OUE

OUE: After OUE's distribution-in-specie (1 OUE Hospitality Trust unit for every 6 OUE shares), OUEHT will be classified as an associated company. Daiwa estimates that OUE will recognise a gain of $900m on its books in its 1Q14 financials due to accounting treatment. Daiwa estimates that OUE will swing from a full-year loss in 2013 (dragged down by revaluation losses) to a net profit of over $1bn for 2014. House estimate that OUE’s FY14 book value will increase to $4.24 (+33%). House reiterate its BUY rating on OUE (TP $3.20), and believe there is a wide disconnect between its share-price performance over the past 12 months and the company’s accomplishments over the period.