Centurion: UOB Kay Hian maintains its Buy rating and TP of $0.725, citing the rising interest in the UK student housing market after the recent acquisition by Far East Orchard on four properties in Newcastle.
The house also noted that there has been a recent rise in investment interest, apart from Far East Orchard.
While this may result in increasingly difficulties for Centurion to make more acquisitions of quality student accommodation assets at favourable prices, the increased interest in the asset class may provide potential monetising opportunities for the company in future.
Wednesday, May 6, 2015
Tigerair
Tigerair: DBSV maintains its Buy rating and raised its TP to $0.42 as the house continues to like the stock as a recovery play, citing that Tigerair is expected to post its first full-year profit in five years in the coming year.
Although Tigerair's 4QFY15 results released yesterday missed DBSV's expectations on the bottom line, yields were higher than expected and current fuel prices of US$73/barrel (Apr) remain well below its assumption of US$90/barrel.
With a revitalised balanced sheet, and a recovery in earnings and cash flow, DBSV's TP is lifted based on 8x FY15/16 EV/EBITDA.
Although Tigerair's 4QFY15 results released yesterday missed DBSV's expectations on the bottom line, yields were higher than expected and current fuel prices of US$73/barrel (Apr) remain well below its assumption of US$90/barrel.
With a revitalised balanced sheet, and a recovery in earnings and cash flow, DBSV's TP is lifted based on 8x FY15/16 EV/EBITDA.
SG Market (06 May 15)
Singapore stocks are expected to open lower, taking cue from the sell-off in Wall Street overnight, following a huge jump in the trade deficit, and a sell-off in global bonds on new concerns about Greece's debt crisis.
Regional bourses are trading lower this morning in Seoul (-0.9%) and Sydney (-1.8%), with Tokyo closed for Constitution Day.
From a chart perspective, technical support for the STI is seen at 3,445 (50-dma) with immediate resistance at 3,520
Stocks to watch:
*Economy: Jurong East picked as terminal station for planned high-speed rail linking Spore-KL, which dovetails with overall plans to transform the area into S’pore 2nd central business district. Project will not meet its original 2020 deadline but likely operational only by 2023 at earliest as actual construction would take 5 years, in addition to a year to carrying out tender process and another year to design the HSR link.
*Noble: 1Q15 results missed. Net profit fell 30% y/y to US$106.6m, which paled the same quarter last year due to the Polar Vortex in North America, which resulted in extraordinary energy demand. Overall revenue fell 7% to US$16.6b. In the energy segment, revenue was down 16% on sharp drop in prices of oil liquids and energy coal, although this was slightly offset by a 5% increase in mining & metal’s revenue. Overall tonnage rose 67.4% to 65.8m tons, while operating margin slipped 0.38ppt to 2.51%. Share of losses from JVs and associates widened 5.3x to US$71.6m due to weaknesses from Yancoal and Noble Agri. NAV/share of US$0.76.
*OSIM: 1Q15 results missed. Net profit fell 53.1% y/y to $13.5m, making up only 12% of full year consensus target, while revenue fell 13.2% to $149.8m, on softer sales due to absence of new major OSIM product launches. Operating EBITDA margin fell to 15.3% from 24.3%. Bottom line was squeezed as sales faltered but operating expenditure held steady. 1¢ interim DPS announced. NAV/share of $0.59.
*Eu Yan Sang: 3QFY15 net profit fell 38% to $5.4m, while revenue was flat, as lower revenue from Hong Kong/ Macau was cushioned by Malaysia, Australia and Singapore. Gross margin stood at 46.8% (-2.6ppt) on less favourable sales mix. Bottom-line was partially aided by $1.1m FX gains versus $68k from the previous year. NAV/share of $0.368
*PACC Offshore: 1Q15 results missed. Net profit crashed 99.9% to US$21k, largely due to the absence of gain of sale from five vessels (US$25.9m) from the previous year. Revenue rose 9% to US$57.6m, driven mainly by contributions from the OSV (+13%) and Offshore accommodation (+208%) segments. Overall gross margin crashed to 13.9% from 30%, as rates and utilisation continues to remain under pressure across most segments. Bottom-line was further weighed by a 59% decline in JV contributions to US$1.3m. NAV/share of US$0.67.
*Hafary: 3QFY15 net profit dropped 47% y/y to $1.1m, impacted mainly by inventory purchases and related expenses (+45%). Meanwhile, revenue surged 29% to $25.5m, driven by both its general (+15%) and project (+41%) segments, buoyed by a higher supply of tiles and building materials for several development projects. Interim DPS of 0.5¢ declared (3QFY14: nil). NAV/share of 9.7¢.
*mm2 Asia: FYMar15 net profit surged 85% to $5.1m, as revenue spiked 51% to $24.3m from an increased number of productions. Gross margin improved 7.5ppt to 39.1% on a change in sales mix, while bottom line was dragged by higher staff costs from a larger pool of senior management staff, as well as one time professional fees for its IPO in Dec ’14. NAV/share of $0.09.
*SGX: For the month of April, securities average daily trading value was $1.3b (+3% y/y, +11% m/m). There was 3 IPOs and 39 bond listings, raising more than $11.1b. Derivatives ADTV was up 87% y/y (+15% m/m) to 781,782 contracts. A new single-day record volume of 1.9m contracts was made on 28 Apr.
*Q&M Dental: Exploring a possible spin-off of its China and Malaysian subsidiaries, via a listing on a reputable stock exchange. The company has hired professional parties to explore the proposed listing.
*Sinarmas Land: Subsidiary PT Puradelta Lestari has obtained preliminary approval for an IPO on the Indonesia Stock Exchange, which will see the subsidiary offering up to 10.8b new shares.
*Sino Grandness: Garden Fresh juices have been sold in multiple 7-Eleven stores in HK since April, and is aiming for Thai export market next.
*Sino Construction: To undertake additional construction at Micro Power Plant One in Pohang, South Korea, its JV project with Primeforth Renewable Energy, subject to final certification.
Regional bourses are trading lower this morning in Seoul (-0.9%) and Sydney (-1.8%), with Tokyo closed for Constitution Day.
From a chart perspective, technical support for the STI is seen at 3,445 (50-dma) with immediate resistance at 3,520
Stocks to watch:
*Economy: Jurong East picked as terminal station for planned high-speed rail linking Spore-KL, which dovetails with overall plans to transform the area into S’pore 2nd central business district. Project will not meet its original 2020 deadline but likely operational only by 2023 at earliest as actual construction would take 5 years, in addition to a year to carrying out tender process and another year to design the HSR link.
*Noble: 1Q15 results missed. Net profit fell 30% y/y to US$106.6m, which paled the same quarter last year due to the Polar Vortex in North America, which resulted in extraordinary energy demand. Overall revenue fell 7% to US$16.6b. In the energy segment, revenue was down 16% on sharp drop in prices of oil liquids and energy coal, although this was slightly offset by a 5% increase in mining & metal’s revenue. Overall tonnage rose 67.4% to 65.8m tons, while operating margin slipped 0.38ppt to 2.51%. Share of losses from JVs and associates widened 5.3x to US$71.6m due to weaknesses from Yancoal and Noble Agri. NAV/share of US$0.76.
*OSIM: 1Q15 results missed. Net profit fell 53.1% y/y to $13.5m, making up only 12% of full year consensus target, while revenue fell 13.2% to $149.8m, on softer sales due to absence of new major OSIM product launches. Operating EBITDA margin fell to 15.3% from 24.3%. Bottom line was squeezed as sales faltered but operating expenditure held steady. 1¢ interim DPS announced. NAV/share of $0.59.
*Eu Yan Sang: 3QFY15 net profit fell 38% to $5.4m, while revenue was flat, as lower revenue from Hong Kong/ Macau was cushioned by Malaysia, Australia and Singapore. Gross margin stood at 46.8% (-2.6ppt) on less favourable sales mix. Bottom-line was partially aided by $1.1m FX gains versus $68k from the previous year. NAV/share of $0.368
*PACC Offshore: 1Q15 results missed. Net profit crashed 99.9% to US$21k, largely due to the absence of gain of sale from five vessels (US$25.9m) from the previous year. Revenue rose 9% to US$57.6m, driven mainly by contributions from the OSV (+13%) and Offshore accommodation (+208%) segments. Overall gross margin crashed to 13.9% from 30%, as rates and utilisation continues to remain under pressure across most segments. Bottom-line was further weighed by a 59% decline in JV contributions to US$1.3m. NAV/share of US$0.67.
*Hafary: 3QFY15 net profit dropped 47% y/y to $1.1m, impacted mainly by inventory purchases and related expenses (+45%). Meanwhile, revenue surged 29% to $25.5m, driven by both its general (+15%) and project (+41%) segments, buoyed by a higher supply of tiles and building materials for several development projects. Interim DPS of 0.5¢ declared (3QFY14: nil). NAV/share of 9.7¢.
*mm2 Asia: FYMar15 net profit surged 85% to $5.1m, as revenue spiked 51% to $24.3m from an increased number of productions. Gross margin improved 7.5ppt to 39.1% on a change in sales mix, while bottom line was dragged by higher staff costs from a larger pool of senior management staff, as well as one time professional fees for its IPO in Dec ’14. NAV/share of $0.09.
*SGX: For the month of April, securities average daily trading value was $1.3b (+3% y/y, +11% m/m). There was 3 IPOs and 39 bond listings, raising more than $11.1b. Derivatives ADTV was up 87% y/y (+15% m/m) to 781,782 contracts. A new single-day record volume of 1.9m contracts was made on 28 Apr.
*Q&M Dental: Exploring a possible spin-off of its China and Malaysian subsidiaries, via a listing on a reputable stock exchange. The company has hired professional parties to explore the proposed listing.
*Sinarmas Land: Subsidiary PT Puradelta Lestari has obtained preliminary approval for an IPO on the Indonesia Stock Exchange, which will see the subsidiary offering up to 10.8b new shares.
*Sino Grandness: Garden Fresh juices have been sold in multiple 7-Eleven stores in HK since April, and is aiming for Thai export market next.
*Sino Construction: To undertake additional construction at Micro Power Plant One in Pohang, South Korea, its JV project with Primeforth Renewable Energy, subject to final certification.
Tuesday, May 5, 2015
OCBC
OCBC: UBS downgraded OCBC to Sell and reduced TP to $10.10 (from $11.00), citing that OCBC's CET1 capital ratio is running well below peers and there is a perceived lack of clear focus on capital.
OCBC's 1Q results were ahead of expectations but the quality was fairly low. Key drivers were strong trading gains in a seasonally strong quarter and a very low loan impairment charge. The latter just looks very low in the current environment and should be a cause of concern - another reason for the downgrade. The total provision buffer, at 1.08% of gross loans, is the lowest among peers.
OCBC's 1Q results were ahead of expectations but the quality was fairly low. Key drivers were strong trading gains in a seasonally strong quarter and a very low loan impairment charge. The latter just looks very low in the current environment and should be a cause of concern - another reason for the downgrade. The total provision buffer, at 1.08% of gross loans, is the lowest among peers.
Riverstone
Riverstone: 1Q15 results thrashed street estimates, as net profit jumped 68.6% y/y to RM27m on stronger than expected ASP and margins.
Revenue increased 44.8% to RM127.2m, from increased volume and stronger ASP (+5.6%) also helped. ASP strength was from the USD, which appreciated 10% y/y against the RM, as well as increased contribution from higher margin cleanroom gloves
Favourable product mix, coupled with lower butadiene (key raw material) costs helped gross margin to expand 0.9ppt to 31.6%
Bottom line was also aided by a net FX gain, which drove other operating income to RM1.7m. This contrasted last year where net FX loss resulted in other operating expenses of RM0.9m.
Riverstone’s Phase 2 expansion is on track to start contributing in 3Q15. This will add 1b of capacity to the current 4.2b p.a.
Riverstone is currently trading at 12x FY15e P/E, which Maybank-KE says this is undemanding, citing Riverstone has the strongest EPS growth prospects and ROE amongst peers, which are on average trading at 20x FY15e P/E.
Maybank-KE maintains Buy on Riverstone with TP increased to $1.78 from $1.48.
Revenue increased 44.8% to RM127.2m, from increased volume and stronger ASP (+5.6%) also helped. ASP strength was from the USD, which appreciated 10% y/y against the RM, as well as increased contribution from higher margin cleanroom gloves
Favourable product mix, coupled with lower butadiene (key raw material) costs helped gross margin to expand 0.9ppt to 31.6%
Bottom line was also aided by a net FX gain, which drove other operating income to RM1.7m. This contrasted last year where net FX loss resulted in other operating expenses of RM0.9m.
Riverstone’s Phase 2 expansion is on track to start contributing in 3Q15. This will add 1b of capacity to the current 4.2b p.a.
Riverstone is currently trading at 12x FY15e P/E, which Maybank-KE says this is undemanding, citing Riverstone has the strongest EPS growth prospects and ROE amongst peers, which are on average trading at 20x FY15e P/E.
Maybank-KE maintains Buy on Riverstone with TP increased to $1.78 from $1.48.
SG Market (05 May 15)
Singapore stocks are expected to open higher, taking cue from Wall Street, buoyed by positive data from US factory orders which showed its first rise in eight months.
Regional bourses are trading higher this morning in Seoul (+0.2%) and Sydney (+1.1%), with Tokyo closed.
From a chart perspective, technical support for the STI is seen at 3,445 (50-dma) with immediate resistance at 3,520.
Stocks to watch:
*Economy: Both prime ministers from Singapore and Malaysia are holding a 2 day meeting, which is expected to see updates on the proposed S’pore-KL high-speed rail, as well as planned rapid transit system project connecting Malaysia's Johor Bahru and S’pore Woodlands.
*Tiger Airways: 4QFY15 net loss narrowed sharply to $18.8m from $95.5m a year earlier as revenue climbed 5% y/y to $172.2m, driven by stronger yield (+12%), higher load factor (+3.9ppt) and lower fuel cost (-20%). Operating loss contracted to $2.3m (4QFY14: -$24.2m) despite a change in fleet depreciation policy and maintenance provisions, which led to a one-time charge of $10.8m. Otherwise, EBITDA would have registered a $4m profit (4QFY14: -$37m). The results brought FY15 net loss to $264.2m (FY14: -$223m) on revenue of $677.4m (FY14: 746.5m). NAV/share of $0.0863.
*Hi-P: 1Q15 net loss widened to $13.8m from $12.3m, despite revenue soaring 56.4% y/y to $279.8m. Top-line growth was contributed by the group’s ODM product, other high component content assembly products as well as orders from new customers. Gross margin compressed to 1.6% (-0.3ppt), due to higher material costs and start-up costs in Nantong plant. Bottom line was weighed by the absence of insurance claim this year, increased SG&A expenses, and fair value losses from derivatives, partially offset by FX gains. NAV/share of $0.7456
*Marco Polo Marine: 2QFY15 net profit increased 26% y/y to $3.8m, while revenue fell 9% to $29.7m, from weakness in the ship chartering business (-65.6% to $5.4m), due to the deconsolidation of BBR post-disposal, lower utilization rates, and transitional deployment of one of the OSVs. These were partially offset by increase in shipbuilding and repair operations (+44.6% to $24.3m). Gross margin fell 4.2ppt to 22.9%, from lower ship chartering contributions. Bottom-line was aided by FX gains, lower operating expenses and lower finance costs. Meanwhile, JV losses of $0.4m were booked versus profits of $0.2m last year. NAV/share of $0.529.
*Riverstone: 1Q15 net profit jumped 68.6% y/y to RM27.0m, while revenue increased 44.8% to RM127.2m, due to higher gloves demand. Gross margin improved 0.9ppt to 31.6%. Bottom line was also aided by an FX gain of RM1.7m, versus FX loss of RM0.9m a year earlier. NAV/share of RM1.09.
*Ellipsiz: 3QFY15 net profit more than doubled to $1.2m, while revenue fell 22% to $25.6m from lower contribution from distribution & services, due to divestment of facilities, slightly offset by increase in probe card solutions (PCS) revenue. Bottom line was aided by a 10ppt expansion in gross margin to 37% from stronger PCS contributions, and FX gains, but slightly mitigated by increased R&D expenses (+26%). NAV/share of $0.219.
*IPC: 1Q15 turned into net profit of $0.2m compared to loss of $1.6m in 1Q14, boosted by unrealised FX gains of $1.2m (1Q14: -$1m) from stronger USD/SGD, as well as lower distribution and marketing expenses (-63% y/y). Meanwhile, revenue slipped 7.1% to $6.9m due to the absence of sales from a fully sold project, as well as fewer unsold units available for sale in Japan, further dragged by absence of rental income from two hotels which were sold at end-FY14. NAV/share of $0.249.
*QT Vascular: Company assures investors on on-going patent infringement suit by AngioScore Inc for its Chocolate PTA balloon catheter. Highlights probability that AngioScore could obtain a permanent injunction is minimum as AngioScore does not practise the '119 Patent. The worst case liability would involve payment of a reasonable royalty on such products made, used or sold in US, which is not expected to have a material effect on its financial position and profitability.
*Lereno Bio-Chem: Non-binding term sheet to acquire 51%-stake in HTwo Education Holdings, a group which specialises in infant and childcare services, student care, tuition, enrichment businesses and the operations of a private institution. The $20.4m consideration is expected to be paid via cash, funded through rights issue and private placement, and new shares of Lereno.
*Soilbuild Business Space REIT: Issued 111.8m new units at $0.805 each via a private placement, enlarging unit base by 13.7%. Net proceeds of $88.4m is intended to partially fund the acquisition of the property located at 72 Loyang Way.
*Sing Holdings: Expects 1Q15 loss, weighed by higher sales and marketing expenses incurred for the group‘s development properties.
*Kencana Agri: Expects to report a consolidated net loss for 1Q15 mainly due to FX losses resulting from the depreciation of the Rupiah against the USD and lower average selling prices of CPO.
Regional bourses are trading higher this morning in Seoul (+0.2%) and Sydney (+1.1%), with Tokyo closed.
From a chart perspective, technical support for the STI is seen at 3,445 (50-dma) with immediate resistance at 3,520.
Stocks to watch:
*Economy: Both prime ministers from Singapore and Malaysia are holding a 2 day meeting, which is expected to see updates on the proposed S’pore-KL high-speed rail, as well as planned rapid transit system project connecting Malaysia's Johor Bahru and S’pore Woodlands.
*Tiger Airways: 4QFY15 net loss narrowed sharply to $18.8m from $95.5m a year earlier as revenue climbed 5% y/y to $172.2m, driven by stronger yield (+12%), higher load factor (+3.9ppt) and lower fuel cost (-20%). Operating loss contracted to $2.3m (4QFY14: -$24.2m) despite a change in fleet depreciation policy and maintenance provisions, which led to a one-time charge of $10.8m. Otherwise, EBITDA would have registered a $4m profit (4QFY14: -$37m). The results brought FY15 net loss to $264.2m (FY14: -$223m) on revenue of $677.4m (FY14: 746.5m). NAV/share of $0.0863.
*Hi-P: 1Q15 net loss widened to $13.8m from $12.3m, despite revenue soaring 56.4% y/y to $279.8m. Top-line growth was contributed by the group’s ODM product, other high component content assembly products as well as orders from new customers. Gross margin compressed to 1.6% (-0.3ppt), due to higher material costs and start-up costs in Nantong plant. Bottom line was weighed by the absence of insurance claim this year, increased SG&A expenses, and fair value losses from derivatives, partially offset by FX gains. NAV/share of $0.7456
*Marco Polo Marine: 2QFY15 net profit increased 26% y/y to $3.8m, while revenue fell 9% to $29.7m, from weakness in the ship chartering business (-65.6% to $5.4m), due to the deconsolidation of BBR post-disposal, lower utilization rates, and transitional deployment of one of the OSVs. These were partially offset by increase in shipbuilding and repair operations (+44.6% to $24.3m). Gross margin fell 4.2ppt to 22.9%, from lower ship chartering contributions. Bottom-line was aided by FX gains, lower operating expenses and lower finance costs. Meanwhile, JV losses of $0.4m were booked versus profits of $0.2m last year. NAV/share of $0.529.
*Riverstone: 1Q15 net profit jumped 68.6% y/y to RM27.0m, while revenue increased 44.8% to RM127.2m, due to higher gloves demand. Gross margin improved 0.9ppt to 31.6%. Bottom line was also aided by an FX gain of RM1.7m, versus FX loss of RM0.9m a year earlier. NAV/share of RM1.09.
*Ellipsiz: 3QFY15 net profit more than doubled to $1.2m, while revenue fell 22% to $25.6m from lower contribution from distribution & services, due to divestment of facilities, slightly offset by increase in probe card solutions (PCS) revenue. Bottom line was aided by a 10ppt expansion in gross margin to 37% from stronger PCS contributions, and FX gains, but slightly mitigated by increased R&D expenses (+26%). NAV/share of $0.219.
*IPC: 1Q15 turned into net profit of $0.2m compared to loss of $1.6m in 1Q14, boosted by unrealised FX gains of $1.2m (1Q14: -$1m) from stronger USD/SGD, as well as lower distribution and marketing expenses (-63% y/y). Meanwhile, revenue slipped 7.1% to $6.9m due to the absence of sales from a fully sold project, as well as fewer unsold units available for sale in Japan, further dragged by absence of rental income from two hotels which were sold at end-FY14. NAV/share of $0.249.
*QT Vascular: Company assures investors on on-going patent infringement suit by AngioScore Inc for its Chocolate PTA balloon catheter. Highlights probability that AngioScore could obtain a permanent injunction is minimum as AngioScore does not practise the '119 Patent. The worst case liability would involve payment of a reasonable royalty on such products made, used or sold in US, which is not expected to have a material effect on its financial position and profitability.
*Lereno Bio-Chem: Non-binding term sheet to acquire 51%-stake in HTwo Education Holdings, a group which specialises in infant and childcare services, student care, tuition, enrichment businesses and the operations of a private institution. The $20.4m consideration is expected to be paid via cash, funded through rights issue and private placement, and new shares of Lereno.
*Soilbuild Business Space REIT: Issued 111.8m new units at $0.805 each via a private placement, enlarging unit base by 13.7%. Net proceeds of $88.4m is intended to partially fund the acquisition of the property located at 72 Loyang Way.
*Sing Holdings: Expects 1Q15 loss, weighed by higher sales and marketing expenses incurred for the group‘s development properties.
*Kencana Agri: Expects to report a consolidated net loss for 1Q15 mainly due to FX losses resulting from the depreciation of the Rupiah against the USD and lower average selling prices of CPO.
Monday, May 4, 2015
CapitaLand
CapitaLand: 1Q15 results were broadly in line, with net profit of $161.3m (-11.8% y/y) in absence of discontinued operations from 39.1% associate Australand, which was divested in 1Q14. Excluding revaluation and portfolio gains, operating net earnings would have come in flat at $155.3m (-0.3%).
Revenue jumped 49.4% to $915m on strong home sales in Singapore, China and Vietnam, as well as higher rentals from its shopping mall and serviced residence businesses.
Revenue from Singapore surged 75.4% to $343.8m. The group sold 69 residential units (1Q14: 34 units) in Singapore amounting to $197m (+126%) with higher contributions from Urban Resort Condominium, Sky Habitat, Sky Vue and Bedok Residences as well as the maiden recognition of Marine Blue. EBIT however declined 15.2% to $100.0m due to the dilution of CapitaCommercial Trust’s interest in Quill Capita Trust in Malaysia.
China revenue more than doubled to $203.7m, mainly due to the consolidation of CL Township from Mar ‘15, while CapitaLand China sold 1,306 residential units worth ~Rmb2.2b, versus 1,177 units worth Rmb1.3b the previous year. The sales were mainly from The Paragon and Lotus Mansion in Shanghai, Dolce Vita in Guangzhou, La Botanica in Xi’an and Riverfront in Hangzhou. EBIT fell 32.4% to $88.4m, mainly due to lower share of results from CCRE and Lai Fung, FX losses and higher admin expenses.
Collectively, Singapore and China accounted for 60% of the group’s total revenue.
CapitaMalls Asia enjoyed higher revenue of $181.5m (+7.4%), mainly due to the improved performance from Westgate and Bedok Mall as well as higher progressive profit recognition for Bedok Residences in the current period.
Meanwhile, revenue from serviced residences (Ascott) grew 9.7% to $167.2m, mainly due to higher fee income and contribution from properties acquired in 2014.
Other operating income fell 63.0% to $17.5m, due largely to a 38.1% decline in interest income and the absence of a forfeiture deposit of $26.6m from the previous year.
Contributions from associates and JVs dipped 10.6% to $125.6m, mainly due to the lower contribution from associates in China, namely Central China Real Estate (CCRE) and Lai Fung Holdings, as well as the d’Leedon project in Singapore.
Overall, management remains positive on its prospects and aims to harness its key strengths across its various businesses to create differentiated real estate projects and enhance project returns, with Singapore and China remaining as the group’s core markets. The group also aims to pursue growth opportunities in Vietnam, Indonesia and Malaysia.
Balance sheet remained fairly sound with net gearing at 58% and valuations are undemanding at 0.91x P/B.
Latest broker ratings:
Maybank-KE maintains Hold with TP $3.85
CIMB maintains Add with TP $4.08
Daiwa maintains Hold wit TP $3.90
Deutsche maintains Buy with TP $4.20
OCBC maintains Buy with TP $4.07
UBS maintains Buy with TP $4.12
UOB Kay Hian maintains Buy with TP $4.08
Revenue jumped 49.4% to $915m on strong home sales in Singapore, China and Vietnam, as well as higher rentals from its shopping mall and serviced residence businesses.
Revenue from Singapore surged 75.4% to $343.8m. The group sold 69 residential units (1Q14: 34 units) in Singapore amounting to $197m (+126%) with higher contributions from Urban Resort Condominium, Sky Habitat, Sky Vue and Bedok Residences as well as the maiden recognition of Marine Blue. EBIT however declined 15.2% to $100.0m due to the dilution of CapitaCommercial Trust’s interest in Quill Capita Trust in Malaysia.
China revenue more than doubled to $203.7m, mainly due to the consolidation of CL Township from Mar ‘15, while CapitaLand China sold 1,306 residential units worth ~Rmb2.2b, versus 1,177 units worth Rmb1.3b the previous year. The sales were mainly from The Paragon and Lotus Mansion in Shanghai, Dolce Vita in Guangzhou, La Botanica in Xi’an and Riverfront in Hangzhou. EBIT fell 32.4% to $88.4m, mainly due to lower share of results from CCRE and Lai Fung, FX losses and higher admin expenses.
Collectively, Singapore and China accounted for 60% of the group’s total revenue.
CapitaMalls Asia enjoyed higher revenue of $181.5m (+7.4%), mainly due to the improved performance from Westgate and Bedok Mall as well as higher progressive profit recognition for Bedok Residences in the current period.
Meanwhile, revenue from serviced residences (Ascott) grew 9.7% to $167.2m, mainly due to higher fee income and contribution from properties acquired in 2014.
Other operating income fell 63.0% to $17.5m, due largely to a 38.1% decline in interest income and the absence of a forfeiture deposit of $26.6m from the previous year.
Contributions from associates and JVs dipped 10.6% to $125.6m, mainly due to the lower contribution from associates in China, namely Central China Real Estate (CCRE) and Lai Fung Holdings, as well as the d’Leedon project in Singapore.
Overall, management remains positive on its prospects and aims to harness its key strengths across its various businesses to create differentiated real estate projects and enhance project returns, with Singapore and China remaining as the group’s core markets. The group also aims to pursue growth opportunities in Vietnam, Indonesia and Malaysia.
Balance sheet remained fairly sound with net gearing at 58% and valuations are undemanding at 0.91x P/B.
Latest broker ratings:
Maybank-KE maintains Hold with TP $3.85
CIMB maintains Add with TP $4.08
Daiwa maintains Hold wit TP $3.90
Deutsche maintains Buy with TP $4.20
OCBC maintains Buy with TP $4.07
UBS maintains Buy with TP $4.12
UOB Kay Hian maintains Buy with TP $4.08
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