20 June 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 : A gentle word, a kind look, a good-natured smile can work wonders and accomplish miracles.
- WILLIAM HAZLITT
Singapore: The Day AheadSINGAPORE DAYBOOK: Stop-work order if severe haze continues. Govt sets up haze task force; schools may face closure THE government may issue a stop work order if the haze situation continues at hazardous levels.
The problem in Singapore officially reached crisis levels as the air pollution index entered "hazardous" territory yesterday - hitting a historical high of 321 last night.
Environment Minister Vivian Balakrishnan said at a hastily convened press conference last night that the Manpower Ministry may even issue a stop-work order depending on the severity of the situation.
And in a development that could have implications for companies with investments in Indonesia, Singapore is planning to publish satellite pictures to link specific hotspots to firms. (Source: The Business Times)
MARKET SCOOP
US: Stocks tumble after Fed signals bond tapering
Singapore smog breaches 'hazardous' level
Singapore Airlines orders 30 more Airbus A350s
Govt releases H2 industrial GLS sites
Riady dangles payout for OUE shareholders
Q2 property investment sales slip 10%
(Source: The Business Times)
UIB KAY HIAN says...
CAPITALAND LTD | BUY | TP: S$4.41
CapitaLand announced the acquisition of a 70% stake in Shanghai Guang Chuan Property Co. Ltd., a wholly-owned subsidiary of Shanghai Shentong Metro Assets Management for RMB1.95b (about S$397.5m)
The sole asset of Shanghai Guang Chuan Property is a prime site in Hanzhonglu, Zhabei District, Shanghai. CapitaLand and Shanghai Shentong Metro Group plan to jointly develop the 25,427 sqm site into a mixed development comprising residential, office and retail components
The site sits right above an interchange station for metro lines 1, 12 and 13 and enjoys a waterfront view of the Suzhou River.The site consists of two plots of land with a total GFA of 110,000 sqm
The project will commence in 2015 and is expected to be completed by 2017
CapitaLand brings its unique capabilities to integrate mixed developments seamlessly with the metro stations, while Shentong Assets brings its experience of developing and managing properties above stations and along the metro lines in Shanghai
The move will further strenghthen CapitaLand's presence in China that accounts for 38% of its value
We estimate that the acquisition could add about S$160m in pretax profits and result in a RNAV accretion of 3 cents (0.5%) a share
We leave the RNAV unchanged at this stage pending more details from the management
We have a BUY call on CapitaLand with a target price of S$4.41/share pegged at 15% discount to its RNAV of S$5.18/share
CapitaLand is trading at a steep 37% discount to its RNAV and a deep 25% discount to its long term P/B of 1.2x
CREDIT SUISSE Securities says ...
COMFORTDELGRO CORPORATION | OUTPERFORM | TP: S$2.10
We upgrade our rating for ComfortDelgro (CD) to OUTPERFORM from Neutral on earnings 'accretion' arising from acquisitions made over the last three months, which will lift our earnings estimates for the stock from FY14
In addition, the stock has fallen c.14% over the last month and now represents better value
We expect the recent acquisitions of the UK and Australian bus operations to accelerate EPS growth to c.9% for 2014E, and push EPS for 2012-14 in excess of 4% CAGR
While 4% seems low, it compares favourably to the group's c.2% EPS CAGR for the period 2007-12
As the group generally operates in mature markets, earnings growth beyond 2014 will likely be lacklustre without acquisitions
CD, however, has proven to be a prudent acquirer of overseas businesses during the past five years
We believe the group will likely be able to replicate this successful strategy beyond 2014 to enhance profitability
Our new target price of S$2.10 is based on 16x FY14E P/E
We believe higher earnings growth (via recent acquisitions) and future M&A-led earnings growth should justify a modest premium to its ten-year average P/E of 15x
In addition, the stock's FY13/14E dividend yield of 3.6-3.9% is in line with the broader market and should provide support for its stock
DMG OSK Securities says...
SINGAPORE PRESS HOLDINGS | SELL | TP: S$4.00
SPH shareholders have overwhelmingly backed the group's decision to list SPH REIT and pay a special dividend
During an extraordinary general meeting (EGM) on Tuesday morning, the first resolution to establish SPH REIT and inject Paragon and Clementi Mall assets into the REIT was carried with 99.79% approval
The second resolution of a SGD18 cent per share special dividend payout to shareholders was also passed with interests of 99.94% of shares voted in favour, which was conditional on the first resolution being passed
This outcome does not come as a surprise to us as we had expected that the special dividend payout would suffice to entice shareholders to vote in favour of SPH REIT's listing
The payout is attractive as it amounts to 75% of the company's FY12 payout and implies a boost to the stock's FY13 dividend yield to 9.7%
However, our concerns lie on the accretive use of the proceeds raised
Maintain SELL with our SOTP TP of SGD4.00 |
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