Thursday, January 31, 2013


Guocoleisure: is up 2% at $0.735 on above avg volume, extending yday’s price surge. Co announced its 1HFYJun13 results last Friday evening. Revenue at US$203.9m, +7.5% yoy, mainly due to higher revenue generated from the hotel segment during the 2012 Summer Olympics, which helped offset some weakness on the gaming side. Net profit however fell 4.1% yoy to US$35.5m, as oil & gas income decreased 18% yoy due to lower avg crude oil px, and lack of a one-off royalty distribution of US$5.4m arising from settlement of a royalty dispute in the previous yr. On outlook, mgt noted that the adverse situation in the Eurozone and UK continues to have an impact on the group’s hospitality business which is its largest segment. However, mgt expects contribution from the Bass Strait oil and gas royalty in Australia to remain strong. The group will also continue to focus on the disposal of its remaining assets in Fiji. Overall, mgt expects the group to perform satisfactorily. The counter trades at 11.1x annualized 1HFY13 P/E, 0.68x P/B. Market watchers have tipped Guocoleisure as an undervalued asset play, particularly as the bulk of its assets comprise invmt properties and properties under devt. In 4Q12, The Edge tipped that the retirement of Jeremy Hosking, a key founder-director of Marathon Asset Mgt, could be a prelude to privatization of the companies it has invested in – Guocoleisure being amongst the list. Hosking was known for value investing, and as an activist shareholder, resisted several buyout offers by major shareholders previously.

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