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MAYBANK KIM ENG |
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Golden Agri-Resources (GGR SP)
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DPU recovery: prefer large-caps and laggards
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| OCBC | CGS CIMB |
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OUE LIMITED: They sell; we buy
OUE’s FY18 revenue fell 14.7% to S$642.9m, largely due to lower contribution from the group’s property development arm (68.5% drop in revenue). PATMI saw a drop of 89.4% to S$10.0m, on the back of one-offs. We deem this set of results to be broadly under expectations. The group has proposed a special dividend of 11 S-cents. Given that Oakwood Premier has obtained its hotel licence in Jan 19, we believe that a possible divestment to OUE Hospitality Trust could be on the cards this year. In downtown Los Angeles, OUE is looking to divest of its US Bank Tower, while also actively looking for an opportune time to cash in on some of its investments to help par down debt. Taken together, we believe these divestments will help to narrow the significant discount that OUE trades at (Bloomberg forward P/B of 0.37x). We roll forward our valuations, and raise our fair value slightly from S$2.25 to S$2.32.
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Building up O&M fund portfolio
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Check out our compilation of Target Prices
