29 May 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 :Don't limit a child to your own learning, for he was born in another time.
- RABINDRANATH TAGORE
Singapore: The Day AheadSINGAPORE DAYBOOK:All eyes on how SPH will deploy proposed Reit proceeds SHARES in Singapore Press Holdings (SPH) rose 8 cents yesterday as the media and property group moved a step closer to listing its mall assets, but questions remained about how the company will deploy an expected $757 million in cash following the deal.
"Ultimately it will depend on what they do with the proceeds," DMG & Partners analyst Joshua Low said.
The stock of SPH gained 1.8 per cent to close at $4.47 after the company announced that it planned to pay out 18 cents per share in a special dividend after spinning off its malls into a listed real estate investment trust (Reit).
The Reit is targeted to be launched through an expected $540 million initial public offering in July. SPH, which could retain a 70 per cent stake in the Reit and collect fees as the manager, expects to receive about $1 billion in net cash proceeds, of which about $291 million will be paid out through the special dividend. That would leave $757 million for working capital and reinvestment in "growth strategies. (Source: The Business Times)
MARKET SCOOP China Animal makes cash exit offer of 30 cts/shr as part of delisting plan MAS opens representative office in Beijing
Tat Hong Q4 profit up 66% to S$18.6m
Bukit Sembawang Q4 net profit up 19.4%
IPOS inks MOU with China's IPO office
Trading of Pertama's shares to remain suspended
Stats ChipPAC expands facilities and staff strength
(Source: The Business Times)
UOB KAY HIAN Securities says...
SINGAPORE PRESS HOLDINGS | HOLD | TP: S$4.50
After two months of deliberation, SPH has decided to go ahead with the listing of SPH REIT, subject to shareholder approval at an EGM on 18 June
SPH REIT will focus on retail mall assets in Singapore and across Asia-Pacific with an ability to finance itself independently
Pursuant to the listing, SPH will inject Paragon and Clementi Mall into SPH REIT at S$3.07b
This is at a 3.5% discount to the malls' aggregate market value of S$3.18b
Post listing, SPH is expected to hold approximately 70% of SPH REIT.
SPH REIT will pay for Paragon and Clementi Mall in units and cash
With the cash proceeds from the injection of Paragon and Clementi Mall into SPH REIT, SPH is to pay a cash special DPS of 18 cents
SPH's net group gearing will fall from 40.6% to 9.3% before the payment of the special dividend
Its NAV will increase by >63% from S$1.39 to S$2.27/share
The special dividend is to compensate for a reduction in SPH's earnings and dividend yield post listing of SPH REIT
We estimate SPH's earnings would be reduced by 2% with 2014-15 dividend yield reduced from 4.6% to 4.5%
In return, SPH's shareholders are given a special dividend sweetener
No material impact on our sum-of-the-parts (SOTP) valuation of S$5.28/share as it has already incorporated SPH's property assets at market values
Our target price remains unchanged at S$4.50, which is set at 15% discount to our SOTP valuation
DBS VICKERS Securities says ...
SEMBCORP MARINE | HOLD | TP:S$4.70
Sembcorp Marine (SMM)'s subsidiary, Jurong Shipyard, has secured a US$596m contract for a newbuild ultra-high specification jack-up rig for deployment in the United Kingdom sector of the North Sea from Noble Corporation
It comes with an option for an additional unit
The rig will be built based on the Gusto MSC CJ70 design and is in line with an enhanced version of Statoil's "Cat J" specifications.
Scheduled for delivery in 1Q16, it will have an air gap of 69 metres and will be capable of operating in water depths of up to 150 metres (492 feet) in harsh environment conditions, with a maximum total drilling depth capacity of 10,000 metres (approx. 33,000 feet)
More significantly, SMM won this contract against another finalist, South Korea's Daewoo Shipbuilding & Marine Engineering
This win demonstrates Singapore rigbuilders' competitive strength in the jack up segment
In addition to this latest rig order, Jurong Shipyard is currently constructing six F&GJU3000N class jack-up rigs worth a total of US$1.3 bn (secured in 2010 and 2011) for Noble
The yard has also successfully delivered two units of Bingo 9000 ultra-deepwater semisubmersibles the Noble Danny Adkins and Noble Jim Day, in 2009 and 2010 respectively
The latest order brings SMM's YTD wins to S$2.43bn, forming 49% of our full year expectation of S$5bn
While this sizeable contract win is encouraging, we would like to see a faster ramp up of new orders that will boost earnings visibility in 2014, strong pick up in repair sales in 2H13, and continued improvement in margins before revisiting our HOLD recommendation and TP of S$4.70
CREDIT SUISSE Securities says...
KEPPEL CORPORATION | OUTPERFORM | TP:S$13.70
We visited the show gallery of Corals at Keppel Bay, a 366-unit 99-year leasehold condominium newly launched by Keppel last weekend
More than 100 units of the project have been sold, close to all the units launched in the initial phase
Prices for one- and two-bedroom units were at about S$2,160-2,310 psf
This represents a 7-14% premium to the average 2013 transacted price of Reflections, and a 34-43% premium to the average 2013 transacted price of Caribbean
We attribute the good sales to its waterfront location and proximity to the Harbourfront MRT station
Demand was the strongest for the one-bedroom units due to limited supply in the vicinity
We understand that buyers were an even mix between Singaporeans and foreigners
We maintain our OUTPERFORM rating on Keppel and target price of S$13.70, with the property business representing 19% of our SOTP valuation
This is based on Credit Suisse's target price for Keppel Land (NEUTRAL, TP S$4.10) and our Keppel Bay RNAV estimate of S$0.13 per share |
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