Guocoleisure

Guocoleisure: CIMB maintains Add with TP $1.20. Following its meeting with GuocoLeisure during which the house was provided a clearer picture of its refurbishment plan, CIMB revise its FY14-16 earnings forecasts to reflect a more evenly-spread impact of the refurbishment works at its five key London Hotels. FY14’s EPS is adjusted upwards by 62.8% (as had previously incorporated a significant shortfall in FY14 hotel revenue), while FY15 and FY16 numbers are cut by 8.1% and 16.9% respectively. Nevertheless, these adjustments have negligible impact on its RNAV-based valuation. The house reiterate its Add rating with the target price unchanged at $1.20, based on 30% discount to CY14’s RNAV. Key catalysts include value-unlocking activities such as the sale of non-core businesses.