Mandarin Oriental

Mandarin Oriental: plans to invest US$500m in two luxury projects in Istanbul with Turkish partner Astas Holding AS. The JV bought land yday on the Bosporus strait that divides Asia and Europe. It will build a hotel on 15k sm of land called the Kurucesme Arena and plans another hotel at Istanbul’s tourist district of Sultanahmet, which includes the Blue Mosque, Hagia Sophia cathedral and Topkapi Palace. Astas, which builds and operates residential buildings and hotels in Turkey with Kempinski of Germany, also has a holiday resort in a venture with Mandarin in Bodrum on Turkey’s southwestern coast. Mandarin Oriental last wk reported 1H12 results. Headline net profit was below expectations. HSBC cut TP to US$1.90 from US$2.00, but maintained Overweight rating. Citi cut TP to US$1.80 from $2.00, but reiterated its Buy call. Notes the stock is trading half a std dev below its historical avg and just 0.5x adj P/B (incl leasehold properties), aided by a 4.3% div yield.