OUE

OUE moves a step closer to a spin-off of its commercial assest, after the group announced that it has attained the eligibility to list letter for the IPO of OUE Commercial Trust by SGX. The offering is however subjected to prevailing market conditions, the receipt of all requisite regulatory approvals and the evaluation of all relevant considerations. With the looming IPO expected by market watchers to take place in 1H14, investors may be hopeful for yet another round of special dividend payout. In its recent EGM, OUE also attained shareholders approval for a distribution in specie (1-for-6) of OUE Hospitality Trust (OUE-HT) units to OUE shareholders, offering an effective payout of 14.6¢ per OUE share. OUE’s ongoing attempts to unlock and recycle its property assets via spin-offs are pontetial catalysts that could result in the narrowing of OUE’s valuation gap towards book value. OUE currently trades at compelling at 0.72x P/B, and a 52% discount to Maybank-KE’s RNAV of $5.10. The stock continues to sit in Market Insight’s model Value portfolio; the majority of the street is similarly bullish on the counter with 11 Buys and 4 Hold ratings and consensus TP of $2.97.