Excerpts from analyst's report

Maybank Kim Eng analyst: Derrick Heng, CFA

Eyes on Value-Unlocking Deals 
With the sector trading at significant discounts to physical assets, we believe that the market may focus on deals that could unlock property values. This will narrow RNAV discounts. Sales of mature commercial properties are the lowhanging fruits, though we also see opportunities in the residential market. Time pressure from looming QC and ABSD deadlines could motivate more developers to pursue bulk sales or structure deals for unsold homes, in our opinion. 


 CityDev. So far, CityDev has monetised SGD2.6b of assets and could unlock another SGD2.4b to achieve its SGD5b AUM target by 2018. It could develop the next deal using the SGD4.5b of investment properties on its books or some high-end projects such as Gramercy Park, 50%-held Nouvel 18 and New Futura, in our view. The last three projects face time pressure from their QC deadlines.

 CapitaLand. CapitaLand has the most established platform for capital recycling. Management continues to reconstitute its portfolio. Last year, the group sold its stakes in PWC Building and Rivervale Mall; it also announced plans to redevelop Funan. We believe further asset divestments or injections into its funds/REITs offer upside to earnings.

A Ho Bee project, Paradise Island features 29 stylish 2-storey villas. Photo: Company Ho Bee. The mismatch between Ho Bee’s stock valuation and its underlying property values continues to offer opportunities, in our view. The company is seeking to sell Rose Court, one of its office assets in the UK. A successful sale should be positive for its stock. Office assets in Singapore and the UK make up 41% and 29% of its GAV respectively.

 Wing Tai. With approaching QC and ABSD deadlines for its residential projects, Wing Tai could try to offload unsold units. QC deadlines for 50%- held Nouvel 18 and Le Nouvel Ardmore are Nov 2016 and April 2016 respectively. The Crest, which is 40% held, remains substantially unsold with 1.5 years to its ABSD deadline in Sep 2017. Wing Tai faces penalties even if one unit of this project is unsold by then. Its recently established fund management platform could provide a conduit to offload these projects, in our view.

Full report here.

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings2.290-0.070
Best World2.4600.020
Boustead Singapore0.945-0.015
Broadway Ind0.125-0.003
China Aviation Oil (S)0.905-0.005
China Sunsine0.400-0.010
ComfortDelGro1.450-0.010
Delfi Limited0.895-0.005
Food Empire1.280-0.040
Fortress Minerals0.305-0.015
Geo Energy Res0.300-0.005
Hong Leong Finance2.480-0.010
Hongkong Land (USD)2.830-0.020
InnoTek0.520-0.015
ISDN Holdings0.3000.005
ISOTeam0.042-0.001
IX Biopharma0.040-0.005
KSH Holdings0.2550.005
Leader Env0.050-
Ley Choon0.0440.001
Marco Polo Marine0.067-0.002
Mermaid Maritime0.136-0.003
Nordic Group0.310-0.005
Oxley Holdings0.089-
REX International0.1380.003
Riverstone0.790-0.005
Southern Alliance Mining0.445-
Straco Corp.0.4950.010
Sunpower Group0.205-0.005
The Trendlines0.069-
Totm Technologies0.022-
Uni-Asia Group0.825-
Wilmar Intl3.4000.020
Yangzijiang Shipbldg1.740-0.030
 

We have 900 guests and no members online

rss_2 NextInsight - Latest News