Mandarin Oriental

Mandarin Oriental: CS has an unrated report on MO. Note that MO aspires to grow its platform in key gateway cities via management contract (more 'asset light') and in some cases owning equity stakes in the assets. It has the ROFR for some of the assets it currently manages, but it is not considering a REIT. The assets in MAND books are held at cost, which explains the low NAV of US$0.94, although the adjusted NAV per share as at June was US$2.86 (US$2.87b). (This represents more than 40% discount to its RNAV) Gearing based on the adjusted NAV is at 18%, and Management is comfortable taking up gearing slightly in view of opportunities/acquisitions, but is unlikely to hit the 50% levels as it is generally more conservative.