Tuesday, January 28, 2014

OCBC Report 28 Jan 14

KEY IDEA

Global Premium Hotels: NAV climbs 62% to S$0.64

4Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. Total revenue fell 1.4% YoY to S$15.0m and gross profit rose 0.9% to S$13.2m. Net profit climbed 20.1% to S$5.2m. FY13 revenue and EPS came to 100% and 105% of our prior respective full-year estimates. Under other comprehensive income, GPH saw revaluation gain of land and hotels buildings of S$259.5m. This helped to boost NAV to 64.0 S cents as of end-Dec from 39.6 S cents as of end-Sep. We understand that recent transactions in the industry drove these revaluations. We maintain our FV of S$0.33 and BUY rating on GPH. The opening of the second Parc Sovereign hotel in 1H14 should lead to a significant earnings boost from 2H14.  (Sarah Ong)

MORE REPORTS


SMRT Corporation: 3QFY14 earnings weak as expected

As expected, SMRT reported another set of lacklustre results for 3QFY14. Although revenue climbed 4.1% YoY to S$293.3m due to positive contribution from all segments except its Taxi and LRT operations, PATMI dipped 44.1% to S$14.2m as operating expenses increased at a faster pace of 10.6%. The main culprit was a 21.4% hike in SMRT’s staff costs to S$119.6m, which formed 40.8% of its topline, versus 35.0% in 3QFY13. For 9MFY14, revenue rose 4.3% to S$874.4m but PATMI slumped 52.8% to S$45.0m. SMRT’s Rail operations (Train and LRT combined) recorded its first ever quarterly loss of S$0.2m in 3QFY14, while its overall fare business (Train, Bus and LRT) suffered a S$9.0m operating loss, in contrast to 3QFY13’s S$7.4m operating profit. In terms of balance sheet strength, SMRT’s net gearing increased from 8.3% as at 31 Dec 2012 to 63.7% as at 31 Dec 2013, largely due to the payment of S$392.7m for 17 trains and operating assets taken over from the LTA. We will provide more updates after the analyst conference call. For now, we place our Hold rating and S$1.30 fair value estimate under review. (Wong Teck Ching Andy)


CDL Hospitality Trusts: 4Q13 boosted by Angsana Velavaru

CDL Hospitality Trusts (CDLHT) reported 4Q13 results that were generally in line with ours and the street’s expectations. 4Q13 revenue rose by 2.8% YoY to S$39.4m and net property income climbed 2.5% YoY to S$36.4m. 4Q13 DPU is 2.92 S cents (up 0.7% YoY), bringing FY13 DPU to 10.97 S cents. RevPAR for CDLHT’s Singapore hotels in 4Q13 had declined 6.0% YoY. For the first 26 days of Jan 2014, RevPAR for CDLHT’s Singapore hotels declined by 0.3% YoY, in-line with our expectations for fairly flat RevPAR change for the industry in 2014. While contributions from the Singapore and Australian hotels continued to be weak, Angsana Velavaru boosted the results, with a recognition of S$5.0m (inclusive of a 11 months variable rent of S$3.0m). We are placing our FV of S$1.84 and Buy rating under review. (Sarah Ong)


CapitaRetail China Trust: 4Q13 results in line

CRCT reported 4Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed 8.9% YoY to S$41.2m, driven by revenue growth at CapitaMall Xizhimen, CapitaMall Wangjing and CapitaMall Saihan. Net property income rose 6.6% to S$25.8m. Distributable income grew 5.6% to S$17.7m. DPU, however, fell 4.3% to 2.20 S cents due to a private placement in Nov 2012. We maintain our BUY rating on CRCT but place our FV of S$1.64 under review pending a meeting with management. (Sarah Ong)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks ended Tue with the best gains in two weeks, as indexes rebounded from heavy losses in the previous three sessions.


- Prices of completed non-landed private homes eased 0.6% for the whole of 2013, compared with a 4.2% increase in 2012, show flash estimates for NUS's Overall Singapore Residential Price Index.


- KrisEnergy yesterday announced its acquisition of a 60% stake in exploration block G3/48 in the Gulf of Thailand from UAE's Mubadala Petroleum.

- Higher interest costs and taxes caused Eu Yan Sang to post a 31% decline in its net profit to S$3.2m for its 2QFY14.


- IPC Corporation almost quadrupled its FY13 net profit to S$18.2m from S$4.8m a year ago as sales from its business hotels and condominium projects in Japan surged.


- Fragrance Group's 4Q13 net profit has almost quadrupled to S$133.7m from S$34.5m a year ago.

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