Royal Wharf

Oxley
Share price: 
43 c
Target: 
85 c
Source: RHB

Oxley Holdings has entered into an agreement to sell two blocks of its township development, Royal Wharf (picture), in London, for an aggregate consideration of £156.2m. 

With the sale of these two blocks, 89% of all Royal Wharf homes have been sold. 

Oxley has started handing over completed homes of Phase 1 to buyers and the handover process is estimated to generate strong cash inflow of £1bn in the next few years -- Phillip Securities.


Excerpts from CIMB report:

ComfortDelgro
Acquires the remaining 49% stake in Australian bus business ComfortDelGro announced on 21 Dec that it has entered into a Share Sale Agreement to acquire the remaining 49% stake in ComfortDelGro Cabcharge Pty Ltd (CDC) from its existing partner Cabcharge Australia Pty Ltd, for a cash consideration of A$186m (c.S$196m).

Positive financial impact
We expect the acquisition (still subject to approval by the Australian Foreign Investment Review Board) to be concluded in 1Q17F. We raise our FY17F EPS by 3.9%, to reflect the 9-month contribution of the additional 49% stake in CDC and FY18F EPS by 5% to reflect a full year’s contribution. The purchase consideration of S$196m, to be financed by internal funds and borrowings, would not be a stretch to the group’s balance sheet, in our view, given the group’s net cash position of S$259m as at end-3Q16.

ComfortDelGro
Share price: 
$2.55
Target: 
$2.91

Largely stable outlook with potentially higher dividend
We expect the group’s 2017 outlook to be underpinned by the likely higher Singapore bus margin under the bus contracting model and the commencement of the Downtown Line III operations (expected in Sep 17). We project higher dividend payout in FY16-18F at 66-70% (translating to yields of 3.8-4.6%), vs 64% in FY15.

We maintain Add on ComfortDelGro and raise our target price to S$2.91, to reflect the value-accretive acquisition of the 49% stake in CDC. Stiffer competition from Uber/Grab is a key risk.


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