CitySpring - Cityspring Infrastructure cut to Sell by Kim Eng

Stock Name: CitySpring
Company Name: CITYSPRING INFRASTRUCT TRUST
Research House: Kim Eng

Kim Eng Securities downgrades Cityspring Infrastructure Trust (A7RU.SG) to Sell from Hold, cuts target price to $0.52 from $0.62 on prospect of lower distribution payouts, dilution risks.

Notes Cityspring setting aside A$20 million ($25.4 million) before January 2011 in escrow account for its Basslink asset in bid to avoid credit rating downgrade for Basslink’s bonds; “the bonds, totalling A$866 million, face a possible rating downgrade that will trigger a cash lock-up at Basslink and affect CitySpring’s distribution policy.”

Says while having escrow account may resolve issue, Cityspring still required to provide capital structure plan to meet Standard & Poor’s stringent risk assessment; “even if Basslink continues to pay a distribution, we think the unitholders’ yield may still suffer a dilution.”



Stock off 0.8% at $0.59.

SuntecReit - CLSA ups Suntec REIT to Buy; favours office exposure

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST
Research House: CLSA

CLSA upgrades Suntec REIT (T82U.SG) to Buy vs Outperform, raises target price to $1.60. Says, private placement (at 4.0% discount to VWAP) in-line with other recent equity raising discounts of around 5.0%. 



“The deal is marginally yield accretive...raising DPU marginally by 1.0%-2.0%. In the long run...the deal is a huge positive as it enables Suntec REIT to acquire one of the key office prime jewels in Singapore.”

Beyond yield accretion, REIT’s earnings profile “now skewed towards the high end office sector which we favour.” Trading at 0.8X P/B offering 6.6% yield, says REIT cheaper than most office, retail peers yet offers upside from retail operations, stability from income support. 

Post-deal, expects office to contribute 57% of earnings vs less than 50% previously; “more importantly, high-end prime grade A office now accounts for 23% of earnings, up from 10%.” REIT off 0.7% at $1.42.

GLP - Citi nudges up GLP target; 1H results strong

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: Citigroup

Citigroup raises Global Logistic Properties (MC0.SG) target to $2.80 from $2.78, keeps at Buy.



Says strong fiscal 1H11 results helped by unique, policy-friendly business model, its China-Japan dual exposure.

Sets new target at par to estimated FY11E NAV/share, 1.53x FY11 P/B ratio. Says results generally in-line with expectations, strong growth in earnings mainly due to mid-teen increase in rental revenue together with good cost control.



Adds, acquisitions of logistics properties making good progress, low gearing to support further acquisitions; “current net gearing ratio will be approximately 16% based on the IPO proceeds, down from 33% right before IPO. We believe such a strong balance sheet should be able to help GLP in future acquisitions.”



Shares off 1.4% at $2.19.

LippoMapleT - Macquarie ups Lippo-Mapletree target to $0.64

Stock Name: LippoMapleT
Company Name: LIPPO-MAPLETREEINDORETAILTRUST
Research House: MacQuarie

Macquarie raises Lippo-Mapletree Indonesia Retail Trust (D5IU.SG) target price to $0.64 from $0.55 after rolling forward valuation to 2011, lowering risk-free rate assumption. Keeps Outperform call. 

Says annualized dividend yield remains attractive at 8.6%, while overall portfolio performance strong, with average occupancy at 98% in 3Q10 vs 81% industry average. 

Notes trust plans to double asset size to S$2 billion in next few years, mainly via acquisitions. 



Says funding no issue as current gearing only 13%; “LMIR will be the main beneficiary of the growth of the Indonesian economy and the stronger rupiah.”  REIT flat at $0.52.

SGX - Singapore Exchange raised to 'Buy' from 'Neutral' at Goldman

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Golman Sachs

Singapore Exchange had its rating raised to “buy” from “neutral” at Goldman Sachs Group Inc., saying it expects trading volumes to increase.



The brokerage also boosted its share-price forecast for the operator of the securities and derivatives exchange to $10.37 from $8.22 previously.

SGX - Singapore Exchange raised to 'Buy' from 'Neutral' at Goldman

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Golman Sachs

Singapore Exchange had its rating raised to “buy” from “neutral” at Goldman Sachs Group Inc., saying it expects trading volumes to increase.



The brokerage also boosted its share-price forecast for the operator of the securities and derivatives exchange to $10.37 from $8.22 previously.

 

Pac Andes - Pacific Andes Resources started at Outperform by Standard Chartered

Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD
Research House: StanChart

Standard Chartered starts Pacific Andes Resources Development (P11.SG) at Outperform with $0.47 sum-of-parts target price.



Expects steady recurrent earnings from supply chain management business, with unit China Fishery’s (B0Z.SG) strong growth momentum, margins underpinning group prospects.

Forecasts 13% earnings CAGR over 2010-2013 for frozen fish supplier; “PARD provides a cheap proxy for the strong growth momentum of China Fishery and rising domestic consumption in China.”



Tips 5%-6% annual average profit growth in next 3 years for supply chain management arm, which accounts for 43% of group revenue. Shares +1.5% at $0.335.