce a distributable income of S$27.8 million to unitholders for the period 1 January 2005 to 30 June 2005.
CCT will pay a DPU of 3.24 cents for units trading on the main stock counter, CapitaComm, for the first half year 2005. This is equivalent to an annualised DPU of 6.53 cents for unitholders. Given this DPU, the distribution yield is 4.3% based on the closing price of S$1.51 per unit on 19 July 2005.
Pursuant to the equity fund raising completed on 29 April 2005, approximately 57.2 million new units were issued. These new units, which are traded on a temporary stock counter, CapitaComm A, will receive a DPU of 1.09 cents per unit for the period 29 April 2005 to 30 June 2005. On an annualised basis, the DPU is 6.32 cents, 3% higher than the forecast of 6.14 cents.
The Manager will be distributing 100% of its taxable income to unitholders from the next distribution period starting 1 July 2005. With our strong positive operating cash flow, we are pleased to announce an increase in the distributions to unitholders from 95% to 100%. In addition, following our recent success with HSBC Building, we are evaluating several acquisition opportunities to grow CCT’s portfolio”.
Announcements dated 21-Jul,
Singapore, 21 July 2005 – CapitaCommercial Trust Management Limited (“CCTML”), the manager of CapitaCommercial Trust (“CCT”), is pleased to announce a distributable income of S$27.8 million to unitholders for the period 1 January 2005 to 30 June 2005.
CCT will pay a DPU of 3.24 cents for units trading on the main stock counter, CapitaComm, for the first half year 2005. This is equivalent to an annualised DPU of 6.53 cents for unitholders. Given this DPU, the distribution yield is 4.3% based on the closing price of S$1.51 per unit on 19 July 2005.
Pursuant to the equity fund raising completed on 29 April 2005, approximately 57.2 million new units were issued. These new units, which are traded on a temporary stock counter, CapitaComm A, will receive a DPU of 1.09 cents per unit for the period 29 April 2005 to 30 June 2005. On an annualised basis, the DPU is 6.32 cents, 3% higher than the forecast of 6.14 cents.
The Manager will be distributing 100% of its taxable income to unitholders from the next distribution period starting 1 July 2005. With our strong positive operating cash flow, we are pleased to announce an increase in the distributions to unitholders from 95% to 100%. In addition, following our recent success with HSBC Building, we are evaluating several acquisition opportunities to grow CCT’s portfolio”.
Announcements dated 21-Jul,
- News Release
- Q2/05 Results
- Notice of Book Closure and Distribution Payment Date
- Change in Income Distribution Policy
- Presentation Slides
Comments - Results were released during mid-day mkt close. No impact on share price and volume when mkt re-opens. The results were only slightly better than their own forecast. So, despite a slightly better dividend payout, new 100% profit payout policy from 1-Jul and planned China acquisitions (and possibly in mixed office and retail developments) with better yield in one year's time, the mkt just weren't excited. The current net yield is after all only 4.3% at $1.51. Will likely take a while for mkt to focus back on CCT. There's still the share over-hang fm Temasek's divestment at $1.51, current fever on property stocks after the new changes in CPF usage for properties and the coming MapleTree IPO. Not affecting CMT tho' :D
Wednesday, July 20, 2005
Singapore Banks
CitiGroup Report
Extracts fm Report by CitiGroup dated 20-Jul,
Easing House Financing Rules - Hype Ruling Fundamentals
Summary
Extracts fm Report by CitiGroup dated 20-Jul,
Easing House Financing Rules - Hype Ruling Fundamentals
Summary
- Banks up 3%-6% : Banks rallied on new home financing rules to boost affordability
for first time buyers/upgraders, improving lower-end property market liquidity.
Sentiment may rule fundamental reality for now; but we see as a profit-taking
opportunity - Key changes :
(a) Mortgage loan-to-value ratio (LTV) can go up to 90% (from 80%), but MAS will impose a 100% CAR risk weight (usually 50%).
(b) cash downpayment down to 5% (from 10%); remainder from CPF.
(c) CPF can be used to buy private property of remaining leases of 30-60 years (from >60 years) - Impact and concerns : Main benefit on lower-end private (especially leasehold) property. Doubling capital charge for loans LTVs>80% hits ROEs. Although banks may permit higher LTVs, they may raise loan rates to compensate
- OCBC top pick : OCBC has the highest estimated Singapore mortgage exposure as
a proportion of total mortgages and loans, followed by DBS, then UOB. OCBC’s mortgage strategy also targeted the lower (mass market) property segment including public housing (HDB) properties.
Valuation
- DBS - Target price for DBS is S$15.75
- OCBC - Target price is S$13.35
- UOB - Target price for UOB is S$15.00
GKGoh Report
Extracts fm GKGoh Property Report dated 20-Jul,
All banks are potential beneficiaries. The share prices of DBS (DBS SP, S$15.40, Buy) and OCBC (OCBC SP, S$12.50, Buy) rose 4.8% and 5.0% respectively in a knee-jerk reaction to the announcement. This reflects investors’ belief that DBS could continue to gain market share and OCBC could be a potential beneficiary, being the market leader in HDB loans (65% market share). In contrast, UOB’s (UOB SP, S$14.80, Hold) share price only rose 2.8%, due to its less aggressive stance on loan growth. While the market’s initial reaction is understandable, we believe that the logic is incorrect. Mortgagers are generally price-sensitive and loan market share is largely a function of mortgage pricing. We hold the view that more housing loans do not automatically translate into higher profitability.
Also, impact of housing loans will only show up two years later. Should the new rules trigger a spurt of property purchases, the impact of these home loans will only show up two years later, when the loans are disbursed.
DBS and OCBC remain fundamental Buys, though share prices have over-reacted. We are not changing our forecasts or target prices. With the latest run-up, upside to our target prices has narrowed to 3-9%. Investors could take the opportunity to take profit in the short term.
Target Price
- DBS - S$16.75
- OCBC - S$13.05
- UOB - S$15.30
My Comments - Today's close, DBS $15.90, OCBC $12.50 and UOB $14.80. DBS and UOB has reached CitiGroup's target price whereas all banks still have upside potential based on GKGoh's target.
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Property Stocks
Extract fm Report by GKGoh dated 20-July,
Latest government measures will give a fillip to residential property segment.
The government has just announced changes to its property policies, covering three major areas:
- caps on bank financing for residential properties;
- limits on the use of CPF funds for property purchases; and
- restrictions on foreign ownership of lands and properties (details in the Appendix).
Why now?
Our guess is that the government believes there is sufficient slack in the property market. As at end-Mar 05, there were 19,790 units of completed but unoccupied private residential units, or 8.8% of the total stock. This overhang has been keeping overall property prices in check despite the steady progress of the Singapore economy over the past two years. With General Elections around the corner, the timing for change could not be better.
The key positive for the property sector is the improved cash affordability that comes from two measures:
- a higher Loan-to-Value (LTV) limit for housing loans (up from 80% to 90%); and
- a lower cash payment requirement for private residential and HDB homes from 10% to 5%.
This improved affordability will help boost buyer sentiment, especially in the lower-end market, which has been lagging behind the higher-end market this year. With stabilised HDB prices, current owners may potentially upgrade to private properties. With the reduced cash down payment requirement, more first-time buyers can directly migrate to lower-end private properties.
Developers which are most geared to the lower to mid-end markets are City Developments (CIT SP, S$8.85, Hold), Allgreen (AG SP, S$1.27, Hold) and MCL Land (MCL SP, S$1.50, Hold).
In addition, foreign buying is expected to increase with the relaxation of rules on foreign ownership. These will benefit higher-end developers such as Wheelock Properties (WP SP, S$2.90, NR), Wing Tai (WINGT SP, S$1.18, NR) and Keppel Land (KPLD SP, S$2.98, Buy).
Another Report by DBSVickers dated 20-Jul here. Extract fm this report,
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Monday, July 18, 2005
MapleTree Logistics Trust IPO
Extract fm Press Release at MapleTree Website,
MAPLETREE LOGISTICS TRUST LAUNCHES INITIAL PUBLIC OFFERING
• Offering of 310,877,000 units in MLT (“Units”)
• Price range of S$0.63-S$0.68 per Unit
• Expected distribution yield of at least 6.0%
• Public offer opens Tuesday, 19 July 2005 and closes Friday, 22 July 2005
Singapore, 18 July 2005 – Mapletree Logistics Trust (“MLT”), the first Asia-focused logistics real estate investment trust (“REIT”) in Singapore, has launched its initial public offering of units in MLT (the “Offering”). The prospectus relating to the Offering has been registered by the Monetary Authority of Singapore today.
A total of 310,877,000 Units are being offered for subscription at the offering price range of between S$0.63 and S$0.68 per Unit. The Offering consists of (i) an international placement to investors, including institutional and other investors in Singapore (“Placement Tranche”), and (ii) a public offer of a minimum of 30,000,000 Units to retail investors in Singapore (“Public Offer”), of which 17,697,000 Units are reserved for subscription by the directors, management, employees and business associates of Mapletree Investments Pte Ltd and its subsidiaries.
The Public Offer opens at 8.00 a.m. on Tuesday, 19 July 2005 and closes at 8.00 a.m. on Friday, 22 July 2005. The Units are expected to commence trading on Singapore Exchange Securities Trading Limited at 9.00 a.m. on Thursday, 28 July 2005 (the “Listing Date”).
Prospectus here
Previous Post
MAPLETREE LOGISTICS TRUST LAUNCHES INITIAL PUBLIC OFFERING
• Offering of 310,877,000 units in MLT (“Units”)
• Price range of S$0.63-S$0.68 per Unit
• Expected distribution yield of at least 6.0%
• Public offer opens Tuesday, 19 July 2005 and closes Friday, 22 July 2005
Singapore, 18 July 2005 – Mapletree Logistics Trust (“MLT”), the first Asia-focused logistics real estate investment trust (“REIT”) in Singapore, has launched its initial public offering of units in MLT (the “Offering”). The prospectus relating to the Offering has been registered by the Monetary Authority of Singapore today.
A total of 310,877,000 Units are being offered for subscription at the offering price range of between S$0.63 and S$0.68 per Unit. The Offering consists of (i) an international placement to investors, including institutional and other investors in Singapore (“Placement Tranche”), and (ii) a public offer of a minimum of 30,000,000 Units to retail investors in Singapore (“Public Offer”), of which 17,697,000 Units are reserved for subscription by the directors, management, employees and business associates of Mapletree Investments Pte Ltd and its subsidiaries.
The Public Offer opens at 8.00 a.m. on Tuesday, 19 July 2005 and closes at 8.00 a.m. on Friday, 22 July 2005. The Units are expected to commence trading on Singapore Exchange Securities Trading Limited at 9.00 a.m. on Thursday, 28 July 2005 (the “Listing Date”).
Prospectus here
Previous Post
UOL@2.20
UOL is one of Singapore property companies in Singapore. The properties that is under UOL in Singapore are as follow:
| Property | Tenure | Date Completed |
|---|---|---|
| Faber House | Freehold | 1973 |
| Odeon Towers | 999 Year Lease From 1827 | 1992/2003 |
| UOL Building | Freehold | 1975 |
| United Square | Freehold | 1982/2002 |
| Central Plaza | 99 Year Lease From 1991 | 1994 |
| Novena Square | 99 Year Lease From 1997 | 2000 |
| The Plaza | 99 Year Lease From 1968 | 1974/1979 |
| Plaza Parkroyal | 99 Year Lease From 1968 | 1971/1979 |
| New Park Hotel | Freehold | 1976/1981 |
| Grand Plaza Parkroyal | 99 Year Lease from 1993 | 1996 |
UOL has other properties and hotels, which are located oversea as well. For more information regarding these properties and hotels please refer to UOL website.
The share price of UOL range from S$1.22(Jan 2001) to around S$2.02(Dec 2004). Now it is trading at S$2.20.
| UOL | 2000 | 2001 | 2002 | 2003 | 2004 | 1Q05 |
|---|---|---|---|---|---|---|
| Turnover (M$) | 297.47 | 315.39 | 464.99 | 427.44 | 411.82 | 102.256 |
Margin (%) | 48.05 | 20.99 | 23.11 | 24.50 | 30.68 | NA |
| ROE (%) | 5.55 | 3.65 | 9.36 | 4.54 | 20.71 | NA |
| EPS ($) | 0.122 | 0.115 | 0.263 | 0.1278 | 0.507 | NA |
| Dividend ($) | 0.08 | 0.08 | 0.08 | 0.03 | 0.33 | NA |
Comments:
Based on UOL annual report, UOL's Singapore properties contribute almost 62% of the total turnover even throught it only constitute less than 50% of properties held by UOL and Singapore properties has highest asset value(almost 70%).
Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK
Disclaimer: The above information is for your pleasure reading only. USE THE INFORMATION AT YOUR OWN RISK
Friday, July 15, 2005
MapleTree REIT
Friday July 15, 4:52 PM
SINGAPORE (Dow Jones)--Mapletree Logistics Trust will provide investors with an annualized distribution yield of 6.0%-6.3% this year and 6.2%-6.5% next year, according to a term sheet seen Friday by Dow Jones Newswires.
This yield would make Mapletree a more attractive investment proposition than rival Ascendas Real Estate Investment Trust (A17U.SG), which is trading at a forecast yield of 4.9% for its financial year ending March 2006.
According to the term sheet, Mapletree has already held roadshows in Singapore and Hong Kong, and is currently talking to potential investors in Europe.
Mapletree, a real estate investment trust focused on logistics properties, lodged its preliminary prospectus last month for an initial public offering to raise up to S$211.4 million.
The term sheet confirms the REIT will offer 310.9 million units in an indicative price range of S$0.63 to S$0.68.
Mapletree's IPO is sponsored by Mapletree Investments Pte. Ltd., a wholly owned unit of Singapore's state-owned investment company Temasek Holdings Pte. Ltd.
The term sheet said Mapletree has a five-year right of first refusal over any future sales of logistic assets by Mapletree Investments, including a pipeline of six properties in Singapore, two in Malaysia and three in Hong Kong.
A press conference on the offer is expected Monday.
Comments - The event we have all been waiting for. Get your ammo ready and stay tuned for more detail on Monday :D
Previous Post
SINGAPORE (Dow Jones)--Mapletree Logistics Trust will provide investors with an annualized distribution yield of 6.0%-6.3% this year and 6.2%-6.5% next year, according to a term sheet seen Friday by Dow Jones Newswires.
This yield would make Mapletree a more attractive investment proposition than rival Ascendas Real Estate Investment Trust (A17U.SG), which is trading at a forecast yield of 4.9% for its financial year ending March 2006.
According to the term sheet, Mapletree has already held roadshows in Singapore and Hong Kong, and is currently talking to potential investors in Europe.
Mapletree, a real estate investment trust focused on logistics properties, lodged its preliminary prospectus last month for an initial public offering to raise up to S$211.4 million.
The term sheet confirms the REIT will offer 310.9 million units in an indicative price range of S$0.63 to S$0.68.
Mapletree's IPO is sponsored by Mapletree Investments Pte. Ltd., a wholly owned unit of Singapore's state-owned investment company Temasek Holdings Pte. Ltd.
The term sheet said Mapletree has a five-year right of first refusal over any future sales of logistic assets by Mapletree Investments, including a pipeline of six properties in Singapore, two in Malaysia and three in Hong Kong.
A press conference on the offer is expected Monday.
Comments - The event we have all been waiting for. Get your ammo ready and stay tuned for more detail on Monday :D
Previous Post
Wednesday, July 13, 2005
Thomson Medical @ $0.185
Extract of Report fm Philips dated 13-Jul,
Thomson Medical Centre (TMC) is a niche player that focuses on women and children’s healthcare services. As a testimony of its brand equity, the Group was duly awarded the Singapore Promising Brand Award in June 2004 by the Association of Small and Medium Enterprises and Lianhe Zaobao.
Capturing a bigger share of the shrinking pie. TMC managed to register an increase in deliveries in spite of the decline in the national birth rates and stiffer competition from other local heathcare providers that offer extensive O&G services. To further boost the number of babies delivered at Thomson Medical, the Group plans to open new women’s clinics at various strategic locations in order to generate patient referrals for its flagship hospital.
Building the external wing. Like other healthcare players, TMC is eyeing the regional market, particularly within Southeast Asia, for growth and diversification of revenues. The Singapore market is pretty much saturated and growth is limited by the relatively high cost of medical services coupled with competitive pricing amongst the hospitals here. The management has expressed its intention to venture into fee-based healthcare consultancy services as it offers significant follow-on prospects even after the completion of the project.
Attractive valuation. By comparing with its bigger peers such as Parkway Holdings and Raffles Medical Group, which are trading at an average of 20.8x FY05 P/E, TMC seems to be grossly undervalued. However, we also note that both counters are well-supported by prospective dividend yield of 4-5%. Instead, we believe TMC can be better valued using the DCF methodology. Our 12-month price target of $0.22 implies a 12.8x FY05 and 12.1x FY06 PER, which offers an upside potential of 26%. We initiate coverage with a "BUY".
1H05 Financials Review
Revenue was up marginally by 7% y-o-y to $19m from $17.8m for 1H05. The main growth driver came from its specialized and other revenue segment, which grew by 15.5% to $2.9m. The increase was due to contribution from the opening of two new Thomson Women’s Clinics. In addition, gross profit margin has improved from 39.5% to 41.3% in 1H05 as a result of better direct materials margins, labour efficiency and reduction in direct overhead costs.
The Group registered S$2.8m net profit after tax, an increase of 11.8% over last year. This partly results from lower financing costs as bank borrowings was reduced from S$29.7 million to S$18.7 million as at 28 Feb 2005 due to repayment from IPO proceeds.
Comments - This stock has been trading below IPO price of $0.22 since it got listed on 26-Jan-05. Trading vol is normally very low but shot up today, likely due to this report. At $0.185 now, it's up $0.01 for today. I doubt that the vol will be substainable. Without a dividend policy, investors will not find it as attractive unless it becomes a tgt of M&A (Merger & Acquisition). With EPS= 1.05cts in 1H05 and forecast 1.72cts for 2005 (by Philips), watch out for year end then. If they declare even a 0.5cts div, that gives 2.7% yield at 18.5cts share price and will likely do wonders to the share price :D
I am vested here at average cost of $0.185, bought in a moment of emotion when I was expecting my 2nd kid at TMC and also the publicity of Zoe Tay giving birth there :D
Thomson Medical Centre (TMC) is a niche player that focuses on women and children’s healthcare services. As a testimony of its brand equity, the Group was duly awarded the Singapore Promising Brand Award in June 2004 by the Association of Small and Medium Enterprises and Lianhe Zaobao.
Capturing a bigger share of the shrinking pie. TMC managed to register an increase in deliveries in spite of the decline in the national birth rates and stiffer competition from other local heathcare providers that offer extensive O&G services. To further boost the number of babies delivered at Thomson Medical, the Group plans to open new women’s clinics at various strategic locations in order to generate patient referrals for its flagship hospital.
Building the external wing. Like other healthcare players, TMC is eyeing the regional market, particularly within Southeast Asia, for growth and diversification of revenues. The Singapore market is pretty much saturated and growth is limited by the relatively high cost of medical services coupled with competitive pricing amongst the hospitals here. The management has expressed its intention to venture into fee-based healthcare consultancy services as it offers significant follow-on prospects even after the completion of the project.
Attractive valuation. By comparing with its bigger peers such as Parkway Holdings and Raffles Medical Group, which are trading at an average of 20.8x FY05 P/E, TMC seems to be grossly undervalued. However, we also note that both counters are well-supported by prospective dividend yield of 4-5%. Instead, we believe TMC can be better valued using the DCF methodology. Our 12-month price target of $0.22 implies a 12.8x FY05 and 12.1x FY06 PER, which offers an upside potential of 26%. We initiate coverage with a "BUY".
1H05 Financials Review
Revenue was up marginally by 7% y-o-y to $19m from $17.8m for 1H05. The main growth driver came from its specialized and other revenue segment, which grew by 15.5% to $2.9m. The increase was due to contribution from the opening of two new Thomson Women’s Clinics. In addition, gross profit margin has improved from 39.5% to 41.3% in 1H05 as a result of better direct materials margins, labour efficiency and reduction in direct overhead costs.
The Group registered S$2.8m net profit after tax, an increase of 11.8% over last year. This partly results from lower financing costs as bank borrowings was reduced from S$29.7 million to S$18.7 million as at 28 Feb 2005 due to repayment from IPO proceeds.
Comments - This stock has been trading below IPO price of $0.22 since it got listed on 26-Jan-05. Trading vol is normally very low but shot up today, likely due to this report. At $0.185 now, it's up $0.01 for today. I doubt that the vol will be substainable. Without a dividend policy, investors will not find it as attractive unless it becomes a tgt of M&A (Merger & Acquisition). With EPS= 1.05cts in 1H05 and forecast 1.72cts for 2005 (by Philips), watch out for year end then. If they declare even a 0.5cts div, that gives 2.7% yield at 18.5cts share price and will likely do wonders to the share price :D
I am vested here at average cost of $0.185, bought in a moment of emotion when I was expecting my 2nd kid at TMC and also the publicity of Zoe Tay giving birth there :D
Tuesday, July 12, 2005
Top Picks - DBSVickers 12-Jul
Industrial Sector Top Picks by DBS Vickers dated 12-Jul,
| Top Picks | Price S$ | Target S$ | FY05F PE | FY06F PE | EV/EBITDA | P/BV | Div Yield % |
|---|---|---|---|---|---|---|---|
| CSE Global | 0.79 | 0.95 | 11.7 | 9.1 | 10.5 | 3.0 | 2.5 |
SembCorp Marine | 2.77 | 3.27 | 29.8 | 18.5 | 23.9 | 3.8 | 2.5 |
Inter-Roller Engineering | 1.25 | 1.61 | 9.1 | 8.4 | 8.4 | 2.5 | 6.6 |
Singapore Petroleum | 5.20 | 6.08 | 7.4 | 6.3 | 7.4 | 2.2 | 4.7 |
| Tat Hong Holdings | 0.57 | 0.79 | 9.3 | 7.8 | 5.8 | 1.3 | 4.4 |
CSE Global: High oil prices and shortage of refining capacities have led the increase in demand for new production platforms and oil refineries. This should translate to new jobs for CSE. The company’s orderbook currently stands at an estimated S$200m, and is expected to grow with the buoyant oil and gas environment. As such, we are projecting earnings CAGR of 26% for the next two years. At 8x FY06 PE, valuation remains attractive. BUY, TP S$0.95.
SembCorp Marine: SMM has won contracts worth S$3.1bn so far this year. Order book stands at a record S$5.4bn. We believe order flow momentum should remain strong and expect further contract wins of S$6.5bn over the next 18 months. In addition, SMM’s 30% stake in Cosco Shipyard Group gives it exposure to the booming Chinese ship repair sector. We expect earnings growth of 34% and 62% over FY05-06 underpinned by stronger margins and rising
number of project completions. BUY, TP S$3.27.
Inter-Roller Engineering: 1Q05 results were above expectations, as earnings grew 51% y-o-y on revenue growth of 20%. The Group’s S$158m order book provides firm earnings visibility over the next 2 years, with good prospects of winning more airport contracts to sustain its growth. The stock remains attractive at 8x FY06 PER whilst offering more than 7% yield. BUY, TP S$1.61.
Tat Hong Holdings: A beneficiary of spending on oil and gas, and infrastructure projects in the Asia-Pacific. The Group should see 40% earnings growth that is driven by a) organic growth, b) business extension and c) M&A activity. The Group reported a strong set of FY05 results, with earnings up 48% y-o-y to S$20.6m. We expect earnings growth to continue to exceed 25% p.a. and the stock is trading at only 8.5x FYE Mar 06 earnings versus its peers, which are trading at around 11x current earnings. BUY, TP S$0.79.
SPC: Outlook for the refining sector remains very favourable with product demand growth outpacing new refining capacities in the Asia Pacific region. Refining margins are likely to be stronger in 2H05, which should have a positive impact on profits and stock price performance. New developments on SPC's exploration prospects in Vietnam and Indonesia would also be a potential price catalyst. Given strong SPC’s earnings outlook, we expect the company to maintain a healthy dividend payout. BUY, TP S$6.08.
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
SPH - Q305 Results
SINGAPORE, July 12 (Reuters) - Singapore Press Holdings, Southeast Asia's biggest publisher, saw quarterly profits drop 73 percent but said operating profits would rise this year despite uncertainty over advertising sales and rising newsprint prices.
The company, in which the government holds a small stake, made third-quarter net profit of S$98.6 million ($58.1 million), down from S$369.5 million the same period a year ago when its results were boosted by S$281 million in gains from asset sales.
The figure beat the average of four analyst forecasts of around S$96 million. "The group's newspaper advertising revenue is expected to grow in tandem with the moderating economic growth for the year 2005," Singapore Press Holdings (SPH) Chief Executive Alan Chan said in a statement, adding that the price rise for newsprint should be moderating.
He predicted a rise in 2005 operating profit at SPH, which has a near monopoly on newspapers published in Singapore and owns the 160 year-old Straits Times, from last year's S$338 million.
The government said on Monday that Singapore's economy grew almost twice as fast as expected in the second quarter, beating down talk of recession after a contraction in the first quarter.
Operating revenues at its newspaper and magazine business, its main money spinner, rose 6.3 percent in the third quarter, while sales at the property business rose 8.2 percent.
According to the average of 16 analysts' forecasts compiled by Reuters Estimates, the company is expected to post net profit of around S$458 million for the year ending in August, down 16 percent from S$546 million last year.
Shares in SPH, which has a market value of $4.2 billion, have lost nearly 2 percent in 2005, but its dividend yield -- the annual percentage of return earned by investors -- stands at 3 percent and it boasts a return on equity of 37 percent.
SPH trades at 14.7 times its forecast 2005 earnings, slightly cheaper than Australian newspaper publisher John Fairfax Holdings' 16.2 times, and cheaper than Hong Kong newspaper publisher SCMP Group's 18.8 times, Reuters data shows. John Fairfax publishes the Sydney Morning Herald while SCMP publishes the South China Morning Post.
Three months to May 31, 2005 (in S$Mil unless stated)
SPH Q3 Results here
SPH Press Release here
SPH Fact Sheet 1 & 2
Previous Post
Comments - Results are within the lower end of the analysts' expectations but SPH is positive that the full year results will be better than last years'. Mixed signals here, let's see how the mkt reacts tomorrow. My bet is that it'll not go up further.
Report fm KimEng dated 13-Jul here
Maintain BUY
Report fm DBSVickers dated 13-Jul here
SPH reported 3QFY05 results that were within our expectations. PBT, which excludes distorting asset sales and investment income, rose 26.5%. Revenue growth was fairly lackluster, but earnings growth did better following the de-merger of the TV business losses. We maintain our HOLD recommendation and revise up our RNAV-based target price to S$4.61
Report fm CitiGroup dated 13-Jul here
Our 12-month target price of S$5.26 is based on our estimate of SPH sum-of-the-parts valuation. As a cross check, our target price represents a PE multiple of 22X FY05E and FY06E core media earnings, which we think does not look demanding vis-Ã -vis its peers in the region.
Maintains Buy
Report fm UOBKayHian dated 13-Jul (contact me if u need, ppl I know only)
We estimate SPH's sum-of-the-parts valuation at S$5.11 and our 12-month target price is now S$5.20 (previously: S$5.00). Including an expected annual sustainable net DPS of 20cts (gross DPS: 25cts - basic: 14cts and recurring special: 11cts), we expect SPH to yield a return of 15% within a year. Maintain BUY
The company, in which the government holds a small stake, made third-quarter net profit of S$98.6 million ($58.1 million), down from S$369.5 million the same period a year ago when its results were boosted by S$281 million in gains from asset sales.
The figure beat the average of four analyst forecasts of around S$96 million. "The group's newspaper advertising revenue is expected to grow in tandem with the moderating economic growth for the year 2005," Singapore Press Holdings (SPH) Chief Executive Alan Chan said in a statement, adding that the price rise for newsprint should be moderating.
He predicted a rise in 2005 operating profit at SPH, which has a near monopoly on newspapers published in Singapore and owns the 160 year-old Straits Times, from last year's S$338 million.
The government said on Monday that Singapore's economy grew almost twice as fast as expected in the second quarter, beating down talk of recession after a contraction in the first quarter.
Operating revenues at its newspaper and magazine business, its main money spinner, rose 6.3 percent in the third quarter, while sales at the property business rose 8.2 percent.
According to the average of 16 analysts' forecasts compiled by Reuters Estimates, the company is expected to post net profit of around S$458 million for the year ending in August, down 16 percent from S$546 million last year.
Shares in SPH, which has a market value of $4.2 billion, have lost nearly 2 percent in 2005, but its dividend yield -- the annual percentage of return earned by investors -- stands at 3 percent and it boasts a return on equity of 37 percent.
SPH trades at 14.7 times its forecast 2005 earnings, slightly cheaper than Australian newspaper publisher John Fairfax Holdings' 16.2 times, and cheaper than Hong Kong newspaper publisher SCMP Group's 18.8 times, Reuters data shows. John Fairfax publishes the Sydney Morning Herald while SCMP publishes the South China Morning Post.
Three months to May 31, 2005 (in S$Mil unless stated)
| SPH | Q3 2005 | Q3 2004 | 9m 2005 | 9m 2004 |
|---|---|---|---|---|
| Operating profit/(loss) | 111.09 | 87.78 | 296.89 | 263.33 |
Pre-tax profit/(loss) | 129.07 | 383.79 | 487.92 | 585.20 |
Net profit/(loss) | 98.58 | 369.47 | 417.80 | 542.49 |
Group shr (cents) | 7.00 | 15.00 | 28.00 | 24.00 |
| Turnover | 235.72 | 221.67 | 669.18 | 622.18 |
SPH Q3 Results here
SPH Press Release here
SPH Fact Sheet 1 & 2
Previous Post
Comments - Results are within the lower end of the analysts' expectations but SPH is positive that the full year results will be better than last years'. Mixed signals here, let's see how the mkt reacts tomorrow. My bet is that it'll not go up further.
Report fm KimEng dated 13-Jul here
Maintain BUY
Report fm DBSVickers dated 13-Jul here
SPH reported 3QFY05 results that were within our expectations. PBT, which excludes distorting asset sales and investment income, rose 26.5%. Revenue growth was fairly lackluster, but earnings growth did better following the de-merger of the TV business losses. We maintain our HOLD recommendation and revise up our RNAV-based target price to S$4.61
Report fm CitiGroup dated 13-Jul here
Our 12-month target price of S$5.26 is based on our estimate of SPH sum-of-the-parts valuation. As a cross check, our target price represents a PE multiple of 22X FY05E and FY06E core media earnings, which we think does not look demanding vis-Ã -vis its peers in the region.
Maintains Buy
Report fm UOBKayHian dated 13-Jul (contact me if u need, ppl I know only)
We estimate SPH's sum-of-the-parts valuation at S$5.11 and our 12-month target price is now S$5.20 (previously: S$5.00). Including an expected annual sustainable net DPS of 20cts (gross DPS: 25cts - basic: 14cts and recurring special: 11cts), we expect SPH to yield a return of 15% within a year. Maintain BUY
Monday, July 11, 2005
CLSA Report - 5 Jul 05
Extract fm CLSA Market Outlook dated 5-Jul,
Sectoral outlook :
Banks: We remain bearish and last month’s cut in earnings estimate brought us significantly below consensus estimates. While valuations have appeared cheap for a long time, we still don’t see a re-rating trigger, especially in view of a deteriorating macro environment. UOB (O-PF) is our preferred pick in the sector due to an attractive dividend yield and capital re-engineering angle.
Conglomerates: The offshore & marine industry is benefiting from strong order inflows and margins for Keppel Corp (Buy) and SCI (O-PF) are expected to expand due to better pricing power. Earnings for 2005, 2006 and partially 2007 are locked-in by current order book. ST Eng (O-PF) has defensive attributes due to its steady earnings stream and predictable dividends.
Telcos: SingTel (O-PF) is our top pick that combines growth and defensive attributes. We remain extremely bullish on growth prospects from associates in fast growing Asian markets. Dividend yield is attractive at 4.8% and can get better due to strong cashflows and a management committed to improving the ROIC. M1 (UPF) and Starhub (U-PF) also offer attractive dividend yields.
Transport: Earnings of transport companies like SIA (O-PF) and NOL (U-PF) are cyclical and vulnerable to global economic slowdown. However, they will benefit from any decline in oil prices. ComfortDelgro (U-PF) is richly valued and its growth prospects are constrained in the domestic market.
Property: Momentum in the Singapore property market remains positive. Strong offtake in the residential physical property market is a likely precursor to price increases. Expectations of significant hike in interest rates from current levels have moderated, which favours mortgage borrowers. While slowing macro environment may be a sentiment dampner for potential buyers, our analysis shows poor correlation between GDP and property indices. City Dev (O-PF) and Keppel Land (Buy) are our preferred picks in the sector.
Technology: The rally in tech stocks is low quality trade, as it is not supported by fundamental improvements. Venture (Buy) is the only exception with earnings expected to strongly rebound in the current year and downside supported by high dividend yield. As risk aversion rises, investors should switch to companies with earnings resilience and high dividend yield.
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Sectoral outlook :
Banks: We remain bearish and last month’s cut in earnings estimate brought us significantly below consensus estimates. While valuations have appeared cheap for a long time, we still don’t see a re-rating trigger, especially in view of a deteriorating macro environment. UOB (O-PF) is our preferred pick in the sector due to an attractive dividend yield and capital re-engineering angle.
Conglomerates: The offshore & marine industry is benefiting from strong order inflows and margins for Keppel Corp (Buy) and SCI (O-PF) are expected to expand due to better pricing power. Earnings for 2005, 2006 and partially 2007 are locked-in by current order book. ST Eng (O-PF) has defensive attributes due to its steady earnings stream and predictable dividends.
Telcos: SingTel (O-PF) is our top pick that combines growth and defensive attributes. We remain extremely bullish on growth prospects from associates in fast growing Asian markets. Dividend yield is attractive at 4.8% and can get better due to strong cashflows and a management committed to improving the ROIC. M1 (UPF) and Starhub (U-PF) also offer attractive dividend yields.
Transport: Earnings of transport companies like SIA (O-PF) and NOL (U-PF) are cyclical and vulnerable to global economic slowdown. However, they will benefit from any decline in oil prices. ComfortDelgro (U-PF) is richly valued and its growth prospects are constrained in the domestic market.
Property: Momentum in the Singapore property market remains positive. Strong offtake in the residential physical property market is a likely precursor to price increases. Expectations of significant hike in interest rates from current levels have moderated, which favours mortgage borrowers. While slowing macro environment may be a sentiment dampner for potential buyers, our analysis shows poor correlation between GDP and property indices. City Dev (O-PF) and Keppel Land (Buy) are our preferred picks in the sector.
Technology: The rally in tech stocks is low quality trade, as it is not supported by fundamental improvements. Venture (Buy) is the only exception with earnings expected to strongly rebound in the current year and downside supported by high dividend yield. As risk aversion rises, investors should switch to companies with earnings resilience and high dividend yield.
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Singapore Q2 GDP
SINGAPORE (XFN-ASIA) - 11 July 2005, 08:23
Second quarter GDP grew 3.9 pct year-on-year, faster than the 2.8 pct rise in the first quarter, as output of the manufacturing and services sectors rose, according to preliminary estimates from the Ministry of Trade and Industry.
The growth figure topped the 1.8-3.5 pct estimate of economists polled by XFN-Asia. Seasonally adjusted, GDP expanded by a sharp 12.3 pct in the second quarter compared to the first three months.
Manufacturing output grew 3.5 pct year-on-year in the second quarter, after rising 3.4 pct in the previous quarter. "Strong performance in the transport engineering cluster continued to support growth, as the contraction in biomedical manufacturing eased," the MTI said. However, electronics and chemicals experienced slower growth, it said. Output of services grew 4.2 pct from a year earlier compared to the first quarter's 3.6 pct expansion while construction contracted by a smaller 1.4 pct after declining 5.2 pct in the first quarter.
The advance GDP estimates were based largely on data available for April and May. A final estimate will be released in August.
Comments - Good for the stock mkt (STI +11 now). Looks like SPH price will hold steady now, at least till results are released tomorrow. SPH and the Banks are very much dependent on the economic growth, so, good GDP growth => Good profits!
Second quarter GDP grew 3.9 pct year-on-year, faster than the 2.8 pct rise in the first quarter, as output of the manufacturing and services sectors rose, according to preliminary estimates from the Ministry of Trade and Industry.
The growth figure topped the 1.8-3.5 pct estimate of economists polled by XFN-Asia. Seasonally adjusted, GDP expanded by a sharp 12.3 pct in the second quarter compared to the first three months.
Manufacturing output grew 3.5 pct year-on-year in the second quarter, after rising 3.4 pct in the previous quarter. "Strong performance in the transport engineering cluster continued to support growth, as the contraction in biomedical manufacturing eased," the MTI said. However, electronics and chemicals experienced slower growth, it said. Output of services grew 4.2 pct from a year earlier compared to the first quarter's 3.6 pct expansion while construction contracted by a smaller 1.4 pct after declining 5.2 pct in the first quarter.
The advance GDP estimates were based largely on data available for April and May. A final estimate will be released in August.
Comments - Good for the stock mkt (STI +11 now). Looks like SPH price will hold steady now, at least till results are released tomorrow. SPH and the Banks are very much dependent on the economic growth, so, good GDP growth => Good profits!
Saturday, July 09, 2005
Mapletree Logistics Trust - Pre-IPO Prospectus
Extract fm Kim Eng dated 7-Jul,
Issue statistics
Issue Price : $0.63-0.68
Share capital: 546.3m shares, of which
- 210.4m (38.5%) held by sponsor
- 25m (4.6%) held by investing vendors
- 310.877m (56.9%) placement and public offer (minimum 30m) tranche
*There is an overallotment option for 46.5m units. If exercised, the sponsor, investing vendor and public and institutional tranche would be 30%, 4.6% 65.4% respectively
Net Asset Value/unit: $0.52-0.56
About Mapletree Logistics Trust
Mapletree Logistics Trust (MLT) will comprise 15 properties totalling 8.53msf of logistics warehousing space islandwide valued at $422m. Portfolio occupancy average 95.2% and average lease term to expiry is 9.1 years. 12 of the 15 properties are single tenanted. As at May 2005, 11 of the 32 tenants have long-term leases.
Growth strategies
The manager has identified 3 strategies to drive long-term growth and provide stable returns:
- Acquisition growth strategy. This involves sourcing and acquiring assets in Singapore
and elsewhere in the Asia Pacific region that will enhance the diversification of the portfolio by geography, asset and tenant profile and optimise risk-adjusted returns to unitholders. - Active asset management strategy. Derive organic growth through actively managing
properties by providing value-added property related services in order to maintain high
tenant retention levels, reduce vacancy levels, minimise expenses and enhancing assets.
At least 2 properties – TIC Tech Centre and 60 Alps Avenue have not fully utilised their
plot ratios and have potential for further growth through additional NLA. - Capital and risk management strategy. Optimise MLT’s capital structure and cost of
capital within borrowing limits and use a combination of debt and equity to fund future
acquisitions and asset enhancements.
Distribution
Mapletree Logistic Trust will distribute 100% of its taxable income from listing date to Dec 2006 and at least 90% of taxable income thereafter. Distributions will be made quarterly, with the first distribution for the period of listing date to Dec 2005.
Comments - Only 30Mil shares for public, will be difficult to get. Must call my broker to see if any chance of getting placement shares when IPO is launched :) Still no yield data and prospectus not found in OPERA
Friday, July 08, 2005
SPH @ $4.48
SINGAPORE (XFN-ASIA) - Singapore Press Holdings Ltd (SPH) was lower on profit-taking, following three consecutive sessions of gains triggered by hopes it will soon divest the Paragon shopping mall, dealers said. In early trading, SPH was down 0.04 sgd or 0.89 pct at 4.48 on volume of 1.02 mln shares.
Yesterday, SPH downplayed expectations of the sale of Paragon, saying it is not in discussions with any party about the sale of the shopping mall. "The recent desktop valuation of Paragon was carried out as part of a loan facility requirement," SPH said in a statement. The Paragon shopping mall was revalued at 1.38 bln sgd late last month, higher than last year's valuation of 1.2 bln sgd. However, earlier this week, SPH said in an e-mailed statement in response to a query from XFN-Asia: "We have received many enquiries on Paragon from interested parties and are keeping our options open."
SPH will report its third quarter to May results next Tuesday. Analysts polled by XFN-Asia said they expect SPH to post a net profit of 98-105 mln sgd, compared to 97.60 mln sgd in the previous quarter. However, SPH's third quarter net profit will be significantly lower than in the corresponding period in 2004, when SPH posted net earnings of 369.5 mln sgd, boosted by exceptional gains, they said.
Report fm Lehman Brothers dated 6-Jul here
SPH @ $4.42 looks fully valued given decelerating earnings growth momentum and lacklustre growth prospects over the medium term.
Report fm CitiGroup dated 6-Jul here
Our 12-month target price of S$5.26 is based on our estimate of SPH sum-of-the-parts valuation. There could also be a S$0.30 increase in our sum of parts valuation to S$5.56 as we have valued Paragon at a lower price in our valuation
Report fm Kim Eng dated 6-Jul here
SPH trades at FY05/06 PE of 14x and 17x, with dividend yields forecast at 8.8% this year, and 7% next year. BUY maintained for attractive yield.
Report fm CSFB dated 1-Jul here
Although it has underperformed 14% in the past six months, SPH continues to trade at an above-average P/E premium to the Singapore market – the stock trades at a 32% P/E premium to the market versus a five-year average premium of 27%. In view of the weak growth prospects, we believe that the huge premium is unjustified. Our target price of S$4.00 represents potential downside of 7% from current levels. We maintain our UNDERPERFORM rating.
Report fm UBS dated 29-Jun here
Having retreated some 15% from S$5.00, we think SPH’s valuation is beginning to look attractive on most valuation parameters, such as sum of parts, ROCE/WACC spread and global peer comparison. Our valuation is based on sum of parts with S$1 for its non-core business and DCF of core business. Price target $4.90
Comments - The recent optimism on SPH was triggered by the sale of several properties by CDL and Wing Tai to Suntec REIT plus the very optimistic report by CitiGroup. As it ran up fm $4.30 to a high of $4.56 over 3 days ($0.26 or ~6%), I decided to do some profit-taking and sold at $4.52 and $4.54, esp. since SPH also released a statement yesterday to deny that they are selling Paragon any time soon. Further, the 3 reports above also do not expect the coming Q3 results announcement on 12-Jul to be 'exciting'.
I have recalculated my remaining SPH average prcice to be $4.41 (finally take into acct the capital reduction exercise last yr) and now forms aro' 15% of my portfolio of local shares. I plan to buy on any price weakness, first tgt aro' $4.38.
Previous Post on SPH
Disclaimer : Use the above at your own risk! We'll not be responsible for any losses incurred but you can give us credit if you make money :D
Yesterday, SPH downplayed expectations of the sale of Paragon, saying it is not in discussions with any party about the sale of the shopping mall. "The recent desktop valuation of Paragon was carried out as part of a loan facility requirement," SPH said in a statement. The Paragon shopping mall was revalued at 1.38 bln sgd late last month, higher than last year's valuation of 1.2 bln sgd. However, earlier this week, SPH said in an e-mailed statement in response to a query from XFN-Asia: "We have received many enquiries on Paragon from interested parties and are keeping our options open."
SPH will report its third quarter to May results next Tuesday. Analysts polled by XFN-Asia said they expect SPH to post a net profit of 98-105 mln sgd, compared to 97.60 mln sgd in the previous quarter. However, SPH's third quarter net profit will be significantly lower than in the corresponding period in 2004, when SPH posted net earnings of 369.5 mln sgd, boosted by exceptional gains, they said.
Report fm Lehman Brothers dated 6-Jul here
SPH @ $4.42 looks fully valued given decelerating earnings growth momentum and lacklustre growth prospects over the medium term.
Report fm CitiGroup dated 6-Jul here
Our 12-month target price of S$5.26 is based on our estimate of SPH sum-of-the-parts valuation. There could also be a S$0.30 increase in our sum of parts valuation to S$5.56 as we have valued Paragon at a lower price in our valuation
Report fm Kim Eng dated 6-Jul here
SPH trades at FY05/06 PE of 14x and 17x, with dividend yields forecast at 8.8% this year, and 7% next year. BUY maintained for attractive yield.
Report fm CSFB dated 1-Jul here
Although it has underperformed 14% in the past six months, SPH continues to trade at an above-average P/E premium to the Singapore market – the stock trades at a 32% P/E premium to the market versus a five-year average premium of 27%. In view of the weak growth prospects, we believe that the huge premium is unjustified. Our target price of S$4.00 represents potential downside of 7% from current levels. We maintain our UNDERPERFORM rating.
Report fm UBS dated 29-Jun here
Having retreated some 15% from S$5.00, we think SPH’s valuation is beginning to look attractive on most valuation parameters, such as sum of parts, ROCE/WACC spread and global peer comparison. Our valuation is based on sum of parts with S$1 for its non-core business and DCF of core business. Price target $4.90
Comments - The recent optimism on SPH was triggered by the sale of several properties by CDL and Wing Tai to Suntec REIT plus the very optimistic report by CitiGroup. As it ran up fm $4.30 to a high of $4.56 over 3 days ($0.26 or ~6%), I decided to do some profit-taking and sold at $4.52 and $4.54, esp. since SPH also released a statement yesterday to deny that they are selling Paragon any time soon. Further, the 3 reports above also do not expect the coming Q3 results announcement on 12-Jul to be 'exciting'.
I have recalculated my remaining SPH average prcice to be $4.41 (finally take into acct the capital reduction exercise last yr) and now forms aro' 15% of my portfolio of local shares. I plan to buy on any price weakness, first tgt aro' $4.38.
Previous Post on SPH
Disclaimer : Use the above at your own risk! We'll not be responsible for any losses incurred but you can give us credit if you make money :D
Thursday, July 07, 2005
Dividend Yielding Stocks
Table by UBS (click on table to get full view) below. Full report here
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Top Stock Picks
Top Stock Picks by UBS dated 29-Jun below. Full report here
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Disclaimer : Above Materials are Meant to be used for Reference ONLY. It does not represent a recommendation from any of us
Increase in Trading Charges
Read from the The Straits Times, UOB Kay Hian is going to increase trading charges. It's a sad day for small time investor like me, which will increase our cost in investment. Below are current online trading charges charge by various firms.
| Company | Min Charge | Commission | New Min Charge | Effective Date |
|---|---|---|---|---|
| UOB | $20.00 | 0.275% | $25.00 | 13 July 05 |
POEMS | $22.00 | 0.280% | $25.00 | 14 July 05 |
OCBC | $20.00 | 0.275% | TBC | TBC |
DBS | $23.00 | 0.280% | TBC | TBC |
| Kim Eng | Not Sure* | 0.2750% | $25.00 | 13 July 05 |
| GK Goh | $20.00 | 0.2750% | $25.00 | 13 July 05 |
*I tried to update Kim Eng's commission charge, but I could not found it on the website as they had already updated the new Min Charge that is going to take effect on 13 July 05.
It will not affect the big time traders at the present moment as I think they would not like to rock the boat and cause the big time traders to switch to other firm, which offer lower commission. Looks like the small time investers are going to be affected by this new changes. Let's see how the other firm will react to UOB Kay Hian rise.
Wednesday, July 06, 2005
Singapore Reinsurance @ $0.275
BACKGROUND HISTORY
Singapore Re is the Republic's only active indigenous reinsurer, serving the domestic insurance industry as well as those in the Asian region and beyond.
Established in 1973 as a co-operative effort by all the insurance companies then operating in the local market, one of its primary roles was to contribute towards the development of Singapore as a premier insurance centre in the region. This remains its key focus today, as it leverages on the close symbiotic ties with its business partners to offer value-added services and products directly as well as through its stable of subsidiaries, which serve the financial services sector in the following areas:
- Underwriting management and secretariat services;
- Management of insurance industry statistical databases;
- Computer software development and consultancy services;
- Publishing and conferencing services under the banner of flagship publication, Asia Insurance Review;
- Development and marketing of statistically-based business support tools;
- Advertising and consultancy services; and
- Property management and consultancy services.
In 2000, it launched the InsuranceSupermart portal.
Company Website
Share Price:
Range From $0.20 to $0.28 (Since 2001 - July 2005)
| 2001 | 2002 | 2003 | 2004 | 1Q05 | |
|---|---|---|---|---|---|
| Turnover (M$) | 73.006 | 83.525 | 94.672 | 103.121 | 18.448 |
Margin (%) | 13.12 | 13.00 | 13.77 | 16.68 | 26.04 |
| ROE (%) | 5.99 | 6.30 | 7.43 | 10.43 | |
| EPS ($) | 0.018 | 0.019 | 0.021 | 0.031 | 0.008 |
| Dividend ($) | 0.02 | 0.02 | 0.02 | 0.02 |
Comments:
Look like it is a stock to consider if you are looking for high dividend stock. Based on a rough calculation, the yield for the stock is around 7% ~ 10% depend on the price that you purchase. The negative side is that the price movement of the stock is limited. Consider if you invest $1000 dollars and based on 7% yield, you will be getting $70.00 which is enough to cover the charges for purchasing of this stock. Most of it major shareholders are the local banks and local insurance company. It should be a stock worth considering if you are looking for high dividend stock and minimum risk.
Disclaimer: The above comment is my personal view, please use it as your own risk. If you have any view or comment, please do not hesitate to post your comment.
Disclaimer: The above comment is my personal view, please use it as your own risk. If you have any view or comment, please do not hesitate to post your comment.
Suntec REIT @ $1.23
SINGAPORE (XFN-ASIA) dated 30 Jun 2005 - Suntec REIT said it is buying a total of 12 properties from City Developments and Wing Tai for about 1.03 bln sgd, making it the largest real estate investment trust by asset size and net lettable area in the city state.
Suntec REIT will buy 11 properties from City Developments, namely Fuji Xerox Towers, Plaza By The Park, City House, Central Mall (Office Tower), The Arcade Units, Katong Shopping Centre Units, North Bridge Commercial Complex Units, Fortune Centre Units, Golden Mile Complex Units, People's Park Centre Carpark Unit and Queensway Shopping Centre Carpark Unit. These properties were priced at a total of 788 mln sgd.
Suntec REIT said it will also buy Park Mall, which is majority owned by Wing Tai, for 230 mln sgd.
The total acquisition cost of about 1.03 bln sgd comprises the aggregate purchase price of the properties of 1.02 bln sgd, an acquisition fee of 10.2 mln and other fees and expenses of about 3 mln.
"The acquisition is aimed at diversifying Suntec REIT's earnings, which is currently solely derived from the Suntec City office and commercial complex," Suntec REIT said in a statement. "Upon completion of the acquisitions, Suntec REIT will have a total of 13 properties," it added. Suntec REIT said the 13 properties will have a total net lettable area of 3.5 mln square feet and an asset size of 3.3 bln sgd. "This will make Suntec REIT the largest Singapore real estate investment trust by asset size as well as net lettable area," it said.
Suntec REIT said the acquisitions will improve its distribution per unit (DPU) for its unitholders. It said that the acquisitions are expected to improve the income diversification of Suntec REIT, "reducing its reliance on any one single property," adding that the number of its tenants is expected to increase by 78.9 pct to 730 from 408 following the acquisitions.
Suntec REIT also said the acquisitions will be partly funded from the expected net proceeds of a proposed offer and the issue of new units to investors, as well as additional borrowings.
In a separate statement, City Developments said that the sale of its 11 properties will give it "an immediate cash receipt of 710 mln sgd." "Based on the net book value of these properties as of December 31 2004, this deal will provide CDL with a pretax profit of about 342.31 mln sgd, before taking into account the transaction costs," City Developments said.
Report fm OCBC dated 4-Jul here
They recommend Upgrade BUY, Fair Value $1.38 (fm $1.27)
Comments : Suntec REIT dropped to an intra day low of $1.20 after Mr Li sold his stake to below 5% a couple of weeks back. These last few weeks, we also saw Temasek selling almost their entire stake in CCT REIT and Fortune REIT launching new shares. Temasek also announced their intention to launch the IPO for MapleTree REIT.
Mkt reaction so far has not been very positive and the price has been stable at aro' $1.22-$1.24 as little detail has been provided on these purchases. Suntec will likely issue new shares and this will likely cause pressure on the share price. I am still positive with Suntec REIT and just bought at $1.23 on 4-Jul to add to my earlier purchases of $1 (IPO) and $1.25 (17-Jun). Note that I intend to hold these for the longer term but may sell some if the opportunity arises (ie. price rises too fast) or due to other adverse conditions (eg. interest rate goes up).
Disclaimer : Use the above at your own risk! We'll not be responsible for any losses incurred but you can give us credit if you make money :D
Suntec REIT will buy 11 properties from City Developments, namely Fuji Xerox Towers, Plaza By The Park, City House, Central Mall (Office Tower), The Arcade Units, Katong Shopping Centre Units, North Bridge Commercial Complex Units, Fortune Centre Units, Golden Mile Complex Units, People's Park Centre Carpark Unit and Queensway Shopping Centre Carpark Unit. These properties were priced at a total of 788 mln sgd.
Suntec REIT said it will also buy Park Mall, which is majority owned by Wing Tai, for 230 mln sgd.
The total acquisition cost of about 1.03 bln sgd comprises the aggregate purchase price of the properties of 1.02 bln sgd, an acquisition fee of 10.2 mln and other fees and expenses of about 3 mln.
"The acquisition is aimed at diversifying Suntec REIT's earnings, which is currently solely derived from the Suntec City office and commercial complex," Suntec REIT said in a statement. "Upon completion of the acquisitions, Suntec REIT will have a total of 13 properties," it added. Suntec REIT said the 13 properties will have a total net lettable area of 3.5 mln square feet and an asset size of 3.3 bln sgd. "This will make Suntec REIT the largest Singapore real estate investment trust by asset size as well as net lettable area," it said.
Suntec REIT said the acquisitions will improve its distribution per unit (DPU) for its unitholders. It said that the acquisitions are expected to improve the income diversification of Suntec REIT, "reducing its reliance on any one single property," adding that the number of its tenants is expected to increase by 78.9 pct to 730 from 408 following the acquisitions.
Suntec REIT also said the acquisitions will be partly funded from the expected net proceeds of a proposed offer and the issue of new units to investors, as well as additional borrowings.
In a separate statement, City Developments said that the sale of its 11 properties will give it "an immediate cash receipt of 710 mln sgd." "Based on the net book value of these properties as of December 31 2004, this deal will provide CDL with a pretax profit of about 342.31 mln sgd, before taking into account the transaction costs," City Developments said.
Report fm OCBC dated 4-Jul here
They recommend Upgrade BUY, Fair Value $1.38 (fm $1.27)
Comments : Suntec REIT dropped to an intra day low of $1.20 after Mr Li sold his stake to below 5% a couple of weeks back. These last few weeks, we also saw Temasek selling almost their entire stake in CCT REIT and Fortune REIT launching new shares. Temasek also announced their intention to launch the IPO for MapleTree REIT.
Mkt reaction so far has not been very positive and the price has been stable at aro' $1.22-$1.24 as little detail has been provided on these purchases. Suntec will likely issue new shares and this will likely cause pressure on the share price. I am still positive with Suntec REIT and just bought at $1.23 on 4-Jul to add to my earlier purchases of $1 (IPO) and $1.25 (17-Jun). Note that I intend to hold these for the longer term but may sell some if the opportunity arises (ie. price rises too fast) or due to other adverse conditions (eg. interest rate goes up).
Disclaimer : Use the above at your own risk! We'll not be responsible for any losses incurred but you can give us credit if you make money :D
Tuesday, July 05, 2005
SingPost
Singpost shareholders would be receiving their dividend of $0.027 on 15 July 2005. The last dividend of $0.023 was distributed on 30 November 2005. This brings the total dividend to $0.05 for this financial year. In the coming financial year, Singpost will distribute quarterly dividends.
Singpost has been trying to increase their revenue and profit by diversifying its services as its main revenue is in postage. They are trying to use their widespread post office in Singapore to help others reach their intended customers. In a recent news by Dow Jones, Singpost has tie-up with Prudential to offer Prudential's financial planning products and services. This will be the fourth financial service provided by SingPost. The first three are CASHome, ezyCash and SpeedCash.
Comment: Accessability to a huge crowd is the main point of Singpost and they are using this strength to improve its revenue to their advantage. It will be good for Singpost as long as it does not increase the operating cost by hiring financial advisors in providing this new service. Currently, I don't think the staff at Post Office will be capable of giving financial advice. The financial advice will be provided by Prudential financial advisers (Information from SingPost Website). Let hope this new service will increase the revenue and improve the dividend payout by Singpost.
Dividend Policy of Singpost:
Singpost has been trying to increase their revenue and profit by diversifying its services as its main revenue is in postage. They are trying to use their widespread post office in Singapore to help others reach their intended customers. In a recent news by Dow Jones, Singpost has tie-up with Prudential to offer Prudential's financial planning products and services. This will be the fourth financial service provided by SingPost. The first three are CASHome, ezyCash and SpeedCash.
Comment: Accessability to a huge crowd is the main point of Singpost and they are using this strength to improve its revenue to their advantage. It will be good for Singpost as long as it does not increase the operating cost by hiring financial advisors in providing this new service. Currently, I don't think the staff at Post Office will be capable of giving financial advice. The financial advice will be provided by Prudential financial advisers (Information from SingPost Website). Let hope this new service will increase the revenue and improve the dividend payout by Singpost.
Dividend Policy of Singpost:
| a) | Minimum payout raised The minimum annual net dividend payout has been raised by 19% from 4.2 cents per share to 5.0 cents per share. With this enhancement, SingPost will endeavour, barring unforseen circumstances, to make a total annual net dividend payout of 80 to 90% of net profit or a minimum net dividend of 5.0 cents per share, whichever is higher. Dividends paid by SingPost will be on tax-empt 1-tier basis. |
| b) | Quarterly dividend SingPost will make dividend payments on a quarterly basis, amounting to 1.25 cents per share each quarter based on the minimum base of 5.0 cents per share. Should the target dividend of 80 to 90% of net profit be higher than the minimum level of 5.0 cents per share, the difference will be paid out in the final quarter together with the regular dividend of 1.25 cents per share for the quarter. |
The dividend level is subject to regular reviews and will be based on the Group's financial performance and condition, investment requirements and other conditions deemed relevant by the Board.
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