OUE

OUE: StanChart says its channel chats with developers and property consultants on the ground continue to point to possible asset sales by OUE. Notes the Mandarin Orchard owned by OUE is held at $119m on its balance sheet while independent valuation as at Dec 2011 was $1.18b (representing $1.2m/key). Estimates that if this asset was sold at $1.06b, OUE could book a divestment gain of $1/sh, with a fair chance that the co could pay a portion of the divestment gain in dividend. Points out that OUE paid out dividend of $0.13/sh in FY11, equivalent to 88% of 2011 operating cashflow and 100% of core net profit. The house reiterates its high conviction call on OUE with TP $3.22.