30 April 2013~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day : Wisdom is not wisdom when it is derived from books alone.
- HORACE
Singapore: The Day AheadSINGAPORE DAYBOOK:Reit IPOs set to take the market by storm. All signs suggest that it's going to be a record year with several promising offerings [SINGAPORE] The stars have aligned this year for a record-breaking initial public offering market for real estate investment trusts (Reits) and business trusts. But quality will be key.
"There will be deals that are close to a billion, and potentially more as well. This is a healthy trend for the market," Credit Suisse Asia Pacific head of investment banking Helman Sitohang told The Business Times.
The keen interest in the IPOs of Reits follows a successful flotation by Mapletree Greater China Commercial Trust (MGCCT) on March 7, which raised over S$1.6 billion amid strong demand from institutional investors. The stock, which was almost 30 times subscribed, has risen 20 per cent above its IPO price of 93 cents.
Since then, other firms such as Overseas Union Enterprise (OUE) and Singapore Press Holdings (SPH) have also indicated plans for the listing of Reits.
MARKET SCOOP
OCBC'sQ1 net profit down 16% at S$696m
SMRT'sQ4 slips into red with S$11.9M loss, slashes dividend
Fragrance Group Q1 profit falls 20.2%
Wheelock Properties post S$105.3m Q1 profit
A-HTrust posts DPU of 1.68 cents in Q4
Singapore GIC to sell Glencore bonds, to buy shares
UBS SECURITIES says... CAPITALAND LTD | BUY | TP: S$4.46
Apart from reduced segmental visibility as a result of the streamlined business units, it was difficult to fault CapitaLand's Q113 results with PATMI of S$188.2m, +41.2% YoY
Singapore and China residential were key contributors while divestment gains from a Beijing site provided a S$47.5m boost
We expect China earnings to contribute more meaningfully in H213 as the group hands over 2,800 units to buyers (versus 230 units in Q113)
Singapore home sales displayed strong take-up with 544 units sold in Q113, mainly from d'Leedon
Achieved sales of S$1.3bn for the quarter is encouraging and similar to that recorded for the entire 2012
China sales was also strong with 955 units sold and the challenge would be maintaining the momentum through H213 given policy headwinds
We think major strategic initiatives, capital management and good acquisitions will help narrow the RNAV discount
The Australand review has been ongoing for over 2 months and a favourable outcome soon would be a rerating catalyst, in our view
Our price target is based on 0.9x RNAV
UOB KAY HIAN says...
STARHILL GLOBAL REIT | BUY | TP: S$1.03
Starhill Global REIT (SGREIT) reported a 1Q13 distributable income of S$26.6m (+28.0% yoy, +20.9%qoq) and a DPU of 1.18cents (10.3% yoy, +4.4% qoq) Revenues up on Wisma AEI and strong Singapore portfolio performance Positive resolution of Toshin rent review resulted in a 10% upward revision in rentals for the term from Jun-2011 to Jun-2013, while rental arrears of S$3.8m (S0.19c per unit) are included in 1Q13 distributions No debt due for refinancing until 2015 after SGREIT successfully secured JPY 7b (S$100m) and S$600m unsecured 3-year and 5-year loan facilities to refinance S$513m debt maturing in September and December 2013 Portfolio occupancy up 30bps to 99.7%, supported by full occupancies in Singapore retail and offices We anticipate further acquisitions, offset against divestments in Japan as SGREIT embarks on its next stage of growth Debt headroom of S$450m for acquisitions from current gearing of 30.5% assuming a target gearing of 40% Target price of S$1.03 based on DDM (required rate of return: 6.5%, terminal growth: 2.0%) DBS VICKERS Securities says...
YANGZIJIANG SHIPBUILDING HOLDINGS | HOLD | TP: S$1.02
Yangzijiang's 1Q13 net profit fell 30% y-o-y to Rmb717m on the back of slower shipbuilding activities and a higher tax rate
Results came in below our above consensus estimate of Rmb750-800m due to lower revenue recognition
Yangzijiang terminated a 2500-TEU container contract (secured pre-GFC), whose construction was almost completed, bringing the total cancellation to 13 vessels
On a positive note, the gross margin inched up 1.8ppt q-o-q to 25.9%, thanks to softer raw material prices, particularly steel
Recent yen depreciation of 20% wiped out the cost advantage of Chinese yards over Japanese peers
While Japanese yards are relatively full till 2015, we reckon this will intensify the competition in the dry bulk segment going into 2014
We have brought FY14 order win assumptions down from US$3bn to US$2bn
We have also tweaked our orderbook recognition schedule and margin assumptions, resulting in an earnings cut of 8.2%/0.2% for FY13/14
Our TP is reduced to S$1.02, based on 1.1x revised NBV, which is fair against the lower ROE of 9 % by FY14
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