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Strategy
NAVIGATING SINGAPORE
Prosperity for ASEAN is about getting together as one, with tailwinds from
TPP and OBOR. Singapore will be a key hub.
Banks and property will be long-term winners. Balancing all factors, our top
picks are CAPL, CIT, DBS, SPOST, IHH and THBEV.
Leaning towards long-term trends that will play out for individual stocks as
well; other names we like are CEWL, GLL, HOBEE, IP, MAGIC, TIAN, VMS.
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Singapore Research Team
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED
AT THE END OF THIS REPORT.
If this report is distributed in the United States it is distributed by CIMB Securities (USA), Inc. and is considered
Third-Party Affiliated Research.
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TABLE OF CONTENTS
Expecting a challenging first half in 2016 ....................................................................................... 5
Play the mega-trends: Its not doom and gloom forever ................................................................ 8
Investment implications: Long-term views, balanced by short-term headwinds .......................... 13
Banks: A credit cycle first, then regionalisation benefits .............................................................. 16
Property & REITs: Supply bump, then its all about demand ....................................................... 20
th
Strategy Note
Singapore
Singapore Strategy
Somewhere over the rainbow
Highlighted companies
City Developments
ADD, TP S$10.47, S$7.15 close
Property play on Singapore as a hub. Growing
recurrent rental income and freed-up capital
from Sentosa are added positives. Most
importantly, valuations are very attractive after
steep underperformance in 2015.
DBS Group
ADD, TP S$19.58, S$16.61 close
Banks will benefit from regional trade and
project financing (OBOR projects) as MNCs
expand into ASEAN. DBS, with its government
roots, could be involved more deals. Recent
weakness on concerns on credit quality
throws up value.
IHH Healthcare
ADD, TP S$2.52, S$2.11 close
Ageing population in Singapore and Hong
Kong are great long-term trends for IHH.
Presence in Turkey, India and China provide
exposure to populous, growing markets.
Poor near-term corporate earnings outlook is widely known and reflected in prices. It
is not all doom and gloom. Investing here just needs a longer-term perspective.
The positive mega-trends for Singapore/ASEAN are AEC, OBOR and TPP. These
will fan the winds of prosperity for ASEAN. Singapore will ride on ASEANs coattails.
Banks and property will be long-term winners. Balancing the long term, valuations
and current headwinds, top picks are CAPL, CIT, DBS, SPOST, IHH and THBEV.
Among smaller names, we like CEWL, GLL, HOBEE, IP, MAGIC, TIAN and VMS.
Singapore to act as a bridge for Chinas One Belt, One Road policy
Sector ratings
Sector ratings
OVERWEIGHT
NEUTRAL
UNDERWEIGHT
Financials
Commodities
Consumer
Property
Telcos
Gaming
REITs
Transport
The second notable development is Chinas One Belt, One Road (OBOR) policy. China
wants to fund an infrastructure buildout of countries along the Maritime Silk Road.
Whether the intention is to secure resources, win new friends or export its excess
industrial capacity, Chinas resources cannot be ignored. Singapore will not be a direct
recipient of that buildout but as the only Chinese-speaking country in ASEAN, banks
stand as beneficiaries to facilitate that spending across developing ASEAN.
LEAST PREFERRED
Financials
OW
DBS, OCBC
UOB, SGX
Property
OW
Wing Tai
REITs
OW
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
Capital Goods
UW
SCI, EZI
Commodities
FIRST
Gaming/Health
UW
Comsumer
UW
Silverlake
The third notable trend is the recent headway towards forging the US-led Trans-Pacific
Partnership. Internationally, the TPP will open up opportunities for companies to enter
new markets. In the context of ASEAN, the progressive opening up of markets under
AEC and TPP may attract more US MNCs to this region in search of Asias new low-cost
manufacturing centres in Indochina. Singapore is a useful hub from which US MNCs can
manage supply chains; offices, warehouses, logistics and banks stand as beneficiaries.
[X]
City
Development
DBS
Capitaland
Analyst
IHH
SingPost
Thai
Beverage
AEC, OBOR, TPP will bring prosperity to developing ASEAN, enhance Singapore hub status
Pan Asian exposure will enable the Group to ride on the growth of ASEAN and China
Near-term catalyst include strong residential sales in Vietnam, and a pickup in sales in China
AEC, OBOR, TPP to cement Singapore hub status, City Dev is still the best Singapore proxy
Most attractive factor is valuations, monetisation of Sentosa frees up capital to redeploy
Banks grapple with credit costs near-term, but benefits most long-term on regionalisation
Its government-backed roots makes it best-positioned to fund OBOR inbound FDIs, benefit
from project financing, debt capital markets and eventual REIT listings.
Beneficiary of long-term trend of ageing population in Singapore and Hong Kong
Exposure in young, populous markets of Turkey, India, China provides growth markets
Only exposure to macro trend of preference for e-commerce vs. brick-and-mortar retail
US acquisitions, lowering of ASEAN custom barriers helps SingPost link US and ASEAN
One of the few with a ASEAN platform to ride on the growth of the ASEAN consumer
AEC lowers barriers and raises competition. Having a cash cow to fund that fight is good.
SOURCES: CIMB RESEARCH, COMPANY
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
If this report is distributed in the United States it is distributed by CIMB Securities (USA), Inc. and is considered Third-Party Affiliated Research.
Powered by EFA
KEY CHARTS
ASEAN has reason to cheer beyond its
current gloom
2015
Philippines
Cambodia
Malaysia
Indonesia
Vietnam
Myanmar
Brunei
Thailand
China
South Korea
Singapore
Hong Kong
Japan
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
Trends
China
greying
population
AEC
OBOR
TPP
Implications
IndoChina as new global manufacturing hub, Indonesia to follow
MNCs to shift manufacturing facilities from China to ASEAN
Developing ASEAN grows a middle class
Cross-border ASEAN M&A deals rise.
Supply chain to span across Thailand, Malaysia and Singapore
as custom duties ease; logistics and warehouse to benefit
Singapore SMEs expand to the region. More opportunities but
also more competition
More connectivity in trade and human flow; banks gain from trade
China-backed AIIB to fund developing ASEAN infrastructure
Singapore banks and SWFs has opportunity to act as
intemediaries for Chinese SOE investments
Singapore GLCs morph from shipyard-heavy corporates, to
infrastrcture-heavy
Companies from TPP nations set up ASEAN HQ in Singapore
Singapore office and banks to benefit
TOP PICKS
LEAST PREFERRED
UOB, SGX
Financials
OW
DBS, OCBC
Property
OW
Wing Tai
REITs
OW
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
UW
SCI, EZI
Capital Goods
FIRST
Gaming/Health
UW
Comsumer
UW
Commodities
Silverlake
360
2.5
Title:
Source:
340
2.0
320
300
1.5
280
1.0
260
240
0.5
220
CY17
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
4Q11
3Q11
2Q11
Nov-15
1Q11
0.0
Sep-15
4Q10
Jul-15
3Q10
May-15
2Q10
CY16
1Q10
Mar-15
3Q09
Jan-15
4Q09
CY15
200
CY2013
CY2014
CY2015
CY2016
CY2017
14.6x
14.7x
-4%
-3%
1.5x
3.6%
12.6x
13.2x
31.3x
14.1%
10.2%
3,167
14.4x
14.4x
8%
2%
1.4x
3.5%
12.3x
11.6x
19.1x
15.2%
10.1%
3,365
12.6x
12.7x
-3%
-7%
1.2x
4.0%
12.4x
26.4x
21.8x
15.8%
9.2%
2,876
1.05
12.5x
12.6x
1%
1%
1.1x
4.0%
11.3x
10.7x
11.2x
14.2%
9.1%
2,876
0.96
11.2x
11.3x
11%
12%
1.1x
4.3%
10.5x
8.5x
11.0x
13.1%
9.6%
2,876
0.99
Is Singapore past its peak, with sky-high costs and a unloved, struggling
neighbourhood? Is ASEAN ever going to come back with a vengeance?
Are oil prices going to stay low for long as shale, solar and LNG comes
into play? Are yards going to be idle for a while?
Structural negativ es
Near-term negativ es
> Retail tenants hav e seen the worst of > New DTL and Thom son line train
labour costs pressures.
network
> Falling rents (or lim ited hikes)
> Households in regional ASEAN hav e > Worst of cost pressures from labor
to grapple with rising inflation as
cost and rents, hav e already peaked
currencies spiral down
> Lack of dem and for discretionary
consum ption item s when incom es slow
> Em ergence of Fintechs gnaws on the > Rising NPLs in the region
relev ance of banks in som e aspects
> Slowing loan growth
> O&M activ ities are backed by Middle > Urbanisation trends in ASEAN new
East OPEC production
econom ies - My anm m ar and Vietnam
spurring property m arket and
dem and for infrastrucuture/ utilities
> Terrorism stokes security spending
re
ea
lth
ca
H
os
oo
ds
Tr
an
Lo sp o
gi rt
st
ic
s
iti
es
Ca
pi
ta
lG
m
od
Co
m
Structural positiv es
Ba
nk
s
Te
lc
Near-term positiv es
> Structural changes to the Singapore > High incom ing supply of warehouse
econom y as it m ov es up the v alue-add and factory space
chain
> More regulated than other property
segm ents
Ga
m
in
Co
n
su
m
er
In
du
st
ria
ot
el
s
Re
ta
pr il
op
er
ty
Re
si
de
nt
ia
l
ffi
c
Ec
on
om
Brunei
Singapore
Laos
Cambodia
Malaysia
Myanmar
Thailand
Vietnam
Philippines
Indonesia
Yangon
Phnom Ponh
Dhaka
Vientiane
Hanoi
Ho Chi Minh City
Mumbai
Cebu
Jakarta
Manila
Chennai
Shenzhen
Kuala Lumpur
Bangkok
Guangzhou
Bangalore
Shanghai
Beijing
Malaysia
20,000
15,000
Thailand
Indonesia
10,000
5,000
Laos
Myanmar
Cambodia
Philippines
Vietnam
Monthly base
salary (US$)
100
200
300
400
500
We acknowledge that ASEAN has always been a diverse pot of countries that
are difficult to integrate. However, some notable trends have the potential to
combine to morph into tailwinds of better integration ahead, namely:
China reaching the tail-end of its demographic sweet spot. The supply of
cheap, abundant labour entering its workforce is coming to an end.
The availability of low-cost labor in Myanmar, Cambodia and Laos, plus the
fact that these previously-closed economies are opening to the global
market. Indochina stands to take over as the manufacturing region of Asia.
The availability of capital to spur the development of infrastructure to aid the
connectivity of these countries, particularly with One Belt, One Road. The
lack of capital had previously been an important limitation for developing
countries in their desire to step up to service global markets.
The availability of capital from corporates in other ASEAN markets investing
in the Mekong region as they look to expand from dominant home market
positions to capitalise on new growth markets.
Indonesias likely fading resistance to free markets as: 1) the US courts it to
join TPP, and 2) Indonesia realises the need to build up a manufacturing
sector (on top of infrastructure spending) in an environment where the
demand of its key exports looks flaccid and prices of coal, crude oil, palm oil,
tin and copper look likely to stay low.
Figure 9: Most ASEAN economies experiencing the
demographic sweet spot
Laos
2015
Indonesia
Title:
Source:
Thailand
$365,966
Philippines
Cambodia
Malaysia
Malaysia
$878,043
(37.79%)
(15.75%)
Please fill in the values above to have them entered in your report
$305,033
(13.13%)
Indonesia
Singapore
Vietnam
Myanmar
Philippines
Brunei
Thailand
Vietnam
$274,702
$250,182
(11.82%)
(10.77%)
$155,820 (6.71%)
China
South Korea
Singapore
Myanmar
$53,140 (2.29%)
Brunei
$16,954 (1.93%)
Cambodia
$14,038 (1.60%)
Hong Kong
Japan
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
Laos
$9,418 (1.07%)
In our opinion, the changing winds are: 1) China has become expensive, 2)
Myanmar is entering the global economy and Vietnam and the Philippines are
trying to become more market-friendly, and 3) the lack of capital for
infrastructure development (in Indochina) is dissipating as a limitation to
9
development, with AEC, OBOR and TPP attracting FDIs from external
countries. We will touch on this point next. As populous Indochina neighbours
enable Southeast Asia to take up Chinas mantle as the factory of the world in
the next 10-15 years, Indonesia (255m population) also has to move towards
embracing open markets or risk being left behind. An increasingly integrated
ASEAN, with Indonesias participation, is an important tailwind for the region.
Chinas One Belt, One Road promises free trade. From the perspective of
investee nations, it means cheap capital. China hopes that it can ultimately
create a broad free trade zone across Asia, parts of Africa and Europe. This is
partly to counter US-driven trade agreements, such as the Trans Pacific
Partnership (TPP). We think the geopolitical reasons are as important as the
st
economic reasons. The 21 century is Chinas century. For a country to
establish itself as a global leader, it needs both hard power (economic might,
military prowess) and soft power (friends, connectivity, well-accepted culture).
Chinas hard power is on the rise but the same cannot be said for its soft power.
10
We believe OBOR is one of Chinas means to finesse its raw economic might
to garner more global acceptance.
We move away from looking at One Belt, One Road from Chinas perspective
and delve further into Singapores and ASEANs perspective. As China makes
investment into ASEAN, what is the value-add of Singapore companies? What
are the implications for Singapore as a country and ASEAN?
Country
Assets (US$Billion)
China
1,534.7
United Arab Emirates
1,214.8
Norway
824.9
Saudi Arabia
673.9
Kuwait
592.0
Singapore
537.6
Hong Kong
417.9
Qatar
256.0
Kazakhstan
156.5
Russia
152.2
United States
142.4
Australia
95.3
South Korea
84.7
Libya
66.0
Iran
62.0
Algeria
50.0
Malaysia
41.6
Brunei
40.0
Azerbaijan
37.3
France
25.5
11
12
13
Figure 16: Singapore office has a supply peak but new supply
growth will be muted beyond 2017
sf
4000000
2,250
3500000
2,000
100%
Title:
Source:
95%
1,750
3000000
Please fill in the values above to have them entered in your rep
1,500
2500000
90%
1,250
85%
2000000
1,000
1500000
750
80%
500
1000000
75%
250
500000
70%
0
2015
2016
CBD
2017
CBD Fringe
2018
2019
Decentralised
Supply
Demand
Occupancy
% Urbanisation
100
90
2015
80.4
Oceania
2030
83.2
80
%
100
Title:
Source:
0.8
N. America
3.2
S. America
3.3
60
51.3
50
Europe
55.8
38.2
40
30.8
30
#VALUE!
60
6.0
53
47
50
9.0
40
World
11.1
30
20
10
East Asia
29
17.1
19
20
High-income Middle-income
countries
countries
ASEAN
Low-income
countries
69
65
70
Central Asia
ASEAN
2030
79
4.6
West Asia
47.6
Title:
2010
Source:
90
70
59.1
19.2
10
Sub-saharan
Africa
19.9
0.0
5.0
10.0
15.0
20.0
0
25.0
ASEAN
China
India
LatAm
14
25,000
Singapore
20,000
15,000
Consumer
Durables
Brunei
Malay sia
10,000
Thailand
Consumer
Staples
Indonesia
5,000 Philippines
Laos Vietnam
My anmar
Cambodia
0
0
10,000 20,000
30,000
40,000
50,000
60,000
70,000
80,000
Short-term headwinds
We do recognise that not everyone can focus on a long-term view of sectors in
order to make their investment decisions. At the end of the day, short-term
headwinds, whether we are at the trough of the earnings cycle or if things will
get worse from the latest quarters showing still bear weight. What we aim to
achieve in our 2016 outlook is to stoke some thinking about the long-term
potential of AEC, OBOR and TPP, and balance that against known short-term
headwinds. Our thinking on these longer-term potential and each sectors own
short-term pain points, as follows:15
Near-term negativ es
Near-term positiv es
> Em ergence of Fintechs gnaws on the > Rising NPLs in the region
relev ance of banks in som e aspects
> Slowing loan growth
Banks
Structural positiv es
> AEC and OBOR giv e rise to the
opportunity for banks to fund crossborder inv estm ents
> Wealth m anagem ent to benefit from
relaxation of capital controls in China
SOURCE: CIMB RESEARCH, COMPANY
2.0%
2016F
Title:
Source:
2017F
2008A
2009A
0.25%
0.40%
0.32%
1.20%
Please
fill in the
values above
to have0.68%
them entered
in your report
OCBC
0.23%
0.38%
0.27%
0.56%
0.53%
UOB
0.33%
0.65%
0.46%
0.81%
1.13%
DBS
0.24%
0.39%
0.31%
0.56%
0.99%
OCBC
0.22%
0.38%
0.27%
0.23%
0.33%
UOB
0.32%
0.64%
0.45%
0.61%
1.12%
DBS
692
1,169
971
841
1,552
OCBC
468
845
632
447
429
UOB
670
1,369
1,006
807
1,121
SP + GP (% of loans)
1.0%
0.5%
DBS
OCBC
UOB
Commodities,
developing
ASEAN,
developing Asia
Is exposure big?
Exposure to commodities
9%
8%
8%
20
7%
6%
5%
15
7%
6%
15
5%
10
13
10
2%
4%
21
3%
5
15
16
0%
DBS
OCBC
UOB
3%
2%
1%
0
9%
8%
7%
20
4%
22
8%
7%
6%
5%
10
25
1%
0
0%
DBS
OCBC
UOB
16
30%
Title:
Source:
25%
Please fill in the values above to have them entered in your report
20%
15%
10%
5%
0%
DBS
OCBC
UOB
Figure 31: NIM expansion should continue with a Fed rate hike
and rise in 3M SIBOR/SOR
%
1.6
1.60
1.4
1.55
4.0%
2.6%
3.5%
Title:
Source:
3.0%
2.4%
1.50
1.2
1.45
1.0
2.5%
1.40
2.2%
0.8
1.35
2.0%
1.30
1.5%
0.6
0.4
1.25
0.2
2.0%
1.0%
1.8%
1.20
0.5%
1.15
-0.2
1.10
USDSGD (RHS)
SORF3M Index
0.0%
1.6%
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
0.0
SIBF3M Index
DBS (RHS)
OCBC (RHS)
UOB (RHS)
related and loan-related fees and working capital and hedging needs. In
terms of exposure, DBS has the biggest proportion of Greater China loans
(DBS: 35%, OCBC: 28%, UOB: 12%) while UOB has the biggest proportion
of loans to South and Southeast Asia (DBS: 10%, OCBC: 21%, UOB: 22%).
Figure 32: Loans by geography, as of 9M15 (S$m)
Loans by country
DBS
OCBC
UOB
PBT by country
133,154
46.1%
Malaysia
86,883
40.9%
114,260
56.2%
Singapore
27,841
13.1%
23,658
11.6%
Malaysia
11,151
5.5%
Thailand
Indonesia
Thailand
Indonesia
16,097
7.6%
10,796
5.3%
ASEAN ex-SG
27,381
9.5%
43,938
20.7%
45,605
22.4%
ASEAN ex-SG
Greater China
101,762
35.2%
59,477
28.0%
25,064
12.3%
Greater China
26,452
9.2%
22,384
10.5%
18,300
9.0%
DBS
OCBC
UOB
2,684
67.2%
2,006
54.9%
1,762
60.3%
616
16.9%
404
13.8%
145
5.0%
143
3.9%
45
1.5%
-0.1%
759
20.8%
594
20.3%
1,240
31.0%
741
20.3%
291
10.0%
73
1.8%
147
4.0%
275
9.4%
(2)
Macro tailwind #2: Positioned to capture wealth and fund flows out of
China with the relaxation of capital controls
Singapore has built up a reputation as a wealth management hub, with a
stable political system and ease of capital flows, among other advantages.
As China loosens capital controls and allows its citizens to invest their
wealth more freely overseas, we think the Singapore banks will benefit from
increased demand for wealth management services. In this respect, we
think OCBCs Greater China presence through Wing Hang Bank will
enhance its ability to capture cross-border wealth flows from Greater China
to ASEAN.
Investment implications
We expect a medium-term share price recovery for banks to be driven by a
mean reversion of P/BV multiples from the current 1.0x (1 s.d. below mean) to
its ten-year historical mean of 1.3x in 2-3 years. This will happen when NPL
concerns peak.
Figure 34: Singapore banks are trading at 1.0x CY16 P/BV, 1 s.d. below mean
2.10
1.90
1.70
1.50
1.30
1.10
0.90
0.70
P/BV (x)
Mean
-1 sd
+1 sd
At the current 1.0x CY16 P/BV, we think the negatives of higher NPLs and
slower growth in FY16 have been largely priced in. We take comfort that even
with: 1) aggressive provisioning assumptions, 2) expectations of 1-5% loan
growth, and 3) little non-NII growth in FY16, the banks can still achieve ROEs
that exceed cost of equity, which makes them good value at 1.0x P/BV.
Beyond the softer near-term outlook, we think the Singapore banks will be
beneficiaries of Chinas One Belt, One Road policy given their ability to capture
onshore-offshore loan demand with their diversified presence in both ASEAN
and China. This, together with the AEC, should drive loan demand and the
related fees in the medium term. Wealth management is also another key
beneficiary of liberalisation policies in China. With banks stronger earnings
growth and better ROEs, we think they deserve to trade at P/BV multiples
18
closer to the 10-year historical mean of 1.3x in the medium term. Among the
three banks, UOB looks to be the best bet on the ASEAN integration trend. We
view it to be in a good position to fund Chinas OBOR-led investments;
unfortunately, its ASEAN exposure is precisely what poses challenges as NPLs
in ASEAN show up in 2016. DBS can benefit most from its relationships with
government-related vehicles and government-linked companies, funding the
Singapore companies outbound capex and US companies heading to the
region; its downside risk is its oil and gas exposure. On balance, our top bank
pick switches from OCBC to DBS.
Figure 35: Banks near-term and longer-term consideration factors
Structural negativ es
Near-term negativ es
Near-term positiv es
OCBC
United
Ov erseas
Bank
Singapore
Ex change
Structural positiv es
> AEC and OBOR will create
opportunities to finance cross-border
inv estm ents and earn related fees
> Dem and for WM serv ices as China
loosens capital controls
> AEC and OBOR will create
opportunities to finance cross-border
inv estm ents and earn related fees
> Dem and for WM serv ices as China
loosens capital controls
> AEC and OBOR will create
opportunities to finance cross-border
inv estm ents and earn related fees
> Dem and for WM serv ices with rising
affluence in ASEAN
19
Property & REITs: Supply bump, then its all about demand
Figure 36: Property & REITs near-term and longer-term consideration factors
Office
Structural negativ es
Near-term negativ es
> Retail tenants hav e seen the worst of > New DTL and Thom son line train
labour costs pressures.
network
> Falling rents (or lim ited hikes)
Retail
property
Hotels
Industrial
Near-term positiv es
> Structural changes to the Singapore > High incom ing supply of warehouse
econom y as it m ov es up the v alue-add and factory space
chain
> More regulated than other property
segm ents
Structural positiv es
> Benefit from hub status; free trade
deals like TPP and AEC, entrenches
Singapore attraction as a ASEAN hub
20
180
160
Title:
Source:
5000
140
4000
120
100
3000
80
2000
60
40
1000
20
0
Jun-07
0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
URA PPI
HDB Resale
Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
Primary
Secondary
Jun-13
Jun-14
Jun-15
100%
Title:
Source:
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1997
1999
2001
2003
2005
HH Debt to GDP
2007
2009
2011
2013
1Q15
60000
180
160
50000
12
Title:
Source:
10
140
40000
120
100
30000
6
80
20000
60
40
10000
2
20
0
2015
2016
CCR
2017
RCR
2018
OCR
EC
2019
0
0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
>2019
HDB
URA PPI
Office
Near-term headwinds #1: Lumpy completions over the next 2 years.
The key headwind to the office sector is oversupply, with an estimated 3.9m
sf of new inventory completing in 2016, or equivalent to 3-4 years worth of
demand. Pre-commitment rates have remained low and this will drag on
landlords pricing power. An estimated 49% of 2016 supply comes from the
Marine One building, which has yet to announce any takers for its office
space. Meanwhile, Guocolands strategy for Tanjong Pagar Centre is likely
to maintain rents at the cost of short-term occupancy. We expect the
availability of supply will continue to pose a drag on the rental outlook. We
think rents can retrace 15-20% over the next 2 years.
Near-term headwinds #2: Low GDP growth implies reduced demand
for office space. Demand for office space is closely correlated to GDP
growth. With near-term economic growth expected to remain below average,
the take-up of office space is likely to remain modest and this will mean a
longer gestation period for incoming office inventory. As a result, we think
21
islandwide occupancy could dip to closer to the 85% from the present 90%
before the additional space is properly absorbed.
Near-term positive #1: Non-traditional end users emerge to take up
some slack. While traditional office space end users, such as financial
institutions, have tempered their appetites, new business sectors, such as
commodities, media, legal and other financial services, have emerged and
provided a new source of demand. In addition, cap rates are unlikely to
expand, with interest rates to remain lower for longer. As such, capital
values are likely to remain stable and this will underpin book NAVs of
developers and S-REITs. Current cap rates for Grade-A offices in the CBD
is at 3.75%, its lowest in this cycle.
Figure 43: Office rents by segment
16
4000000
14
3500000
12
3000000
10
2500000
2000000
1500000
1000000
500000
0
2004Q1
Title:
Source:
2005Q3
2007Q1
2008Q3
2010Q1
2011Q3
2013Q1
2014Q3
2015
2016
CBD
2017
CBD Fringe
2018
2019
Decentralised
msf
7
8%
Title:
Source:
95%
7%
90%
6%
5%
85%
4%
2
80%
3%
2%
75%
1%
-1
-2
0%
70%
89
91
93
95
97
Annual supply
99
01
03
05
07
Annual demand
09
11
13
15F
1980
17F
1983
1986
1989
1992
1995
Current yields
Occupancy rate
1998
2001
2004
2007
2010
2013
Passing yields
Retail
Near-term headwinds #1: Slow retail sales from strong S$. Retail sales
in Singapore have been growing by low single-digits as the strong S$
dampen tourist arrivals and domestic consumption is limited by higher
household leverage. Tourist arrivals, particularly from Indonesia, Malaysia
and Australia, are down yoy.
Near-term headwinds #2: Boosting sales efficiency may mean more
consolidation. While the last of the changes in the foreign worker labour
ratio put in place in July 15 and the foreign worker levy hike is stabilising in
July 16, retailers are now focusing on growing sales efficiency. This may
mean some near-term consolidation activities.
Near-term positive #1: Lower-than-average incoming supply. New
incoming supply is averaging 0.7m sf p.a., which is lower than the annual
average of the past few years as the bulk of supply had been digested in
2014. In addition, most of the new inventory is scattered across many
locations and is not concentrated on one region. This should help bolster
retail sales performance. As such, we expect rents to continue tracking up
but by a very modest quantum annually.
22
DRC
60%
$1,400
$1,200
50%
$450
$450
$1,000
Title:
Source:
40%
$500
$300
30%
$600
$360/
$460
20%
$160/
$260
10%
$600/
$700
$600/
$800
$400/
$500
$400/
$550
$400/
$600
$300/
$400
$300/
$420
$300/
$450
1-Jul-13
1-Jul-15
1-Jul-16
$300/
$400
$180/
$280
$240/
$340
0%
$800
$600
$400
$200
$-
1-Jul-10
1-Jul-11
1-Jul-12
Tier 1
Tier 2
Tier 3
sq ft
1,600,000
Title:
Source:
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2015
2016
2017
2018
Industrial
Near-term headwind #1: Manufacturing continues to be weak. We
expect demand for factories to be affected by a slowdown in manufacturing
activities. Singapores manufacturing sector had two consecutive quarters of
contraction, declining by 6% yoy and 3.6% qoq in 3Q15. Meanwhile, factory
supply is projected to rise by 4.3% in 2016 (2015F: 3%), with supply coming
from new strata-titled and JTC-led projects. Rents dived by 10% yoy to
c.S$1.90 psf/mth in 2015, with occupancies coming down by 0.5% pts to
91%. Hence, we think rents could dip by 5-10% in 2016.
Near-term positive #1: Bullish on business parks. Given the absence of
supply post 2016, we are most bullish on business parks. Business park
supply growth is expected to slide down to 8.2% in 2016 (2015F: 9.2%),
with no further supply in 2017. Although headline pre-commitment appears
lacklustre at 32%, our channel checks suggest that Mapletree Business City
Phase 2 (MBC 2) which accounts for c.60% of the incoming 2.1m sq m
supply in 2016 has been progressively securing tenants. The park has
already secured two anchor tenants, Google (c.25,000 sq m) and Covidien
(c.520,000 sq m). With average occupancies ticking up to 84.2% in 2015
(2014: 83.6%), rents have risen by 1% yoy to c.S$4.2 psf. We believe that
the rise (+3-5%) could continue in 2017 due to a lack of new supply.
23
(000 sqm)
25,000
100%
20,000
95%
15,000
90%
Title:
Source:
12,000
100%
10,000
95%
Please fill in the values above to have them entered in your rep
8,000
90%
6,000
10,000
85%
85%
4,000
5,000
80%
75%
Supply
Demand
80%
2,000
75%
Supply
Occupancy
Demand
Occupancy
(000 sqm)
(000 sqm)
10,000
100%
Title:
Source:
2,250
2,000
8,000
95%
6,000
90%
100%
95%
1,750
Please fill in the values above to have them entered in your rep
1,500
90%
1,250
85%
1,000
4,000
85%
750
2,000
80%
500
80%
75%
250
75%
Supply
Demand
70%
Occupancy
Supply
Demand
Occupancy
4.16
4.00
3.50
3.00
2.50
2.03
2.00
1.91
1.50
1.00
0.50
2000
2001
2002
2003
2004
2005
Factory
2006
2007
2008
Warehouse
2009
2010
2011
2012
2013
2014 2015F
Business park
24
Hospitality
Near-term headwinds #1: watch the supply bump in 4Q15. On the back
of high upcoming supply coupled with stagnant tourist arrivals, we believe
that hotel owners may have to lower room rates further to maintain their
market shares. 9M15 RevPAR dropped by 6% yoy to S$208 while
occupancies dipped 0.7% pts yoy to 85%. Additionally, we believe that the
full impact of the new supply of 4,361 rooms will only be felt in 4Q15 with
the respective openings of Hotel Boss (1,500 rooms targeting the mid-tier
segment) and The South Beach (654 rooms targeting the upscale segment).
Together, these two hotels account for 50% of the upcoming supply for
2015. We only expect the competitive market dynamics to ease post 2017
as the last hotel GLS site was awarded in early-2014 and none since then.
For 2016, we project 3,899 new rooms (+6.3% growth).
Near-term headwinds #2: Regional tourism affected by strong S$. On
the demand side, regional tourism has been affected by weaker FX while
we have observed weaker corporate demand from select industries, such
as electronics manufacturing, oil & gas and banks. Given the sharp
appreciation of S$ vs. regional currencies, there was a drop-off in visitor
arrivals, particularly from Australia (-7% yoy) and Indonesia (-11% yoy).
Chinese visitors (+19% yoy) have made up for the slower arrivals.
Figure 56: 9M15 RevPAR dropped by 6% yoy to S$208 while
occupancies dipped 0.7% pts yoy to 85%
(S$)
(%)
('m)
250.0
100.0
16.0
90.0
Title:
Source:
14.0
200.0
80.0
150.0
70.0
12.0
60.0
10.0
50.0
100.0
8.0
40.0
6.0
30.0
50.0
4.0
10.0
2.0
0.0
1Q01
3Q01
1Q02
3Q02
1Q03
3Q03
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
0.0
20.0
RevPAR
Occupancy (RHS)
Figure 59: Top 10 inbound markets: Yoy change for YTD Aug
2015 visitors from North Asia offset drop in ASEAN
25
Figure 60: The upcoming supply of hotel rooms in Singapore is concentrated in the mid-tier segment
Nam e of Hotel
Gallery Hotel
Sw isstel Merchant Court
Genting Singapore
Park Hotel Alexandra
Hotel Chancellor @ Orchard
D'Resort@ Dow ntow n East
Aqueen Hotel Paya Lebar
Hotel Vagabond Singapore
The South Beach *
The Patina Capitol Singapore
Hotel Clover @ 7 HK St
Sofitel Sentosa Resort and Spa
Villa Samadhi
Hotel Boss
Hotel Grand Central
Oasia Dow ntow n Hotel
InterContinental Singapore Robertson
Quay (Gallery Hotel after refurbishment)
Clemont Hotel (Tanjong Pagar Centre)
Sw isstel Merchant Court
Laguna Dusit Thani
No. of
Rm s
223
150
557
442
488
397
162
41
Location
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Mid-Tier
Mid-Tier
Economy
Upscale/Luxury
City Centre
City Centre
Outside City Centre
Outside City Centre
City Centre
Outside City Centre
Outside City Centre
Outside City Centre
654
Upscale/Luxury
City Centre
157
22
30
20
1,500
264
314
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Mid-Tier
Mid-Tier
Upscale/Luxury
City Centre
City Centre
Sentosa
Outside City Centre
City Centre
City Centre
City Centre
Expected
Opening
Closed
Closed
Opened
Opened
Opened
Opened
Opened
Opened
Partially
Opened
4Q 2015
4Q 2015
4Q 2015
4Q 2015
4Q 2015
4Q 2015
2016
225
Upscale/Luxury
City Centre
2016
202
150
200
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
City Centre
City Centre
Outside City Centre
2016
2016
2016
Nam e of Hotel
Hotel Indigo Singapore Katong
Mercure Singapore Middle Road
M Social
Holiday Inn Express Singapore Katong
Park Hotel Farrer Park
Crow ne Plaza Changi Airport
(extension)
OASIA West Residences
Premier Inn Singapore
The Warehouse Hotel
Ibis Styles
Aqueen Hotel Geylang
Aqueen Hotel Little India
Aqueen Hotel Lavender (Additional
Rooms)
Andaz Singapore (DUO Project)
Novotel Singapore on Stevens
Somerset Grand Gairnhill Singapore
Redevelopment
The Murray Hotel
Ibis Singapore on Stevens
Amoy (Phase 2) (Additional Rooms)
Courtyard Marriott at Novena
YOTEL Orchard Road
No. of
Rm s
131
400
293
451
300
Expected
Opening
Outside City Centre
2016
City Centre
2016
City Centre
2016
Outside City Centre
2016
Outside City Centre
2016
Location
243
Mid-Tier
2016
116
300
37
298
100
70
Mid-Tier
Economy
Economy
Economy
Economy
Economy
2016
2016
2016
2016
2016
2016
69
Economy
2016
342
259
Upscale/Luxury
Upscale/Luxury
City Centre
City Centre
2017
2017
220
Upscale/Luxury
City Centre
2017
160
528
60
250
600
Upscale/Luxury
Mid-Tier
Mid-Tier
Mid-Tier
Economy
City Centre
City Centre
City Centre
Outside City Centre
City Centre
2017
2017
2017
2017
2017
Year
No. of Rms
Upscale/Luxury
Mid-Tier
Economy
2015
4,361
1,550
36%
2,649
61%
162
4%
2016
3,899
1,222
31%
1,803
46%
874
22%
2017
2,419
981
41%
838
35%
600
25%
10,679
3,753
35%
5,290
50%
1,636
15%
Investment implications
We think short-term concerns of oversupply outweigh in the office, hotel and
residential segments. Essentially, there is 8-9m sf of office space (10% of total
stock) to be completed over 2015-19, the bulk of which will come onstream in
2016-17. For the hotel sector, there are 10,530 keys (18% of total stock) to be
completed over the same period, of which most will be largely operational by
2017. The bulk of future private home inventory of 64,177 units (19.9% of total
private stock) to be completed over 2015-19 is also projected to come into the
market by 2017. This will drag on office rents, hotel room rates and private
home prices. We expect office rents to decline by 10-15% over the next 18
months while residential prices could track down by 5-10% annually over the
next two years. Hence, we would prefer developers with diversified business
models that can weather the short-term challenging environment while being
well placed to benefit from the longer-term structural positives in the sector.
We expect a share price recovery for property developers to be driven by two
catalysts: 1) a recovery in valuations from the present -1 s.d. discount to RNAV
to an average discount to mean as outlook on prices improve, and 2) sector
EPS growth to be more meaningful, estimated from a -7.3% in CY16 to 17.3%
in CY17, with the inclusion of overseas contributions, which are only
recognised wholly on completion.
Figure 61: Historical sector discount to RNAV
3.0
160
2.5
1.6
Title:
Source:
1.4
140
120
2.0
1.2
100
0.8
1.5
80
0.6
60
1.0
0.4
40
0.5
0.2
20
0
0.0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
0.0
J-90 F-92 O-93 J-95 F-97 O-98 J-00 F-02 O-03 J-05 F-07 O-08 J-10 F-12 O-13 J-15
P/RNAV (RHS)
27
2.5
25%
4.0
20%
3.5
1.5
15%
3.0
10%
2.5
0.5
5%
2.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0%
4.5
43%
42%
42%
41%
40%
39%
39%
38%
38%
37%
37%
37%
36%
36%
36%
35%
Title:
Source:
34%
34%
33%
30%
31%
35%
30%
3.5
5.0
FEHT
5.5
30%
40%
MINT
45%
28%
4.5
6.0
CCT
%
6.5
26%
KREIT
OUEHT
OUECT
MAGIC
ART
FHT
MLT
CACHE
AREIT
CREIT
SUN
CDREIT
MCT
FCOT
SGREIT
LMRT
CMT
FCT
FREIT
FIRST
SPHREIT
LT ave: 4.1%
Near-term negativ es
CapitaLand
Global
ov erbuilding in the m edium term
Logistic
Properties
> Dwindling low cost landbank in
Singapore
City Dev
> Australia could be a drag if m acro- > Gearing of 0.83 x is higher than
Frasers
prudential m easures are im plem ented industry av erage
Centrepoint to cool the residential m arket
Ltd
> No landbank in Singapore
Guocoland
Near-term positiv es
Structural positiv es
> Unlaunched dev elopm ents in China > Launch of its dev elopm ent projects
in China only from early 2 01 6
Wing Tai
Holdings
Ho Bee
Land
> strong Rev Par growth driv en by the > globalization and increasing num ber
group's on-going refurbishm ent and
of v isitors from Asia
rebranding program m e.
> potential group restruturing and
m onetisation of non-core assets.
GL Limited
28
Near-term negativ es
> Retail spending im pacted by rise of e- > Retailers' rising operating cost and
com m erce and online shopping
higher occupancy cost of m alls v s
peers lim its ability to raise rents
CapitaLand
significantly
Mall Trust
> Reduced reliance on m anufacturing > Large incom ing supply of industrial
in Singapore m ay im pact dem and for space to drag on rental outlook in
light industrial space
Singapore
Ascendas
REIT
Suntec
REIT
> Retail spending im pacted by rise of e- > Lower than projected av erage rent
com m erce and online shopping
from Suntec Mall post AEI
> Ov ersupply of office space would
dam ped rental outlook ov er the next 2
y ears
> The state lease for Bugis Village
CapitaLand
could be term inated in 2 01 9
Comm
Trust
Keppel
REIT
Mapletree
Comm
Trust
Mapletree
Industrial
Trust
Mapletree
Greater
China
Mapletree
Logistics
Trust
SPH REIT
Ascott
Residence
Trust
Frasers
Centrept
Trust
Starhill
Global
REIT
Near-term positiv es
Structural positiv es
> Retail spending im pacted by rise of e- > Slowdown in tourist arriv als has
com m erce and online shopping
also affected shopper traffic at
Viv ov ity
> Reduced reliance on m anufacturing > Rising cost pressures could dam pen
in Singapore m ay im pact dem and for NPI m argin
light industrial space
> Factory m arket is subdued; av erage
rents for 2 01 5 hav e fallen by c.1 0%
y oy
> Reduced reliance on m anufacturing > Mixed im pact from conv ersion of
in Singapore m ay im pact dem and for single-user asset to m ulti-tenanted
light industrial space
buildings
> Strong branding of Paragon as a goto m all along Orchard Rd belt which
has offerings for both local shoppers
and tourists
> Recently opened Seletar Mall
prov ides a potential acquisition
opportunity when stabilised
> Key m arkets showed im prov em ent > Well-div ersified hospitality exposure
> Stable incom e from m aster lease and > Com petition could ease post-2 01 7 as
m inim um guarantees
the last hotel GLS site was awarded in
early -2 01 4
> Retail spending im pacted by rise of e- > Potential AEI of Northpoint could
com m erce and online shopping
m ean som e near term earnings
v olatility
> Lower occupancy cost v s peers could > Resilient Singapore-centric portfolio
m ean higher ability to grow rents
of resilient suburban shopping m alls
> Strong sponsor FCL with a pipeline of
quality assets that could be acquired
when com pleted and stabilised
29
Telcos
Structural negativ es
Near-term negativ es
Near-term positiv es
> Fixed Broadband com petition
stabilising
> Telcos will continue to gradually
m anage handset subsidies lower
Structural positiv es
> Mobile Data usage growth on richer
content, faster networks & new use
cases
> Expansion into adjacent biz, e.g.
digital adv ertising, IoT/M2 M, Big
Data
SOURCE: CIMB RESEARCH, COMPANY
Spectrum band
New MNO
spectrum setaside
Lot/package size
700 MHz: 2 x 10 MHz
900 MHz: 2 x 10 MHz
2.3 GHz: 20 MHz
(S$ m)
(%)
1,200
4.5
Reserve price
4.0
1,000
3.5
12-16 years
12-16 years
800
3.0
2.5
600
700 MHz
900 MHz
EGSM in
900MHz
Spectrum
right duration
2 x 5 MHz
3-5 years
2.0
400
1.5
1.0
200
2.3 GHz
2.5 GHz
0.5
5 MHz
12-16 years
0.0
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
Growth yoy
30
(S$)
(%)
75.0
50
Title:
Source:
45
70.0
40
Please fill in the values above to have them entered in your report
35
65.0
30
60.0
25
20
55.0
15
10
50.0
45.0
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
1Q13
3Q15
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
SOURCE: STARHUB
2Q15
3Q15
SOURCE: STARHUB
(TB)
(%)
35,000
45.0
(US$ bn)
250.0
40.0
30,000
(%)
80.0
Title:
Source:
70.1
65.9
70.0
59.4
200.0
35.0
60.0
25,000
30.0
50.0
150.0
20,000
25.0
15,000
20.0
40.2
40.0
29.4
100.0
20.5
15.0
16.5
16.0
10,000
7.8
10.0
3.7
5,000
30.0
20.0
11.9
50.0
10.0
24.1
26.8
5.0
0.0
0
0.0
1Q13
2Q13
3Q13
4Q13
1Q14
Data traffic
2Q14
3Q14
4Q14
1Q15
0.0
2013
2Q15
2014
2015F
2016F
Mobile ad spending
Growth yoy
2017F
2018F
2019F
as % of digital ad spending
and the emergence of new use cases (e.g. health monitoring, connected
cars). Once voice/SMS/IDD (prepaid) and roaming revenues have declined
to a relatively small percentage of total mobile revenue, then the positive
revenue impact of growing data usage will become more apparent.
Macro tailwind #2: Evolution of incumbents
Besides traditional mobile, Pay-TV and fixed broadband services, we expect
the Singapore telcos to expand into adjacent businesses over the longer
term. These include mobile/digital advertising, Internet-of-Things/Machineto-Machine solutions and monetising Big Data insights. That said, these
businesses are nascent and it is difficult to predict how much these can
contribute to revenue in 3-5 years time.
Figure 74: Big 3 mobile revenue to drop 10.5% across 2016-20
Figure 75: 10-year treasury yields rising again since Jan 2015
(%)
(S$ m)
4,400
4.0
4,200
Title:
Source:
3.5
Please fill in the values above to have them entered in your report
4,000
3.0
3,800
2.5
3,600
2.0
3,400
1.5
3,200
1.0
Jan-09
3,000
2013
2014
2015F
2016F
2017F
2018F
2019F
2020F
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
SOURCE: BLOOMBERG
Investment implications
Share prices for Singapore telcos have largely de-rated in 2015 on the back of
concerns over the potential entry of a fourth mobile operator. While FY16
EV/OpFCF (13.4x) and EV/EBITDA (8.4x) multiples have come down, they are
now in line with the regional average (14.0x and 8.1x, respectively). FY16-17
dividend yields of 5.8-6.0% are higher than average (3.9-4.6%), which are
necessary to compensate investors for the medium-term earnings risk.
Assuming the spectrum auction in 1H16 sees a fourth mobile license awarded,
we believe Singapore telco share prices could see valuation multiples drift
lower. If the spectrum auction does not result in the entrance of a fourth mobile
operator, we expect the sector valuation multiples to bounce up as the market
has largely priced in the scenario of more intense competition in the mediumto-long term. Prior to the market factoring in these bearish expectations,
Singapore telcos were trading at 1-year forward EV/OpFCF and EV/EBITDA of
about 15x and 10x, respectively, while dividend yields were c.4-5%.
Figure 76: Telcos stock-specific near-term and longer-term consideration factors
SingTel
Starhub
M1 Limited
Structural negativ es
Near-term negativ es
Near-term positiv es
>
>
>
>
Structural positiv es
32
Near-term negativ es
Near-term positiv es
Structural positiv es
> Long-term av iation dem and growth
from ASEAN, India and China strong
> Container shipping consolidation
could lim it destructiv e com petition
> Bus/rail m ov es to an asset light
m odel with im pov ed m argins
SOURCE: CIMB RESEARCH, COMPANY
2,500
2010
2011
2012
2013
2014
Apr 11 - Mar 12
2015
12.0
2,000
11.5
1,500
Apr 12 - Mar 13
11.0
Apr 13 - Mar 14
Apr 14 - Mar 15
10.5
1,000
Apr 15 - Mar 16
10.0
500
9.5
0
9.0
J
Ap r
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
1400
300
1200
1000
500
60
71
79
427
453
481
515
540
551
562
574
379
FY10
FY11
FY12
FY13
FY14F
FY15F
FY16F
FY17F
FY18F
LRT
50
2.5%
0.0%
DTL
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q10
0
NEL
5.0%
1Q12
200
100
4Q11
52
7.5%
3Q11
400
150
90
2Q11
90
10.0%
1Q11
90
200
4Q10
220
63
87
600
15.0%
12.5%
3Q10
70
90
270
launch of
GrabCar
250
2Q10
800
launch of
UberX
launch of
UberBlack
9.0%
1500
8.0%
1300
Title:
Source:
1,370
50
7.0%
40
Please fill in the values above to have them entered in your report
1100
6.0%
900
5.0%
30
700
4.0%
20
500
3.0%
2.0%
300
10
1.0%
23
100
0
89
41
0.0%
FY09
FY10
FY11
FY12
FY13
-100
FY12
-9
EBIT margin
FY13
FY14F
FY15F
FY16F
Investment implications
In aviation and shipping, the M&A theme is playing out right now, with SIAs
voluntary general offer (VGO) for the remaining shares in Tiger Airways that it
does not own, and with Temaseks potential sale of its stake in NOL to either
CMA CGM or Maersk. Tigers share price is already trading at the offer price of
S$0.41/share, while NOLs share price is also seeing upward momentum on
the expectation that Temasek will not sell its stake at lower than NOLs book
value of S$1.35/share. We expect the M&A theme, more than any fundamental
sector recovery in the container shipping space, to drive NOLs share price
performance. Fundamentally, container shipping is very weak, with freight rates
at extremely low levels, as European demand contracted this year by 4.7% yoy
during 9M15, just as newbuilding deliveries hit a historic high. 2016 looks like a
potentially better year for container shipping, as newbuilding deliveries slow
and an eventual European restocking demand resumes, though the drivers are
hazy. If NOLs sale to CMA-CGM or Maersk fails to materialise, we expect a
short-term sell-off in its stock. Our NOL target price of S$0.95 has been set at
its trough P/BV multiple of 0.76x (-1 s.d.). SIA has been poor despite low oil
prices, as competitive pricing on Europe and US routes crimps yields. Our
analysts believes one should not be too negative on SIA, as 1) it is making
great strides in growing SilkAir and Scoot, 2) the VGO on Tiger Airways should
help optimise its landing rights portfolio, 3) SIA is taking delivery of more
efficient A350s soon, 4) it has introduced premium economy, which can boost
yields, and 5) share price trades at trough levels (0.9x P/BV, -1.s.d.). For both
airlines and shipping, valuations cap downside but a material improvement is
difficult to envision, if global growth stays weak.
For land transport, we expect double-digit earnings growth for ComfortDelGro
in FY16 and high-single-digit growth in FY17-18, driven by DTL contributions
and improved bus margins under the new contracting model (effective Aug-16).
The effects are not repeatable. We expect P/E multiples to drift lower, driven by
increasing concern over the threat posed by Uber and GrabCar. CDs current
FY16F P/E (19.0x, +1.5 s.d.) is way above mean (14.9x). It is tough to chase.
SMRTs profit is set to decline 11% in FY16 and stay flat in FY17, hurt by a
1.9% fare cut and repair and maintenance expenses. The reprieve for SMRT is
FY18, when fares finally catch up with rising costs, and repair and maintenance
intensity drops. We expect SMRTs P/E multiple to drift lower, on repeated
earnings disappointment. A possible rail reform is a positive for SMRT, but with
35
only c.S$460m net capital (20% of market cap) to be unlocked from the
possible rail sale, the gain is likely to be fully priced in. SMRTs current 27.3x
FY16F P/E (+3.5 s.d.) is way above its mean of 17.0x. Best to stay away.
The only segment that has a brighter future is logistics. We expect SingPosts
share price recovery to be driven by earnings rebound in FY18, as SPOST: 1)
realises synergies from its recent acquisitions of TradeGlobal and Jagged Peak,
2) acquires new e-commerce customers, 3) helps customers expand into new
markets in Asia Pacific, 4) sees volume growth alongside Alibabas expansion
into international markets (ex-China), 5) realises economies of scale with
volume growth, and 6) completes the redevelopment of the retail mall at
Singapore Post Centre, which will double the current GFA.
Figure 84: Transport & logistics stock-specific near-term and longer-term consideration factors
Structural negativ es
Near-term negativ es
Singapore
Airlines
Comfort
DelGro
SATS Ltd
> Margin expansion from de> Singapore becom ing a hub for AEC
consolidating food distribution div ision and its driv e to boost Changi airport's
costs to JV
traffic
Singapore
Post Ltd
Neptune
Orient
Lines
Near-term positiv es
Structural positiv es
36
Near-term positiv es
Gaming
Healthcare
Near-term negativ es
> Hou seholds in r egional ASEAN hav e > Wor st of cost pr essu r es fr om labor
to gr apple w ith r ising inflation as
cost and r ents, hav e alr eady peaked
cu r r encies spir al dow n
> Lack of dem and for discr etionar y
consu m ption item s w hen incom es slow
10%
Title:
Source:
THB/SGD
IDR/SGD
RM/SGD
5%
5%
0%
THB -1.7%
-0.3%
-5%
IDR -3.1%
-5%
-4.6%
-10%
-10%
RM -12.5%
-11.0%
-15%
-15%
-20%
-20%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
9M15
YTD
persist as RWS cuts back on credit extension to VIPs, while MBS has the
double advantage of location and availability of hotel rooms.
Figure 88: Bad debt charges at GENSs Resorts World Sentosa
(RWS) continue to remain high at least until 2H16
S$m
100
75%
65%
Title:
Source:
70%
90
80
60%
70
Average =S$61m
55%
60
50%
50
45%
40
40%
30
35%
20
30%
10
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
VIP GGR
Mass GGR
Overall GGR
Singapore
23.0
27.8
16.7
20.0
54.5
49.0
21.4
19.2
27.8
13.5
27.3
100%
Malaysia
14.0
8.8
10.9
8.6
20.8
18.5
12.5
12.5
17.9
8.2
13.3
49%
Thailand
13.0
3.8
11.4
16.7
23.0
22.0
16.5
11.5
16.0
12.0
14.6
53%
India
7.0
3.3
6.8
5.5
14.4
11.9
8.0
7.5
9.5
6.8
8.1
30%
Singapore
Indonesia (50+%)
Malaysia (5-10%)
Vietnam (5-10%)
Malaysia
Indonesia (50+%)
Others
Thailand
UAE (10%)
Myanmar (5-10%)
Oman (5-10%)
38
18%
85 & above
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5- 9
0- 4
4%
1.7%
16%
0.7%
0.5%
1.4%
1.3%
0.4%
14%
15.5%
2%
13.0%
0%
12%
10.2%
10%
8%
9.7%
8.9%
7.3%
6.9%
3.8%
4%
-4%
6.6%
5.4%
6%
-2%
5.3%
5.2%
4.7%
4.4%
-6%
-8%
2%
0%
-10%
Singapore
China
2000
Malaysia
2013
Thailand Indonesia
India
OECD
members
Title:
Source:
65 & above age group average = 424.4 per 1,000
5x
200
400
600
800
Investment implications
We expect weak consumer consumption to remain a drag throughout 2016.
With an impending rate hike, emerging market currencies could see further
devaluation. 3Q15 corporate results have already indicated 1) a clear
slowdown in discretionary spending (OSIM, Petra), 2) a pullback in staples as
consumers grappled with inflation (removal of fuel price subsidy in Indonesia
and GST implementation in Malaysia), and 3) negative forex impact (Super,
Petra). Signs of a slowdown in China are also more apparent. Overall, the
macro picture looks weak. Accordingly, our preference is for resilient names
like Sheng Siong and IHH. Consumer stocks are currently trading at 16.8x
forward P/E (below historical mean of 25x), which we think reflects the reality of
weak ASEAN consumer consumption. Share price recovery for consumer
stocks will require signs of an earnings rebound before valuation multiples can
recover to historical means; we think a more sustainable earnings recovery will
more likely come only in 2017. Although AEC and TPP bring the exciting
prospects of new markets, we believe near-term drags of weak demand will
outweigh.
In gaming, we expect GENSs adjusted EBITDA growth to remain tepid
through 2016-17, due to: 1) further pullback in credit extension to Chinese VIPs,
2) high bad debt charges, and 3) weak ASEAN currencies impacting visitation
from Malaysian and Indonesian mass players. As such, we think that share
price performance could be muted over the medium term. We see earnings rerating potential only in the longer term, with the full opening of Resorts World
Jeju in 2019 and as new expansion opportunities materialise.
39
Healthcare stocks, although currently trading at rich valuations (+1 s.d.), are
seeing similar valuations across the region. Valuations expanded in 2015 on
the back of 1) aggressive expansion plans, and 2) M&A. Given that the most of
the expansion plans will likely only result in earnings contribution in 2017 at the
earliest, we think current valuations already reflect: 1) the sectors stable
earnings, 2) relative price inelasticity, and 3) positive structural themes of an
ageing population and increasing healthcare expenditure. Baring more M&A or
expansion plans in new growth markets (e.g. IHH entering India, RFMD
entering China), we believe that share prices will be driven by earnings delivery
and earnings growth will be the driver for the healthcare sector in 2016.
Figure 94: Consumer stocks are currently trading at 16.8x P/E,
below their historical mean of 25x
60x
Figure 95: IHH is currently trading at more than 1 s.d. above its
historical trading band
IHHs 12m forward EV/EITDA
trading band (x)
29.0x
27.0x
50x
+1 s.d. 24.5x
25.0x
+1 SD
40x
23.0x
21.0x
30x
average 21.9x
Mean
19.0x
-1 s.d. 19.3x
20x
17.0x
10x
-1 SD
15.0x
$A$1:$G$18
0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EV/EBITDA
+1 s.d.
Average
-1 s.d.
Near-term negativ es
> Muted com petition (in term s of A&P > Enjoy m onopoly priv ileges from its
spend) as m arket is weak
spirits business, which generates free
cash flow to com pete in other business
> Vision 2 02 0 giv ing it a chance to
m orph into a regional business
Super
Group
OSIM Int'l
> Opening of Shanghai Disney land in > Growing dem and for dom estic
2 01 6 will benefit v isitation to SOA
tourism in China will benefit its
> UWX is likely to hav e bottom ed out attractions
> Redev elopm ent of retail term inal at
the Fly er will driv e better rents
Thai
Bev erage
Singapore
Press
Holdings
Petra
Foods
Sheng
Siong
Group
Straco
Corp
Near-term positiv es
Structural positiv es
40
Figure 97: Gaming and healthcare stock-specific near-term and longer-term consideration factors
Genting
Singapore
Structural negativ es
Near-term negativ es
Near-term positiv es
> Organic growth in core m arkets as > Building up its presence in long
they ram p up capacity
term growth m arkets India and China
> Translation effects, strong S$ v s RM
> Downward rev isions of profit targets > M&A rem ains a key agenda for
> Consolidation of priv ate dental
(of up to 2 0% seen so far)
m anagem ent
m arket in Singapore
> Slowing organic growth
> Outperform ance of profit guarantees > Expansion into China
IHH
Healthcare
Raffles
Medical
Group
Q&M
Dental
Group
Structural positiv es
> AEC to driv e m ore international
v isitor arriv als from ASEAN
41
Capital
Goods
Structural negativ es
Near-term negativ es
Near-term positiv es
Structural positiv es
> O&M activ ities are backed by Middle > Urbanisation trends in ASEAN new
East OPEC production
econom ies - My anm m ar and Vietnam
spurring property m arket and
dem and for infrastrucuture/ utilities
> Terrorism stokes security spending
SOURCE: CIMB RESEARCH, COMPANY
the yards than vessel owners. A deferral of newbuilds has lengthened cash
conversion cycles and stretched working capital requirements. Customers
are also paying slower as they suffer a cash flow crunch. KEP and SMM
have seen net gearing deteriorate to 0.5x and 0.7x from 0.1x and 0.2x,
respectively, in 2014. Both yards may be forced to bail Sete Brasil out by
financing 2-3 units of the Brazilian rigs, putting more pressure on the
balance sheet. Meanwhile, vessel owners net gearings are also expected
to rise in 2016 due to their committed capex. Their capex cycle is only
expected to moderate in 2017, and leverage can recede only then. Our
credit study concludes that although credit risks are heightened, there is no
material risk of insolvency. Also, all our rated companies, except Ezra, do
not have bonds payable in 2016. Arguably, credit risks for tier-2 companies
are stretched and the likelihood for cash calls is high. They, however, will
not be the first, as both Ezra and Swiber re-capitalised in 2015 to buttress
their balance sheets. Generally, we think the likelihood of an insolvency is
low. Bearing in mind that insolvency is a process, and rarely hinges on a
trigger event, available levers for companies to save themselves include
committed undrawn banking lines, financial restructuring and cash calls.
Figure 99: Negative project cashflows for Sete Brasil projects
Name
Contract
(US$'m)
KEP
Urca
809
90%
539
(189)
Unit 2
Unit 3
Frade
Bracuhy
823
823
66%
36%
362
251
(182)
(45)
100.0%
Unit 4
Unit 5
Unit 6
Portogalo
Mangaratiba
Botinas
823
823
823
11%
4%
0%
84
83
83
84
83
83
80.0%
1,403
(165)
SMM
Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Unit 6
Unit 7
Arproador
Guarapari
Camburi
Itaoca
Itaunas
Sahy
Siri
568
487
248
171
157
130
133
1,894
(129)
(139)
(267)
(138)
157
130
133
(254)
792
792
792
792
792
792
792
5,547
88%
79%
65%
39%
0%
0%
0%
2015
2016
120.0%
Unit 1
4,926
2014
140.0%
60.0%
40.0%
20.0%
0.0%
KEP
SCI
SMM
EZI
EZRA
MMT
NCL
PACRA SWCH
Company
Ezion
0.8
0.7
4.3
3.1
6.0
8.6
MMT
0.7
0.6
8.8
6.5
7.7
11.1
Nam Cheong
0.4
0.4
5.5
3.0
1.3
2.9
PACRA
1.1
1.0
10.2
6.8
3.9
6.3
Swissco
1.1
0.9
6.3
4.3
2.9
4.5
Vard
0.0
0.0
0.7
0.2
4.8
8.5
Simple average
0.7
0.6
5.9
4.0
4.4
7.0
Investment implications
We believe the effects of the short-term negatives for the offshore & marine
sector will take at least two years to flush out. 2016-17s earnings will take the
brunt of order drought in 2015-16 as well as have to cope with negative
operating leverage. The earliest that earnings recovery will take place will be in
2018, starting from a lower base. Small-cap stocks with weak financial muscle
45
Near-term negativ es
Keppel
Corp
> Relaxed property m easures in China > Property div ision to benefit from
sustaining hom e sale in second-tier
urbanisation trends in ASEAN new
cities in China
econom ies - My anm m ar and Vietnam
ST Eng
> Cabin retrofit spending from higher > Beneficiery of regional hubbing
profitability am ong airlines
spending on inco-com m and
infrastructure
> Defense spending heigtened to cope
with incresing threats from terrorists
Sembcorp
Ind
Sembcorp
Marine
Y angzi
jiang
Shipbldg
SIA Eng
Ezion
Holdings
Y oma
Strategic
Holdings
Near-term positiv es
Structural positiv es
> Power prices in Singapore to rem ain > Earnings drag from m arine
low on liberalisation of power m arket (cancellations, profit rev ersal)
> Start-up of two India power plants to > Dem and for utilities in dev eloping
grow utilities earnings
contries including India, Bangladesh
and My anm m ar
> Prolonged low-oil price env ironm ent > Poor execution as deliv eries are
> Lower returns on assets as custom ers repeatedly delay ed
becom e m ore dem anding
> Industry headwinds: contract
cancellations & rate cuts
> Im pairm ent & receiv ables risks
> Current net gearing of 1 .1 x
> a possible property price bubble
> subdued residential property sales
> poor education lev el
before the form ation of a new
gov ernm ent.
> strong growth in the non-real estate > My anm ar's political and econom ic
segm ents, including autom otiv e,
reform ;
consum ers and tourism .
> fav ourable dem ographics.
46
Structural negativ es
Near-term negativ es
Co
m
m
od
i
tie
s
Structural positiv es
> Slower new plantings rate to reduce
future supply
> Growing m iddle class group in Asia
will boost consum ption
> Rising biodiesel m andates in
Indonesia and Malay sia
SOURCE: CIMB RESEARCH, COMPANY
Stock (LHS)
(US$ /tonne)
3,000
1,400
Type
Period
1,300
El Nino
May 97 - Apr 98
Title:
Intensity
Strong
Source:
2,800
22.5%
15.1%
2,600
1,200
La Nina
Jul 98 - Mar 01
Strong
-63.8%
-33.8%
2,400
1,100
El Nino
May 02 - Feb 03
El Nino
Jul 04 - Jan 05
Weak
-10.1%
2,200
1,000
La Nina
Nov 05 - Mar06
Weak
2.2%
6.2%
2,000
900
El Nino
Sep 06 - Jan 07
Weak
32.3%
19.3%
1,800
800
La Nina
Aug 07 - Jun 08
Moderate
50.8%
75.9%
1,600
700
La Nina
Dec 08 - Mar 09
Weak
26.3%
1.0%
El Nino
Jul 09 - Apr 10
32.1%
16.2%
Moderate
26.5%
18.8%
Please
fill in the values above to have
them entered in your report
Moderate
Auto
update
-16.0%
1,400
600
La Nina
Jul 10 - Apr 11
Strong
45.1%
53.4%
1,200
500
La Nina
Sep 11 - Mar 12
Moderate
9.8%
-1.6%
1,000
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
400
* Changes are calculated using prices at the end of ENSO cycle and prices at the beginning of ENSO cycle
47
Investment implications
We believe Singapore planters share prices could recover in 2H16, driven by
an earnings recovery. The earnings recovery is due to a low base effect after
most of the negative impact from the changes in the IAS41 policy is priced in.
We expect CPO prices to trend higher in 2016 driven by lower palm oil supplies
due to El Nino and higher biodiesel consumption in Indonesia. However, this
will be partially offset by lower FFB output from the planters. Among the
planters under our coverage, we prefer planters like First Resources that offer
young estates and low costs of production as the company will be a prime
beneficiary of the next upturn in CPO prices.
Figure 109: Commodities stock-specific near-term and longer-term consideration factors
Wilmar
Int'l
Golden
AgriResources
First
Resources
Ltd
CWT
Limited
Indofood
Agri
Resources
Structural negativ es
Near-term negativ es
Near-term positiv es
Structural positiv es
> Potential buy out could driv e share > Dem and for integrated logistics
price up
serv ices in Singapore to grow with its
> Opening of m ega integrated logistics location as an ASEAN hub
hub in m id-2 01 7 will driv e logistics
earnings
48
Near-term negativ es
> Fav ourable exchange rate tailwind > Non traditional tech nam es
> End of custom er consolidation issues (Alphabet, Am azon) capitalising on
their branding to create new products.
> New innov ation - IOT, 3 D Printing,
Life Sciences
> Estim ated net gearing of c.41 % as at > Upcom ing 1 3 th 5-y ear plan in
China to prov ide further stim ulus
> Water assets along coastal regions to
benefit from "One Belt, One Road"
Ev erbright International) and IFC
Tianjin
Zhongx in
Pharma
Venture
Corp
Silv erlake
Ax is Ltd
Near-term positiv es
Structural positiv es
> China's ageing population
> China's SOE reform
> Receiv ables risk from industrial and sector to weigh on IRRs and expansion end FY1 5 offers lev erage potential to
China
plans.
boost ROE.
Ev erbright m unicipal custom ers
> Reduction in VAT rebate from 1 00% > Strong ties with SOE (China
Water
to 7 0% effectiv e Jul-1 5
China
Merchants
Holdings
Pacific
Figure 111: Small Cap stock-specific near-term and longer-term consideration factors
Structural negativ es
Near-term negativ es
Near-term positiv es
Structural positiv es
Del Monte
Pacific
Sarine
Tech
Talkmed
Group Ltd
> Reliance on CEO (key driv er behind > Exposure to Volkswagen (~1 0% of
sales)
49
50
51
LEAST PREFERRED
UOB, SGX
Financials
OW
DBS, OCBC
Property
OW
Wing Tai
REITs
OW
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
Capital Goods
UW
SCI, EZI
Commodities
FIRST
Gaming/Health
UW
Comsumer
UW
Silverlake
SOURCE: CIMB RESEARCH
Ahead in 1H16, a US rate hike cycle could depress sentiment. If the S&P500,
now back at record highs, stumbles, investment sentiment will look fragile. In
Asia, China and ASEAN are still reeling from a slowdown. The consumer in
developing ASEAN is pulling back. The commodity sector is seeing defaults
and a reneging of contracts. Banks NPLs are bound to be the next to be hit.
Investing at this point certainly exposes one to a long list of potential pitfalls.
That said, stocks are cheap and we reiterate that one needs a longer-term view
for specific catalysts to pan out. In our opinion, the biggest catalyst for
Singapore is the likelihood for it to prosper as an ASEAN hub as AEC, OBOR
investments and TPP developments materialise.
Sector preferences
Overweight banks, property and REITs. Our Overweight sectors remain
banks, property and REITs. Valuations are compelling, largely accounting
for known near-term negatives ahead, i.e. rising loan allowances for banks
and falling prices and decreasing rents for most property segments as they
digest the glut of completed supply entering the market. These sectors are
cheap, however, with the only question being what is the catalyst that can
drive a mean reversion. We believe that the catalyst is the prosperity of
ASEAN as the region becomes more integrated, driven by governments that
are more receptive to opening up and fuelled by FDIs from OBOR and TPP.
Singapore banks have multiple angles from which they can benefit. In a 1to 2-year timeframe. As ASEAN currencies stabilise, we expect to see more
local ASEAN consumer/services companies cross borders to attempt to
enter new markets because of AEC. Target markets will naturally be the
bigger markets of Indonesia or Indochina. Since the banking sector in
Indochina is relatively undeveloped, a lot of funding needs will likely be
financed by home market banks. A build-out of new manufacturing facilities
as MNCs realign the center of gravity of their logistics chains from China to
ASEAN also has to be funded by banks. Lastly, bigger infrastructure
building projects could be funded by a combination of Chinese SOEs (under
OBOR), Singapore or Malaysian sovereign wealth funds, bank lending and
debt papers all equate to more business for banks. These infrastructure
projects can also be subsequently converted into REITs or business trusts.
In the longer term, the combination of manufacturing jobs, urbanisation and
infrastructure investments has commonly led to a period of high GDP
growth and the birth of a middle-class consumer; we see these trends
blossoming in ASEAN and Singapore banks will benefit from this.
Singapore developers face a glut of completed supply in residential and
office space as well as hotels in Singapore and investors have asked what
can revive demand when the Singapore government seems to be content to
stick to its macro prudential property measures and restrictive immigration
policies. We think the answer lies in the creation of jobs linked to the
regionalisation of ASEAN. In the past decade, Singapore developers have
leaned outwards to China, then to Australia in recent years, as opportunities
52
P/BV (x)
Current ROE (RHS)
2.1x
1.9x
13.5%
13.0%
12.5%
1.7x
3.0x
P/BV (x)
Current ROE (RHS)
2.5x
1.5x
11.0%
1.1x
0.9x
0.7x
10.0%
0.0x
04 05 06 07 08 09 10 11 12 13 14 15 16
04
05
06
07
08
09
10
3.5
5.0
3.0
11
12
13
14
15
3.0
2%
2.5
0%
2.0
2003
16
14x
-1 SD
12x
6x
11x
4x
10x
05
06
07
08
09
10
11
12
13
14
15
21x
+1 SD
19x
17x
Mean
15x
Mean
13x
13x
8x
04
23x
14x
10x
2007
1.5
25x
+1 SD
15x
Mean
12x
2005
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
16x
16x
2.0
LT ave:
Jul-06
4.1%
Aug-06
4%
17x
+1 SD
2.5
4.0
3.5
18x
18x
4.5
6%
20x
4.5
$A$24:$G$41
20x
22x
5.5
10%
1.0x
0.5x
24x
4.0
16%
8%
10.5%
6.0
12%
11.5%
1.3x
%
6.5
18%
14%
2.0x
12.0%
1.5x
20%
-1 SD
11x
-1 SD
9x
7x
04
05
$A$1:$G$18
06 07 08 09
5x
10
11
12
13
14
15
53
04
05
06
$A$1:$G$18
07 08 09
10
11
12
13
14
15
Top picks
On the balance of 1) valuations, 2) likelihood of managing near-term
headwinds or negative surprises, and 3) the prospect of longer-term positive
catalysts if AEC, OBOR and TPP pan out, our large-cap picks are:
Capitaland. We view the property sector as a key beneficiary, if developing
ASEAN prospers and Singapore cements its status as a hub in the region.
Capitalands pan-Asian exposure will enable the group to ride the growth of
ASEAN and China. Its established REIT platforms will also allow it to
recycle mature assets into capital to fund the pursuit of new opportunities.
With 75% of its earnings derived from recurring sources, the group has a
steadily-growing income base to sustain its long-term ROE targets. Longerterm development in ASEAN notwithstanding, Capitaland also has nearterm catalysts, such as strong residential sales in Vietnam and a pick-up in
sales in China, to support the stock. Its valuation is decent at a 24%
discount to RNAV.
City Developments. Despite a dwindling landbank, City Developments is
still one of the best proxies for Singapore property and its most attractive
feature now is valuations. Rental income is underpinned by high portfolio
occupancy of 97.3% in Singapore and the upcoming completion of South
Beach. An estimated 96% of its office space has been leased, of which 70%
have commenced operations. Valuations are extremely attractive at 0.81x
P/BV and a 45% discount to RNAV. We view current valuations as reflective
of its lack of domestic opportunities plus heightened selling by key
shareholders. If ASEAN opportunities beckon, the previous monetisation of
its Sentosa assets had also freed up capital, which it can deploy.
DBS. DBS does not have a full ASEAN franchise compared to peers in
Singapore and Malaysia. It is not necessarily the best banking franchise to
profit from more intra-ASEAN activity as AEC blossoms. DBS does,
however, have: 1) Temasek as a shareholder, allowing it to benefit as a key
banking partner on regional infrastructure investments, be it in funding
Singapore GLCs or China SOEs (OBOR) heading into developing ASEAN,
2) a strong debt capital market franchise to support large corporates project
financing needs, and 3) strong treasury capabilities to appeal to US MNCs
seeking a banking partner in this region as more MNCs head into ASEAN
due to TPP and the need to find low-cost manufacturing centres. Valuations
of 1.0x CY16 P/BV and 9.9x CY16 P/E are attractive against a 2-year ROE
of 10.5% (FY16-17), where we pencil in heightened credit costs. Buying
opportunities are present after its recent share price weakness, driven by
concerns about its credit cycle.
IHH. IHH does not play to the AEC, OBOR or TPP trends but it benefits
from another structural long-term trend, i.e. that of an ageing population in
Singapore and Hong Kong. We view its entry to the Hong Kong market as
exciting; we see eventual contributions from Hong Kong potentially
matching Singapores. The threats to IHH are Singapores healthcare costs
(high) and the fact that hospitals are setting up regionally to satisfy local
demand and to cater to medical tourism. We believe that some
differentiation across geographies still exists and Singapore medical tourism
drivers can be intact. In the near term, more favourable currency
movements may help, including a stabilisation of the Turkish lira, which will
allow operational positives in local currency terms to show through.
SingPost. We view SingPost as a beneficiary of the irreversible trend of
consumer purchasing patterns migrating from brick-and-mortar outlets to ecommerce. SingPost is less about uncertain M&A-driven growth now and
more about driving synergies from its recent acquisitions of two US outfits.
The key to profitability is generating volumes by linking US retailers and
consumers, with ASEAN retailers and consumers. In this regard, the
lowering of customs restrictions in Indonesia (under AEC) will help.
Indonesia joining the TPP will also be helpful. Its valuation of 25.9x CY16
P/E is further supported by a CY16 dividend yield of 3.9%.
54
Price
Target
(local
Price
curr) (local curr)
Market
3-year
Recurring Dividend
Cap Core P/E (x)
EPS P/BV (x)
ROE (%) Yield (%)
(US$ m) CY2015 CY2016 CAGR (%) CY2015
CY2015
CY2015
Bbg Ticker
Recom.
CAPL SP
CIT SP
DBS SP
IHH SP
SPOST SP
THBEV SP
Add
Add
Add
Add
Add
Add
3.26
7.15
16.61
2.11
1.79
0.70
4.06
10.47
19.58
2.52
2.04
0.83
9,802
4,602
29,419
12,281
2,728
12,352
19.3
11.4
9.3
52.3
24.6
15.7
13.8
18.8
10.4
9.9
40.9
24.9
17.7
14.0
70.5%
15.8%
1.2%
15.5%
2.3%
1.1%
7.6%
0.80
0.77
1.03
2.60
2.62
3.92
1.27
4.3%
7.1%
11.6%
5.6%
11.2%
27.4%
9.8%
4.0%
2.6%
4.2%
0.3%
3.8%
3.7%
3.3%
Small-cap picks
China Everbright Water
GL Limited
Ho Bee Land
Innovalues Ltd
Mapletree Greater China Commercial Trust
Tianjin Zhongxin Pharmaceutical Group
Venture Corporation
Average
CEWL SP
GLL SP
HOBEE SP
IP SP
MAGIC SP
TIAN SP
VMS SP
Add
Add
Add
Add
Add
Add
Add
0.67
0.85
2.00
0.75
0.93
1.12
8.44
0.94
1.26
2.68
0.93
1.20
1.40
10.11
1,228
818
941
173
1,800
2,078
1,653
23.8
15.6
20.2
10.6
18.1
16.8
15.3
17.5
16.4
14.4
16.9
9.5
17.2
14.7
13.8
15.3
22.7%
7.9%
38.9%
18.6%
3.4%
4.5%
8.6%
15.0%
1.29
0.67
0.51
2.80
0.71
1.42
1.24
0.87
5.7%
4.2%
2.6%
29.7%
4.2%
9.8%
8.4%
5.2%
0.0%
2.6%
3.1%
4.3%
7.7%
2.1%
5.9%
4.2%
55
Figure 120: Various infrastructure project, earmarked by Chinas One Belt, One Road policy
56
Company Briefs
57
Company Note
Singapore
Ascendas REIT
Current price:
Target price:
Previous target:
Up/downside:
S$2.38
S$2.57
S$2.57
7.9%
Reuters:
Bloomberg:
Market cap:
AEMN.SI
AREIT SP
US$4,059m
S$5,735m
US$16.26m
S$22.90m
2,406m
83.0%
Price Close
2.50
112.3
2.30
105.1
2.10
40
30
20
10
98.0
Vol m
2.70
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
3.5
8.0
3M
10.2
10.5
12M
3.9
16.7
AREIT is undertaking AEIs totaling S$94.9m at the Jiashan Logistics Facility in China
and four properties in Singapore. These projects are scheduled to be completed in
phases between 4Q15 to 2Q16. With a gearing ratio of 37.8% (post Australian
transaction), AREIT will have ample room, in our view, to explore more inorganic growth
opportunities.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
613.6
436.0
462.2
342.0
0.15
21.5%
16.16
0.14
5.98%
29.6%
2.02
1.18
7.44%
Mar-15A
673.5
462.7
445.3
351.1
0.13
(12.2%)
18.40
0.15
6.13%
28.9%
2.08
1.14
6.30%
Mar-16F
736.7
523.0
380.7
389.7
0.16
22.1%
15.07
0.16
6.78%
32.8%
2.27
1.05
7.26%
0%
1.04
Mar-17F
786.1
569.9
405.9
409.0
0.17
6.3%
14.18
0.17
7.10%
32.8%
2.26
1.05
7.41%
0%
1.04
Mar-18F
800.7
580.5
416.5
425.8
0.17
2.3%
13.86
0.18
7.37%
32.8%
2.25
1.06
7.61%
0%
1.06
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
8.0
10.5
Absolute
3.5
10.2
12M
16.7
3.9
Major shareholders
% held
17.0
CBRE
5.0
ING
4.5
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.2000
0.1800
0.1600
0.1400
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Mar-14A
613.6
0.0
613.6
(177.6)
436.0
0.0
(35.6)
(5.2)
0.0
395.2
0.0
395.2
(36.0)
0.0
12.1
114.2
485.5
(23.2)
0.0
0.0
462.2
342.0
Mar-15A
673.5
0.0
673.5
(210.8)
462.7
0.0
(38.1)
(5.6)
0.0
419.0
0.0
419.0
(105.4)
0.0
2.0
136.4
452.0
(6.7)
0.0
0.0
445.3
351.1
Mar-16F
736.7
0.0
736.7
(213.6)
523.0
0.0
(53.9)
(6.8)
0.0
462.3
0.0
462.3
(78.5)
0.0
9.3
0.0
393.1
(1.8)
0.0
(10.6)
380.7
389.7
Mar-17F
786.1
0.0
786.1
(216.2)
569.9
0.0
(46.6)
(6.8)
0.0
516.5
0.0
516.5
(87.5)
0.0
0.0
0.0
429.0
(1.8)
0.0
(21.3)
405.9
409.0
Mar-18F
800.7
0.0
800.7
(220.2)
580.5
0.0
(46.6)
(6.8)
0.0
527.1
0.0
527.1
(87.5)
0.0
0.0
0.0
439.6
(1.8)
0.0
(21.3)
416.5
425.8
Mar-14A
485
24
5
(1)
(147)
367
(154)
22
(11)
(142)
170
(0)
(326)
(63)
(218)
6
230
333
Mar-15A
452
103
(10)
(2)
(180)
362
(102)
(289)
(252)
(643)
577
0
(261)
(63)
254
(27)
(272)
238
Mar-16F
393
69
0
(2)
(11)
450
0
(1,159)
0
(1,159)
698
0
(390)
395
703
(6)
(701)
(89)
Mar-17F
429
87
0
(2)
(20)
495
0
22
0
22
0
0
(409)
(87)
(496)
20
525
429
Mar-18F
440
87
0
(2)
(14)
512
0
0
0
0
0
0
(426)
(87)
(513)
(2)
520
424
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
59
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
6,923
0
301
7,224
66
0
66
2
134
127
946
33
1,107
1,231
171
1,402
4,849
0
Mar-16F
9,039
0
157
9,196
36
0
90
1
127
189
286
33
507
2,774
564
3,338
5,477
0
Mar-17F
9,039
0
135
9,174
56
0
90
1
147
189
286
33
507
2,774
564
3,338
5,475
0
Mar-18F
9,039
0
135
9,174
54
0
90
1
145
189
286
33
507
2,774
564
3,338
5,474
0
5,014
5,477
5,475
5,474
Mar-14A
6.56%
6.6%
71.1%
3.6%
5.95
4.79%
74%
0.12
0.12
0.06
6.46%
Mar-15A
9.76%
6.1%
68.7%
2.5%
3.69
1.49%
79%
0.26
0.26
0.08
5.74%
Mar-16F
9.38%
13.0%
71.0%
10.6%
5.33
0.45%
102%
0.25
0.25
0.07
4.35%
Mar-17F
6.71%
9.0%
72.5%
4.6%
5.39
0.41%
101%
0.29
0.29
0.11
4.35%
Mar-18F
1.86%
1.9%
72.5%
3.8%
5.50
0.40%
102%
0.29
0.29
0.11
4.47%
Mar-14A
2.3
N/A
N/A
N/A
95.0%
6,933.5
N/A
Mar-15A
2.8
N/A
N/A
N/A
91.1%
7,892.7
N/A
Mar-16F
2.5
N/A
N/A
N/A
92.3%
9,060.8
N/A
Mar-17F
2.5
N/A
N/A
N/A
93.0%
9,039.0
N/A
Mar-18F
2.6
N/A
N/A
N/A
93.0%
9,039.0
N/A
4,849
Mar-15A
7,868
0
160
8,028
42
0
90
1
133
189
286
33
507
2,076
564
2,640
5,014
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
60
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.18
S$1.30
S$1.30
10.5%
Reuters:
Bloomberg:
Market cap:
ASRT.SI
ART SP
US$1,288m
S$1,820m
US$0.74m
S$1.04m
1,525m
61.2%
110.0
1.250
105.0
1.200
100.0
1.150
95.0
1.100
8
6
4
2
90.0
Vol m
115.0
1.300
Jun-15
Absolute (%)
Relative (%)
1M
-2.9
1.6
3M
-1.7
-1.4
Sep-15
Source: Bloomberg
Price performance
1.350
Mar-15
Key markets including China, Japan, Singapore and Vietnam improved in 3Q15
Key markets including China (+2% yoy increase in RevPAU), Japan (+18% yoy),
Singapore (+3% yoy) and Vietnam (+7% yoy) more than offset weakness in the UK (-2%
yoy) and France (-2% yoy). In China, the ADR of refurbished apartment units at
Somerset Xu Hui Shanghai was lifted by c.35% in the latest completed phase of AEI in
2Q15. The remaining phases of AEI are on track for completion in 3Q16.
Dec-14
No change.
Price Close
12M
-6.4
6.4
We estimate that ART has debt head room of S$90m, assuming a target gearing limit of
40% vs. current gearing of 38.7%. As management continues to source for acquisitions,
we believe that more perpetual securities (which ART utilised last year) could be issued.
In terms of locations of potential assets, management could be looking at Europe,
Australia and Singapore.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
316.6
161.2
208.7
114.8
0.058
(15.1%)
20.27
0.084
7.15%
33.7%
1.37
0.85
4.24%
Dec-14A
357.2
180.2
122.5
125.6
0.057
(2.1%)
20.70
0.079
6.74%
38.0%
1.47
0.80
3.99%
Dec-15F
423.0
211.4
100.6
128.5
0.065
15.0%
18.00
0.083
7.10%
40.4%
1.61
0.73
4.24%
0%
0.98
Dec-16F
475.0
235.8
107.5
131.6
0.069
6.0%
16.98
0.085
7.21%
42.2%
1.58
0.74
4.34%
0%
0.96
Dec-17F
493.1
244.4
102.2
130.8
0.064
(8.0%)
18.46
0.081
6.93%
45.1%
1.54
0.76
4.07%
0%
0.90
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
1.6
-1.4
Absolute
-2.9
-1.7
Major shareholders
12M
6.4
-6.4
% held
CapitaLand
38.7
AIA Group
4.2
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Dec-13A
316.6
0.0
316.6
(155.5)
161.2
(4.8)
(14.7)
(0.3)
(0.6)
140.6
0.0
140.6
(42.6)
(0.0)
0.0
153.5
251.6
(36.2)
(6.7)
0.0
208.7
114.8
Dec-14A
357.2
0.0
357.2
(177.0)
180.2
(5.0)
(17.2)
(0.4)
5.2
162.7
0.0
162.7
(41.2)
0.0
0.0
45.8
167.3
(36.9)
(7.9)
0.0
122.5
125.6
Dec-15F
423.0
0.0
423.0
(211.6)
211.4
(6.6)
(20.1)
(0.4)
(0.8)
183.5
0.0
183.5
(56.8)
0.0
0.0
0.0
126.7
(18.2)
(7.9)
0.0
100.6
128.5
Dec-16F
475.0
0.0
475.0
(239.3)
235.8
(6.9)
(20.8)
(0.5)
(1.0)
206.7
0.0
206.7
(65.6)
0.0
0.0
0.0
141.0
(25.7)
(7.9)
0.0
107.5
131.6
Dec-17F
493.1
0.0
493.1
(248.7)
244.4
(7.5)
(22.8)
(0.5)
(1.0)
212.6
0.0
212.6
(76.6)
0.0
0.0
0.0
136.0
(24.5)
(7.9)
(1.4)
102.2
130.8
Dec-13A
251.6
42.6
2.3
(27.6)
(116.8)
152.0
(42.2)
(179.3)
1.1
(220.4)
(89.8)
397.7
(107.0)
(52.3)
148.5
80.2
(68.4)
(203.3)
Dec-14A
167.3
41.2
(25.8)
(22.4)
(7.8)
152.6
(40.0)
(422.9)
2.3
(460.6)
314.8
148.5
(116.5)
(48.8)
298.1
(10.0)
(308.1)
(35.1)
Dec-15F
126.7
56.8
0.0
(18.2)
26.0
191.2
(63.0)
(559.7)
89.4
(533.4)
329.5
250.0
(128.5)
(66.6)
384.4
42.3
(342.1)
(71.3)
Dec-16F
141.0
65.6
0.0
(25.7)
28.0
209.0
(70.8)
(116.0)
2.4
(184.4)
136.6
0.0
(131.6)
(75.9)
(70.9)
(46.3)
24.7
93.2
Dec-17F
136.0
76.6
0.0
(24.5)
31.0
219.2
(40.5)
(405.0)
1.9
(443.6)
327.5
100.0
(130.8)
(87.9)
208.9
(15.5)
(224.4)
24.6
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
62
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
3,201
0
57
3,258
205
0
35
87
327
115
50
6
172
1,158
68
1,226
2,093
94
2,187
Dec-14A
3,747
0
57
3,805
193
0
37
88
317
119
249
8
376
1,316
77
1,393
2,255
98
2,353
Dec-15F
4,350
0
67
4,417
235
0
37
0
272
119
79
8
205
1,816
77
1,893
2,485
106
Dec-16F
4,517
0
75
4,592
189
0
37
0
226
119
84
8
211
1,947
77
2,024
2,469
114
Dec-17F
4,939
0
84
5,024
173
0
37
0
210
119
98
8
224
2,261
77
2,338
2,550
122
2,591
2,582
2,671
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Dec-13A
4.2%
1.3%
50.9%
(4.11%)
3.15
14.4%
55%
1.90
1.90
1.19
6.33%
Dec-14A
12.8%
11.8%
50.4%
(5.71%)
3.75
22.1%
103%
0.84
0.84
0.51
3.18%
Dec-15F
18.4%
17.3%
50.0%
5.30%
3.12
14.4%
128%
1.32
1.32
1.14
2.28%
Dec-16F
12.3%
11.5%
49.6%
1.58%
3.04
18.2%
122%
1.07
1.07
0.89
2.26%
Dec-17F
3.8%
3.6%
49.6%
(3.85%)
2.71
18.0%
128%
0.94
0.94
0.77
2.03%
Dec-13A
N/A
N/A
131.7
N/A
N/A
3,177.0
N/A
Dec-14A
N/A
N/A
133.9
N/A
N/A
3,724.0
N/A
Dec-15F
N/A
N/A
136.6
N/A
N/A
4,326.9
N/A
Dec-16F
N/A
N/A
138.1
N/A
N/A
4,493.1
N/A
Dec-17F
N/A
N/A
139.6
N/A
N/A
4,916.1
N/A
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
63
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.91
S$1.06
S$1.06
17.1%
Reuters:
Bloomberg:
Market cap:
BTSS.SI
BOCS SP
US$332.1m
S$469.3m
US$0.15m
S$0.21m
520.2m
44.8%
Healthy order book of S$233m for industrial real estate solutions segment; slower
energy-related engineering order book of S$120m.
Price Close
1.60
109.0
1.40
99.0
1.20
89.0
1.00
79.0
0.80
69.0
0.60
3
59.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.1
-7.6
3M
11.0
11.3
12M
-39.8
-27.0
Very strong balance sheet; wait for the next bigger move
As at end-2QFY3/16, the group had a pure cash position of S$144m at BSL level,
representing 32% of its market cap (51%-owned BP has minimum net debt of S$15m
that is backed by its mature industrial real estate portfolio). We believe the strong cash
position will allow BSL to capitalise on the potential consolidation in the oil and gas
sector, when the right opportunities arise. Our FY16 SOP estimate stands at S$1.19 per
share, even if we fully write off the valuation for the energy division.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
513.7
96.98
70.68
0.12
5.0%
7.64
0.070
7.73%
2.92
17.74
(49.4%)
1.32
18.5%
Mar-15A
556.4
96.39
63.28
0.12
(1.4%)
7.75
0.040
4.42%
4.00
6.44
(19.9%)
1.24
16.5%
Mar-16F
497.5
65.65
30.39
0.06
(47.5%)
14.75
0.020
2.21%
6.32
6.50
(31.8%)
1.51
9.2%
0%
0.98
Mar-17F
512.2
70.96
34.86
0.07
9.4%
13.49
0.025
2.76%
5.41
17.40
(35.2%)
1.41
10.8%
0%
0.96
Mar-18F
537.6
72.89
36.75
0.07
5.4%
12.79
0.030
3.31%
4.87
17.70
(37.7%)
1.32
10.7%
0%
1.01
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
2.50
25.0%
30.0
60%
2.00
20.0%
25.0
40%
15.0%
20.0
20%
% held
1.50
15.0
0%
33.0
1.00
10.0%
10.0
-20%
8.8
0.50
5.0%
CHARTERED ASSET
MANAGEMENT PTEPTE
5.0
-40%
7.6
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
0.0
Jan-12 Jan-13
Relative
Absolute
-7.6
-12.1
Major shareholders
WONG FONG FUI
11.3
11.0
-27.0
-39.8
-60%
Jan-14
ROE (rhs)
Mar-14A
522.7
184.4
97.0
(8.4)
88.6
2.6
(0.6)
0.0
90.6
Mar-15A
564.0
193.8
96.4
(9.2)
87.2
3.0
(1.2)
0.0
90.3
Mar-16F
497.2
151.5
65.6
(10.7)
55.0
(0.1)
0.0
0.0
54.8
Mar-17F
513.4
161.2
71.0
(10.7)
60.3
0.1
0.9
0.0
61.3
Mar-18F
538.8
167.7
72.9
(10.7)
62.2
0.4
2.7
0.0
65.3
90.6
(19.3)
2.7
74.0
(3.4)
89.0
(23.8)
1.1
66.3
(3.1)
54.8
(12.9)
0.0
42.0
(11.6)
61.3
(13.9)
0.0
47.4
(12.6)
65.3
(14.8)
0.0
50.5
(13.8)
70.7
60.4
60.4
63.3
60.4
60.4
30.4
31.9
31.9
34.9
34.9
34.9
36.8
36.8
36.8
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
97.0
Mar-15A
96.4
Mar-16F
65.6
Mar-17F
71.0
Mar-18F
72.9
26.1
(31.9)
49.7
(1.3)
(1.2)
(3.8)
(5.1)
0.5
(0.0)
(0.0)
2.6
(20.4)
101.4
(80.4)
38.9
(47.1)
(5.4)
(93.9)
18.5
0.1
0.0
(18.7)
3.0
(19.0)
43.4
(58.7)
12.7
(58.2)
0.0
(104.2)
133.5
0.0
0.0
(28.4)
(0.1)
(22.6)
93.1
(3.7)
0.0
(14.7)
0.0
(18.4)
(2.3)
0.0
0.0
(15.6)
0.1
(12.8)
56.9
(3.7)
0.0
(15.0)
0.0
(18.7)
(11.2)
0.0
0.0
(11.7)
0.4
(13.9)
58.3
(3.7)
0.0
(15.0)
0.0
(18.7)
(13.0)
0.0
0.0
(14.3)
(5.6)
(5.7)
1.8
26.0
8.3
(0.7)
104.5
43.7
72.7
(58.6)
0.0
(17.9)
56.9
72.5
79.3
0.0
(22.9)
15.3
27.0
42.5
0.0
(27.3)
12.3
26.6
43.6
65
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
232.0
168.4
5.3
67.9
473.6
123.0
77.8
3.7
3.9
208.4
6.7
Mar-15A
264.1
193.5
6.1
106.7
570.4
176.6
87.9
1.5
16.6
282.5
12.1
Mar-16F
316.9
171.0
5.2
90.6
583.7
169.9
106.8
1.5
3.9
282.1
12.1
Mar-17F
332.3
171.0
5.2
90.6
599.1
163.3
122.7
1.5
3.9
291.3
12.1
Mar-18F
344.6
171.0
5.2
90.6
611.4
156.6
140.3
1.5
3.9
302.3
12.1
241.4
16.1
264.3
46.7
246.0
18.8
276.9
174.4
241.4
14.1
267.6
172.1
241.4
14.1
267.6
160.9
241.4
14.1
267.6
147.9
4.1
50.8
5.2
320.3
352.3
9.4
361.7
5.9
180.2
5.4
462.5
380.0
10.5
390.5
4.0
176.1
5.1
448.9
310.2
106.7
416.9
4.0
164.9
5.1
437.7
333.5
119.2
452.7
4.0
151.9
5.1
424.7
356.0
133.0
489.0
Mar-14A
0.1%
(3.3%)
18.9%
0.35
0.68
106.5
21.3%
53.1%
85.79
5.70
249.3
87.9%
23.9%
10.7%
Mar-15A
8.3%
(0.6%)
17.3%
0.15
0.73
40.4
26.7%
32.8%
76.19
5.64
234.5
64.1%
18.7%
8.4%
Mar-16F
(10.6%)
(31.9%)
13.2%
0.26
0.60
12.2
23.4%
34.2%
86.62
6.00
251.8
19.3%
10.0%
4.9%
Mar-17F
2.9%
8.1%
13.9%
0.31
0.64
14.1
22.6%
37.2%
85.52
5.40
246.8
26.8%
10.5%
5.4%
Mar-18F
5.0%
2.7%
13.6%
0.36
0.69
15.6
22.6%
42.3%
81.48
5.12
234.2
28.7%
10.4%
5.6%
Mar-14A
-16.9%
N/A
40.7%
N/A
51.8%
N/A
36.1%
N/A
-6.6%
N/A
20.8%
N/A
Mar-15A
22.1%
N/A
44.9%
N/A
6.2%
N/A
34.6%
N/A
9.3%
N/A
20.5%
N/A
Mar-16F
-1.6%
N/A
50.5%
N/A
-28.8%
N/A
28.1%
N/A
-9.0%
N/A
21.4%
N/A
Mar-17F
2.9%
N/A
50.5%
N/A
0.0%
N/A
27.3%
N/A
7.0%
N/A
22.2%
N/A
Mar-18F
2.9%
N/A
49.5%
N/A
7.1%
N/A
27.9%
N/A
7.0%
N/A
22.6%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
66
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.91
S$1.08
S$1.23
19.2%
Reuters:
Bloomberg:
Market cap:
CALT.SI
CACHE SP
US$574.4m
S$811.6m
US$1.02m
S$1.44m
780.6m
88.3%
Price Close
101.4
1.100
98.3
1.000
95.2
0.900
92.1
0.800
10
89.0
With DHL BTS receiving T.O.P in Jul 15 (contribution expected in FY16), we expect the
property to lift earnings and stabilise NPI margins. Its GFA accounts for c.15% of
Caches entire portfolio. Furthermore, as DHL will only take up 77% of the total GFA
from Jan 16 onwards, upside could come from leasing out the remaining space.
Vol m
1.200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.7
-2.2
3M
-6.2
-5.9
12M
-22.2
-9.4
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
81.0
76.8
63.63
65.56
0.077
28.3%
11.81
0.086
9.50%
28.8%
0.98
0.93
7.94%
Dec-14A
82.9
78.0
65.84
66.88
0.073
(5.1%)
12.45
0.086
9.42%
30.7%
0.98
0.93
7.45%
Dec-15F
90.4
77.7
52.90
60.81
0.063
(13.5%)
14.38
0.068
7.49%
39.0%
0.97
0.94
6.48%
(12.8%)
0.81
Dec-16F
110.5
95.0
65.82
73.92
0.074
16.4%
12.36
0.082
9.06%
39.0%
0.97
0.94
7.59%
(5.4%)
0.94
Dec-17F
117.8
101.3
71.20
79.38
0.079
7.6%
11.49
0.088
9.68%
39.0%
0.96
0.95
8.21%
(2.5%)
1.00
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
-2.2
-5.9
Absolute
-6.7
-6.2
Major shareholders
12M
-9.4
-22.2
% held
CWT Ltd
8.9
JP Morgan
7.7
6.6
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
45.0%
39.4%
33.8%
28.1%
22.5%
16.9%
11.3%
5.6%
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Dec-13A
81.0
0.0
81.0
(4.1)
76.8
0.0
(6.5)
(0.3)
(1.7)
68.2
0.0
68.2
(10.9)
0.0
0.0
6.7
64.1
(0.5)
0.0
0.0
63.6
65.6
Dec-14A
82.9
0.0
82.9
(4.9)
78.0
0.0
(6.7)
(0.3)
(1.6)
69.4
0.0
69.4
(12.3)
0.0
0.0
9.0
66.1
(0.3)
0.0
0.0
65.8
66.9
Dec-15F
90.4
0.0
90.4
(12.7)
77.7
0.0
(7.9)
(0.4)
(1.6)
67.9
0.0
67.9
(14.3)
0.0
0.0
0.0
53.6
(0.7)
0.0
0.0
52.9
60.8
Dec-16F
110.5
0.0
110.5
(15.5)
95.0
0.0
(8.1)
(0.4)
(1.6)
84.9
0.0
84.9
(18.3)
0.0
0.0
0.0
66.5
(0.7)
0.0
0.0
65.8
73.9
Dec-17F
117.8
0.0
117.8
(16.5)
101.3
0.0
(8.2)
(0.4)
(1.6)
91.1
0.0
91.1
(19.1)
0.0
0.0
0.0
71.9
(0.7)
0.0
0.0
71.2
79.4
Dec-13A
64.1
10.9
(0.0)
(0.5)
4.9
79.4
(0.0)
(120.0)
0.0
(120.0)
1.7
86.8
(65.6)
(7.0)
16.0
(24.7)
(40.6)
(45.9)
Dec-14A
66.1
12.3
(0.5)
(0.3)
5.0
82.6
(0.9)
(61.1)
(1.5)
(63.5)
42.2
0.0
(66.7)
(15.4)
(39.9)
(20.7)
10.6
46.0
Dec-15F
53.6
14.3
0.0
(0.7)
5.9
73.1
(0.0)
(222.5)
0.1
(222.4)
218.4
100.0
(60.8)
(14.4)
243.2
93.9
(149.3)
54.7
Dec-16F
66.5
18.3
0.0
(0.7)
6.1
90.3
(0.0)
0.0
0.1
0.1
0.0
0.0
(73.9)
(18.4)
(92.4)
(2.0)
90.3
71.9
Dec-17F
71.9
19.1
0.0
(0.7)
6.2
96.5
(0.0)
0.0
0.2
0.1
0.0
0.0
(79.4)
(19.3)
(98.7)
(2.0)
96.6
77.3
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
68
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,035
0
1
1,036
41
0
1
0
42
5
0
0
5
310
0
310
762
0
762
Dec-14A
1,120
0
2
1,122
11
0
3
0
15
21
7
0
27
343
0
343
767
0
767
Dec-15F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
Dec-16F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
Dec-17F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
867
867
867
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Dec-13A
11.4%
11.1%
94.9%
3.3%
6.26
0.71%
103%
9.01
9.01
8.82
6.16%
Dec-14A
2.3%
1.5%
94.1%
(0.8%)
5.65
0.42%
102%
0.54
0.54
0.42
5.95%
Dec-15F
9.1%
(0.3%)
86.0%
(20.4%)
4.73
1.36%
115%
4.08
4.08
3.95
4.08%
Dec-16F
22.2%
22.2%
86.0%
20.9%
4.60
1.10%
112%
4.08
4.08
3.95
4.52%
Dec-17F
6.6%
6.6%
86.0%
6.8%
4.72
1.02%
111%
4.08
4.08
3.95
4.89%
Dec-13A
1.5
N/A
N/A
N/A
100.0%
N/A
N/A
Dec-14A
1.6
N/A
N/A
N/A
100.0%
N/A
N/A
Dec-15F
1.6
N/A
N/A
N/A
92.5%
N/A
N/A
Dec-16F
1.6
N/A
N/A
N/A
94.2%
N/A
N/A
Dec-17F
1.6
N/A
N/A
N/A
94.2%
N/A
N/A
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
69
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.58
S$0.73
S$0.73
25.6%
Reuters:
Bloomberg:
Market cap:
CMIT.SI
CREIT SP
US$532.8m
S$752.7m
US$0.36m
S$0.51m
1,253m
67.0%
0.750
108.0
0.700
104.8
0.650
101.6
0.600
98.4
0.550
95.2
0.500
6
92.0
Vol m
Margin pressures and higher vacancies with MTBS conversions in the offing.
Pro-active capital management but gearing of 37.2% caps inorganic expansion.
Dividend yields exceed 8%, which should cap downside. Hold maintained, with
unchanged target price.
No change.
2
Dec-14
Price Close
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-7.2
-2.7
3M
-3.3
-3.0
12M
-14.7
-1.9
CREITs gearing of 37.2% in 3Q15 suggests that there is limited room for acquisition
opportunities. Given limited yield-accretive deals in Singapore, the REIT has broadened
its targets to Australia, Japan and Malaysia.
Maintain Hold
CREIT trades at dividend yields in excess of 8% which should cap downside. However,
we see potential downside risks in our estimates due to conversions and have little
reason to be excited on the back of limited inorganic expansion plus rising pressure from
MTB conversions. We maintain our Hold call and DDM-based target price of S$0.73.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
96.5
80.41
118.9
61.29
0.028
(26.5%)
20.83
0.050
8.58%
28.1%
0.70
0.83
4.13%
Dec-14A
99.3
77.81
45.3
63.04
0.040
45.1%
14.25
0.050
8.63%
34.4%
0.69
0.84
5.84%
Dec-15F
108.3
84.44
50.9
64.36
0.041
1.1%
14.31
0.051
8.83%
36.9%
0.68
0.86
5.92%
0%
1.05
Dec-16F
110.8
86.40
52.8
66.02
0.042
3.3%
13.86
0.052
9.02%
37.3%
0.66
0.87
6.24%
0%
1.05
Dec-17F
112.8
87.97
53.7
65.95
0.042
1.4%
13.67
0.052
8.98%
38.5%
0.65
0.89
6.44%
0%
1.02
Powered
by EFA
BY THE NUMBERS
1M
3M
12M
1.40
40.0%
0.0600
10.00%
1.20
34.3%
0.0500
8.33%
0.0400
6.67%
0.0300
5.00%
Relative
-2.7
-3.0
-1.9
Absolute
-7.2
-3.3
-14.7
1.00
28.6%
% held
0.80
22.9%
16.4
0.60
17.1%
0.40
11.4%
0.0200
3.33%
0.20
5.7%
0.0100
1.67%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
Major shareholders
JinQuan Tong
Credit Suisse Grp AG
5.9
5.6
DPS (lhs)
Dec-13A
96.5
0.0
96.5
(16.1)
80.4
0.0
(6.5)
(2.5)
(13.9)
57.6
0.0
57.6
(23.6)
0.0
0.0
84.9
118.9
(0.0)
0.0
0.0
118.9
61.3
Dec-14A
99.3
0.0
99.3
(21.5)
77.8
0.0
(6.6)
(1.4)
(1.7)
68.1
0.0
68.1
(17.5)
0.0
0.0
(5.2)
45.4
(0.1)
0.0
0.0
45.3
63.0
Dec-15F
108.3
0.0
108.3
(23.8)
84.4
0.0
(8.0)
(2.3)
(4.0)
70.2
0.0
70.2
(19.3)
0.0
0.0
0.0
50.9
0.0
0.0
0.0
50.9
64.4
Dec-16F
110.8
0.0
110.8
(24.4)
86.4
0.0
(8.0)
(2.3)
(4.1)
72.1
0.0
72.1
(19.3)
0.0
0.0
0.0
52.8
0.0
0.0
0.0
52.8
66.0
Dec-17F
112.8
0.0
112.8
(24.8)
88.0
0.0
(8.0)
(2.3)
(4.1)
73.6
0.0
73.6
(19.9)
0.0
0.0
0.0
53.7
0.0
0.0
0.0
53.7
65.9
Dec-13A
118.9
23.6
4.0
0.0
(84.9)
61.6
(25.6)
158.5
(3.9)
128.9
(141.5)
0.0
(43.8)
(21.4)
(206.7)
(16.2)
190.6
25.4
Dec-14A
45.4
17.5
(4.2)
0.0
8.6
67.4
(41.6)
(153.3)
0.6
(194.3)
117.8
0.0
(42.6)
(15.7)
59.5
(67.4)
(126.8)
(26.6)
Dec-15F
50.9
19.3
(2.6)
0.0
4.0
71.5
0.0
(30.5)
16.6
(13.9)
45.5
0.0
(64.4)
(23.3)
(42.1)
15.5
57.7
83.9
Dec-16F
52.8
19.3
0.6
0.0
3.2
75.8
0.0
0.0
0.0
0.0
0.0
0.0
(66.0)
(22.5)
(88.5)
(12.7)
75.8
56.5
Dec-17F
53.7
19.9
0.4
0.0
2.8
76.8
0.0
0.0
0.0
0.0
20.0
0.0
(65.9)
(22.6)
(68.6)
8.2
76.8
76.9
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
71
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,155
0
18
1,173
74
0
7
7
88
31
0
1
32
355
12
367
862
0
0
862
Dec-14A
1,335
0
16
1,352
6
0
11
12
29
26
50
0
76
425
12
438
866
0
0
866
Dec-15F
1,366
0
0
1,366
22
0
11
12
44
24
50
0
74
471
12
483
853
0
0
853
Dec-16F
1,366
0
0
1,366
9
0
11
12
32
24
50
0
74
471
12
483
840
0
0
840
Dec-17F
1,366
0
0
1,366
17
0
11
12
40
25
50
0
75
491
12
503
827
0
0
827
Dec-13A
8.44%
5.49%
83.3%
4.02%
2.43
0.009%
52%
2.70
2.70
2.26
9.27%
Dec-14A
2.96%
(3.24%)
78.3%
0.56%
3.86
0.225%
139%
0.38
0.38
0.08
3.43%
Dec-15F
8.97%
8.52%
78.0%
2.37%
3.64
0.000%
126%
0.60
0.60
0.29
3.65%
Dec-16F
2.32%
2.32%
78.0%
2.16%
3.74
0.000%
125%
0.43
0.43
0.12
3.76%
Dec-17F
1.82%
1.82%
78.0%
(0.44%)
3.70
0.000%
123%
0.53
0.53
0.23
3.83%
Dec-13A
N/A
N/A
N/A
8,014
97.4%
1,154.9
N/A
Dec-14A
N/A
N/A
N/A
8,014
96.3%
1,335.2
N/A
Dec-15F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Dec-16F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Dec-17F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
72
Company Note
Singapore
CapitaLand
Multi-pronged drivers
Current price:
Target price:
Previous target:
Up/downside:
S$3.26
S$4.06
S$4.06
24.6%
Reuters:
Bloomberg:
Market cap:
CATL.SI
CAPL SP
US$9,802m
S$13,848m
US$25.85m
S$36.41m
4,250m
53.6%
Price Close
108.3
3.00
101.1
2.50
60
94.0
Vol m
40
20
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
China residential sales improving; replenishing landbank via M&As and JVs to
optimise returns.
Targets to double serviced residence portfolio to 80,000 units by 2020.
Maintain Add with unchanged RNAV-based target price of S$4.06.
3.50
Mar-15
No change
Dec-14
1M
0.9
5.4
3M
16.4
16.7
12M
0.0
12.8
Maintain Add
We reiterate our Add rating with an unchanged target price of S$4.06. With 75% of its
earnings derived from recurring sources, the group has a steadily growing income base
to sustain its long-term ROE targets.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
4,874
725
898
0.13
63%
28.4
0.07
2.12%
42.48
67.71
61.4%
0.88
3.66%
Dec-14A
3,177
907
591
0.04
(71%)
100.6
0.09
2.76%
38.28
6.52
76.7%
0.83
1.00%
Dec-15F
3,810
1,260
1,002
0.17
344%
22.7
0.13
3.99%
26.07
22.44
38.4%
0.80
4.23%
1.46
Dec-16F
4,144
1,449
736
0.17
2%
22.1
0.09
2.62%
20.69
5.80
24.9%
0.77
4.18%
0.97
Dec-17F
4,843
1,667
873
0.21
19%
18.7
0.10
2.92%
20.05
9.19
30.3%
0.69
4.60%
1.05
Powered by
EFA
BY THE NUMBERS
1M
5.4
0.9
3M
16.7
16.4
12M
12.8
0.0
% held
39.5
6.9
P/BV vs ROE
1.200
4.50%
250
1,000%
1.000
3.75%
200
760%
0.800
3.00%
150
520%
0.600
2.25%
0.400
1.50%
100
280%
0.200
0.75%
50
40%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-200%
ROE (rhs)
Dec-13A
4,874
1,839
725
(52)
673
(368)
652
0
957
377
1,333
(124)
Dec-14A
3,177
1,199
907
(65)
842
(416)
506
0
932
525
1,457
(267)
Dec-15F
3,810
1,437
1,260
(60)
1,200
(477)
554
0
1,277
316
1,592
(167)
Dec-16F
4,144
1,564
1,449
(66)
1,382
(524)
499
0
1,358
0
1,358
(176)
Dec-17F
4,843
1,827
1,667
(73)
1,595
(477)
492
0
1,610
0
1,610
(208)
1,209
(311)
0
1,190
(599)
0
1,426
(423)
0
1,182
(446)
0
1,402
(529)
0
898
563
563
591
162
162
1,002
719
719
736
736
736
873
873
873
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Dec-13A
725
Dec-14A
907
Dec-15F
1,260
Dec-16F
1,449
Dec-17F
1,667
(1,933)
(3,210)
2,579
3,446
(789)
(608)
458
0
(140)
(1,498)
(2,607)
1,332
(300)
(229)
0
(137)
(2,969)
(2,329)
4,066
5
(479)
0
(140)
3,225
(1,890)
1,448
0
(567)
0
(214)
4,114
(791)
124
(52)
(471)
0
(135)
220
(1,309)
1,035
0
0
(1,275)
3,009
0
0
(294)
0
0
1,737
3,731
0
0
(266)
0
0
(442)
(2,057)
0
0
(329)
0
0
(667)
(635)
0
0
(514)
0
0
(274)
1,828
0
0
(253)
(461)
2,254
(487)
2,977
(606)
(2,991)
(540)
(1,690)
(520)
1,055
74
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
4,767
Dec-14A
2,749
Dec-15F
6,963
Dec-16F
9,593
Dec-17F
9,004
2,003
10,149
603
17,522
1,361
23,987
696
0
26,045
948
1,283
10,737
409
15,179
1,085
28,250
463
0
29,798
1,797
1,650
8,880
569
18,062
1,092
29,929
602
0
31,622
1,603
1,751
6,549
755
18,648
1,091
31,800
752
0
33,643
1,544
1,109
6,150
473
16,737
1,083
35,730
422
0
37,235
1,716
3,606
601
5,155
16,241
2,614
428
4,838
17,280
3,695
594
5,893
15,417
4,904
788
7,236
14,841
3,087
494
5,297
16,497
1,950
18,190
0
23,345
15,684
4,538
20,222
1,577
18,857
0
23,695
16,755
4,526
21,281
2,190
17,606
0
23,499
17,249
8,936
26,185
2,906
17,747
0
24,983
17,988
9,320
27,308
1,823
18,320
0
23,617
19,996
10,360
30,355
Dec-13A
47.6%
(8.2%)
14.9%
(2.92)
3.69
1.46
9.3%
56%
130.6
1,062
358.7
6.1%
2.16%
2.74%
Dec-14A
(34.8%)
25.0%
28.5%
(3.84)
3.94
1.60
18.3%
582%
188.8
1,927
573.7
6.0%
2.45%
2.22%
Dec-15F
19.9%
39.0%
33.1%
(2.37)
4.06
2.09
10.5%
81%
140.5
1,509
485.3
8.3%
3.11%
3.11%
Dec-16F
8.8%
15.0%
35.0%
(1.60)
4.23
2.42
12.9%
50%
150.2
1,094
609.8
12.3%
3.29%
3.10%
Dec-17F
16.9%
15.1%
34.4%
(2.17)
4.70
2.96
12.9%
46%
107.8
768
483.6
47.9%
3.59%
4.04%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
25.8%
25.7%
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
85.4%
21.7%
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
40.4%
21.7%
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50.2%
21.7%
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
114.8%
21.7%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
75
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.33
S$1.65
S$1.65
24.1%
Reuters:
Bloomberg:
Market cap:
CACT.SI
CCT SP
US$2,780m
S$3,927m
US$7.20m
S$10.14m
2,942m
67.9%
Muted office sentiment likely priced in. Reiterate Add, with an unchanged DDMbased target price.
Rental reversion remained positive in 9M15, with new lease demand from the
financial services, IT, media, telco and real estate sectors.
1.90
113.1
1.70
105.3
1.50
97.6
1.30
89.8
1.10
30
82.0
Vol m
20
10
Dec-14
In 3Q15, CCT registered 226,000 sq ft of new and renewed space, of which 36% were
new leases. Demand came largely from the financial services, IT, media and telcos and
real estate sectors. Transacted rents ranged from S$9.30-12.30 psf/month for One
George St, S$10.50-13.50 psf/month for 6 Battery Rd and S$11.90-14.00 psf/month for
CapitaGreen. Overall, average portfolio rent inched up to S$8.89 psf/month.
CapitaGreen, which opened on 9 Sep, achieved 87.7% committed occupancy rate.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.6
1.9
3M
0.8
1.1
12M
-20.6
-7.8
CCT has proactively re-contracted expiring leases, including those due in FY16. To
date, 2% of its office and retail leases are due to be renewed in FY15 and another 16%
in FY16. This provides the trust with good earnings visibility. Average expiring rents in
FY16 and FY17 range from S$9.69-10.26 psf/month. We expect the gap between
market and reversion rents to narrow, as market rents continue to slide over the next two
years due to above-average new supply.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
386.9
296.5
374.6
234.2
0.07
7.3%
17.92
0.081
6.12%
28.6%
1.71
0.78
4.41%
Dec-14A
262.6
205.2
448.8
249.2
0.13
69.9%
10.55
0.085
6.36%
19.0%
1.75
0.76
7.29%
Dec-15F
272.7
213.9
263.6
261.2
0.09
(29.2%)
14.89
0.089
6.66%
20.0%
1.75
0.76
5.11%
1.02
Dec-16F
287.6
224.4
305.4
272.7
0.10
15.7%
12.87
0.092
6.94%
20.7%
1.74
0.76
5.92%
1.03
Dec-17F
302.5
235.1
318.7
284.6
0.11
4.1%
12.36
0.096
7.23%
21.5%
1.74
0.76
6.18%
1.06
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
1.9
1.1
Absolute
-2.6
0.8
Major shareholders
CapitaLand
12M
-7.8
-20.6
% held
32.1
Capital Group
6.3
CBRE
6.1
1.200
35.0%
1.000
29.2%
0.800
23.3%
0.600
17.5%
0.400
11.7%
0.200
5.8%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Dec-13A
386.9
0.0
386.9
(90.4)
296.5
0.0
(21.5)
(3.0)
0.0
272.1
(5.0)
267.1
(59.1)
4.4
0.0
162.3
374.6
(0.0)
0.0
0.0
374.6
234.2
Dec-14A
262.6
0.0
262.6
(57.4)
205.2
0.0
(13.6)
(2.7)
0.0
189.0
(4.1)
184.9
(32.7)
217.4
(2.5)
81.8
448.9
(0.0)
0.0
0.0
448.8
249.2
Dec-15F
272.7
0.0
272.7
(58.8)
213.9
0.0
(15.6)
(3.5)
0.0
194.8
(4.1)
190.7
(30.0)
102.5
0.0
0.5
263.6
(0.0)
0.0
0.0
263.6
261.2
Dec-16F
287.6
0.0
287.6
(63.2)
224.4
0.0
(15.6)
(3.5)
0.0
205.3
(0.5)
204.8
(31.5)
131.7
0.0
0.5
305.5
(0.0)
0.0
0.0
305.4
272.7
Dec-17F
302.5
0.0
302.5
(67.4)
235.1
0.0
(15.6)
(3.5)
0.0
216.0
(0.5)
215.5
(33.0)
135.7
0.0
0.5
318.8
(0.0)
0.0
0.0
318.7
284.6
Dec-13A
374.6
59.7
19.2
(0.0)
(144.2)
309.3
(0.0)
(0.6)
(61.2)
(61.9)
(11.2)
38.0
(224.1)
(60.2)
(257.5)
(10.0)
249.8
177.2
Dec-14A
448.9
(178.0)
(4.6)
(0.0)
(77.8)
188.5
0.0
(30.1)
81.5
51.5
50.3
0.0
(242.8)
(30.5)
(223.0)
17.0
240.2
259.8
Dec-15F
263.6
(68.4)
1.8
(0.0)
9.6
206.6
0.0
(0.5)
88.8
88.3
80.0
0.0
(254.5)
(35.0)
(209.4)
85.5
298.0
345.0
Dec-16F
305.5
(99.7)
2.7
(0.0)
9.6
218.0
0.0
(0.5)
91.4
90.9
60.0
0.0
(265.7)
(42.4)
(248.1)
60.7
311.9
337.4
Dec-17F
318.8
(102.3)
2.7
(0.0)
9.6
228.8
0.0
(0.5)
94.2
93.8
70.0
0.0
(277.3)
(45.5)
(252.8)
69.8
325.8
359.5
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
77
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
7,090
8
2
7,100
104
0
15
0
118
97
0
18
116
2,061
129
2,190
4,913
0
Dec-15F
6,375
1
1
6,378
187
0
38
0
225
49
0
11
61
1,320
69
1,389
5,153
0
Dec-16F
6,375
1
1
6,378
247
0
38
0
286
52
0
11
63
1,380
69
1,449
5,151
0
Dec-17F
6,375
1
1
6,378
317
0
38
0
355
55
0
11
66
1,450
69
1,519
5,148
0
5,153
5,153
5,151
5,148
Dec-13A
3.0%
0.3%
76.6%
1.25%
4.35
0.005%
62.5%
1.02
1.02
0.90
5.27%
Dec-14A
(32.1%)
(30.8%)
78.2%
3.95%
5.07
0.011%
55.5%
0.42
0.42
0.31
6.53%
Dec-15F
3.9%
4.2%
78.4%
4.72%
5.78
0.011%
99.1%
3.71
3.71
3.08
4.02%
Dec-16F
5.4%
4.9%
78.0%
4.20%
5.93
0.011%
89.3%
4.51
4.51
3.91
4.60%
Dec-17F
5.2%
4.8%
77.7%
4.15%
5.95
0.011%
89.3%
5.39
5.39
4.81
4.76%
Dec-13A
8.1
N/A
N/A
N/A
94.1%
6,959.8
N/A
Dec-14A
8.2
N/A
N/A
N/A
99.6%
4,882.4
N/A
Dec-15F
8.4
N/A
N/A
N/A
99.6%
4,946.3
N/A
Dec-16F
8.8
N/A
N/A
N/A
99.6%
4,946.3
N/A
Dec-17F
9.2
N/A
N/A
N/A
99.6%
4,946.3
N/A
4,913
Dec-14A
6,375
5
1
6,382
101
0
38
0
139
47
270
11
329
970
69
1,039
5,153
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
78
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.91
S$2.28
S$2.28
19.4%
Reuters:
Bloomberg:
Market cap:
CMLT.SI
CT SP
US$4,787m
S$6,764m
US$9.70m
S$13.65m
3,462m
70.0%
CT was affected by ongoing AEI works and lower occupancy, offset by lower
operating expenses and reduced interest charges.
Notwithstanding the anaemic retail spending, CTs malls produced shopper traffic
and tenant sales growth in 3Q15.
New contributions to be felt from Bedok Mall; recent divestment of Rivervale Mall
improves financial flexibility.
Flat NPI
CTs NPI was flat yoy as lower contributions from IMM, JCube and Clarke Quay was
offset by lower property expenses, particularly from utilities and reduced interest charges
(on lower financing costs). There was also a release of income retained earlier.
No change.
2.300
114.0
2.200
110.8
2.100
107.6
2.000
104.4
1.900
101.2
1.800
30
98.0
Vol m
20
10
Dec-14
As at end-Sep 15, portfolio occupancy was down 2% pts qoq to 96.8% due to assetenhancement works and reconfiguration works at IMM, Bukit Panjang Plaza, Clarke
Quay and JCube. Post these makeover activities, we expect occupancy to improve.
AEIs completed include the conversion of L5 open roof to a new education hub at
Tampines Mall. H&M also opened its store in the mall, its first in the eastern part of
Singapore.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.8
1.7
3M
1.6
1.9
12M
-3.5
9.3
The leasing environment remains competitive, with rental reversions averaging a lower
4.1% in 3Q15 vs. 4.6% in 2Q15. However, tenant sales expanded 4.4% yoy for 9M15,
with 3Q showing stronger estimated growth of 7.9%. Shopper traffic also grew 4.2% for
9M, with 3Q performance coming in at an estimated stronger 5.8%. With a remaining
4.9% and a further 27.5% of rental income to be renewed in 4QFY15 and FY16
respectively, we anticipate the earnings outlook to remain stable.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
637.6
438.7
397.1
356.2
0.11
35.8%
16.63
0.10
5.38%
30.4%
1.74
1.10
6.78%
Dec-14A
658.9
448.4
614.0
375.3
0.13
13.7%
14.62
0.11
5.68%
32.1%
1.81
1.05
7.35%
Dec-15F
660.6
452.5
460.6
387.6
0.13
1.9%
14.36
0.11
5.86%
32.5%
1.81
1.05
7.33%
1.02
Dec-16F
720.6
493.6
407.2
408.4
0.12
(12.5%)
16.41
0.12
6.05%
32.8%
2.02
0.95
6.07%
0.99
Dec-17F
746.1
511.1
432.3
427.5
0.12
5.1%
15.62
0.12
6.33%
32.9%
2.02
0.95
6.05%
1.03
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
1.7
1.9
9.3
Absolute
-2.8
1.6
-3.5
Major shareholders
CapitaLand
% held
30.0
Capital Research
7.7
Capital Group
7.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.1400
7.00%
0.1200
6.00%
0.1000
5.00%
0.0800
4.00%
0.0600
3.00%
0.0400
2.00%
0.0200
1.00%
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
DPS (lhs)
Dec-13A
637.6
0.0
637.6
(198.9)
438.7
0.0
(39.0)
(3.7)
0.0
396.0
0.0
396.0
(102.7)
104.2
0.0
397.6
(0.5)
0.0
0.0
397.1
356.2
Dec-14A
658.9
0.0
658.9
(210.5)
448.4
0.0
(41.7)
(4.6)
0.0
402.1
0.0
402.1
(99.3)
149.2
0.0
162.0
614.0
(0.0)
0.0
0.0
614.0
375.3
Dec-15F
660.6
0.0
660.6
(208.1)
452.5
0.0
(45.3)
(4.5)
0.0
402.7
0.0
402.7
(91.4)
77.3
72.0
0.0
460.6
0.0
0.0
0.0
460.6
387.6
Dec-16F
720.6
0.0
720.6
(227.0)
493.6
0.0
(49.5)
(4.9)
0.0
439.2
0.0
439.2
(110.8)
78.8
0.0
0.0
407.2
0.0
0.0
0.0
407.2
408.4
Dec-17F
746.1
0.0
746.1
(235.0)
511.1
0.0
(49.6)
(4.9)
0.0
456.6
0.0
456.6
(104.9)
80.6
0.0
0.0
432.3
0.0
0.0
0.0
432.3
427.5
Dec-13A
397.6
(1.5)
18.2
(0.1)
(169.7)
244.5
(99.3)
(32.2)
60.4
(71.1)
(181.4)
(1.5)
(340.7)
(99.1)
(622.7)
(449.2)
177.6
(107.1)
Dec-14A
614.0
(50.0)
5.7
(0.5)
(162.0)
407.3
(64.7)
11.6
96.6
43.5
320.3
(5.1)
(370.3)
(97.5)
(152.5)
298.3
457.9
673.6
Dec-15F
460.6
(57.9)
0.6
0.0
0.0
403.3
(38.0)
(1.2)
0.0
(39.2)
45.2
0.0
(387.6)
(91.4)
(433.8)
(69.7)
378.7
317.9
Dec-16F
407.2
32.0
19.8
0.0
3.0
462.0
(38.0)
186.7
0.0
148.7
479.9
0.0
(408.4)
(110.8)
(39.3)
571.4
625.5
979.8
Dec-17F
432.3
24.3
8.4
0.0
0.0
465.0
(20.0)
(1.3)
0.0
(21.3)
20.0
0.0
(427.5)
(104.9)
(512.4)
(68.7)
466.9
358.8
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
80
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
8,362
0
7
8,369
830
0
22
0
851
183
498
6
687
2,307
218
2,525
6,009
0
6,009
Dec-14A
8,644
0
60
8,704
1,130
0
25
0
1,155
217
762
36
1,016
2,407
153
2,560
6,282
0
6,282
Dec-15F
8,682
0
60
8,742
1,138
0
25
0
1,163
218
0
36
254
3,215
153
3,368
6,283
0
Dec-16F
9,384
0
60
9,444
1,790
0
25
0
1,815
238
0
36
274
3,694
153
3,848
7,137
0
Dec-17F
9,404
0
60
9,464
1,803
0
25
0
1,828
246
0
36
282
3,714
153
3,868
7,142
0
6,283
7,137
7,142
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Dec-13A
(3.63%)
(1.47%)
68.8%
8.56%
3.71
0.126%
90%
1.24
1.24
1.21
4.16%
Dec-14A
3.33%
2.20%
68.1%
5.55%
3.53
0.006%
61%
1.14
1.14
1.11
6.44%
Dec-15F
0.26%
0.92%
68.5%
3.28%
3.80
0.000%
84%
4.58
4.58
4.48
4.66%
Dec-16F
9.09%
9.09%
68.5%
3.21%
3.50
0.000%
100%
6.63
6.63
6.54
3.85%
Dec-17F
3.54%
3.54%
68.5%
4.67%
3.56
0.000%
99%
6.48
6.48
6.39
3.83%
Dec-13A
11.7
N/A
N/A
N/A
84.6%
N/A
N/A
Dec-14A
12.3
N/A
N/A
N/A
85.8%
N/A
N/A
Dec-15F
10.5
N/A
N/A
N/A
83.5%
N/A
N/A
Dec-16F
11.1
N/A
N/A
N/A
85.0%
N/A
N/A
Dec-17F
11.4
N/A
N/A
N/A
85.3%
N/A
N/A
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
81
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.32
S$1.59
S$1.59
20.2%
Reuters:
Bloomberg:
Market cap:
CDLT.SI
CDREIT SP
US$922.3m
S$1,303m
US$1.02m
S$1.43m
982.2m
67.0%
No change.
104.4
1.60
97.3
1.40
90.1
1.20
15
83.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.0
0.5
But offset by growth in Japan and new income from Hilton Cambridge.
Offering investors a dividend yield of 8%, we believe that weakness in Singapore
and Maldives has been priced in. Maintain Add with unchanged DDM-based TP.
1.80
Dec-14
Singapore hotel operating conditions remain challenging, with 9M15 RevPAR sliding
6.4% yoy to S$176. While occupancy remained resilient, averaging 88.2%, room rates
remained soft on new supply and weaker corporate demand (-6.1% yoy to S$199). On a
qoq basis, we believe that we could have seen some stabilisation as 3Q15 was 4.6%
higher qoq. Management guided that Oct RevPar was 1.4% higher yoy. Claymore
Connect is now 81% occupied and is expected to deliver steady recurrent income.
Price Close
3M
0.0
0.3
12M
-23.5
-10.7
Overseas contributions have been and will likely continue to be affected by FX volatility.
Weakness in the resources sector will continue to weigh on demand at hotels in
Australia (its 9M15 NPI is down 10% yoy). Maldives hotels reported an 18.3% decline in
RevPAR and are likely to remain adversely affected by slower tourist arrivals due to the
slowdown in Chinese luxury travel and weakening of the Russian rouble. The underlying
weakness in Maldives was only offset by the strong US dollar (its 9M15 NPI rose 6%
yoy).
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
148.8
137.4
140.3
106.7
0.11
(3.37%)
12.30
0.11
8.31%
29.6%
1.63
0.81
6.61%
Dec-14A
166.8
140.5
122.5
107.6
0.11
(0.06%)
12.31
0.11
8.32%
31.6%
1.65
0.80
6.54%
Dec-15F
174.8
143.6
100.9
103.1
0.10
(4.55%)
12.89
0.10
7.90%
35.1%
1.65
0.80
6.20%
0%
1.01
Dec-16F
190.6
153.8
107.2
109.8
0.11
5.63%
12.20
0.11
8.37%
34.9%
1.66
0.80
6.53%
0%
1.03
Dec-17F
194.7
155.6
108.9
111.5
0.11
1.04%
12.08
0.11
8.45%
34.6%
1.67
0.79
6.57%
0%
1.03
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
0.5
0.3
Absolute
-4.0
0.0
Major shareholders
Hospitality Holdings Pte Ltd
12M
-10.7
-23.5
% held
32.8
Aberdeen Investment
4.4
Bank of America
4.4
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.1140
0.1120
0.1100
0.1080
0.1060
0.1040
0.1020
0.1000
0.0980
0.0960
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
8.80%
8.62%
8.44%
8.27%
8.09%
7.91%
7.73%
7.56%
7.38%
7.20%
Dec-13A
148.8
0.0
148.8
(11.4)
137.4
0.0
(12.4)
(0.3)
(1.7)
123.1
0.0
123.1
(16.6)
0.0
0.0
36.6
143.0
(2.7)
0.0
0.0
140.3
106.7
Dec-14A
166.8
0.0
166.8
(26.3)
140.5
0.0
(12.9)
(0.3)
(4.7)
122.7
0.0
122.7
(16.4)
0.0
0.0
17.6
123.9
(1.4)
0.0
0.0
122.5
107.6
Dec-15F
174.8
0.0
174.8
(31.2)
143.6
0.0
(14.5)
(0.3)
(1.9)
126.9
0.0
126.9
(24.1)
0.0
0.0
0.0
102.8
(1.9)
0.0
0.0
100.9
103.1
Dec-16F
190.6
0.0
190.6
(36.7)
153.8
0.0
(14.6)
(0.3)
(1.9)
137.1
0.0
137.1
(26.9)
0.0
0.0
0.0
110.2
(3.0)
0.0
0.0
107.2
109.8
Dec-17F
194.7
0.0
194.7
(39.1)
155.6
0.0
(14.6)
(0.3)
(1.9)
138.8
0.0
138.8
(26.8)
0.0
0.0
0.0
112.0
(3.1)
0.0
0.0
108.9
111.5
Dec-13A
143.0
16.6
(5.0)
(2.7)
(23.5)
128.4
(6.2)
(86.8)
0.4
(92.6)
158.4
0.0
(106.7)
(17.1)
34.7
70.6
36.3
177.7
Dec-14A
123.9
16.4
3.8
(1.4)
(3.3)
139.4
(27.4)
(65.5)
0.3
(92.6)
154.1
(0.9)
(105.6)
(86.6)
(39.1)
7.7
47.2
184.6
Dec-15F
102.8
24.1
(7.0)
(1.9)
14.2
132.2
(6.9)
(133.2)
0.6
(139.5)
135.3
0.0
(103.1)
(22.0)
10.2
2.8
(6.7)
103.9
Dec-16F
110.2
26.9
2.7
(3.0)
15.3
152.0
(7.4)
0.0
0.7
(6.7)
0.0
0.0
(109.8)
(24.6)
(134.4)
11.0
146.0
118.5
Dec-17F
112.0
26.8
0.7
(3.1)
15.5
152.0
(7.4)
0.0
0.8
(6.6)
0.0
0.0
(111.5)
(24.7)
(136.1)
9.2
146.1
118.6
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
83
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
2,239
0
0
2,239
68
0
16
0
84
22
146
0
168
542
17
559
1,595
0
Dec-15F
2,429
0
67
2,496
75
0
22
0
97
29
317
0
347
593
19
612
1,633
0
Dec-16F
2,436
0
67
2,503
86
0
22
0
108
32
317
0
350
593
19
612
1,649
0
Dec-17F
2,443
0
67
2,510
95
0
22
0
117
33
317
0
350
593
19
612
1,665
0
1,619
1,633
1,649
1,665
Dec-13A
(0.5%)
(1.37%)
92.3%
(3.09%)
7.22
1.88%
76%
0.50
0.50
0.40
6.30%
Dec-14A
12.1%
2.28%
84.2%
0.09%
6.99
1.15%
88%
0.27
0.27
0.20
5.13%
Dec-15F
4.8%
2.17%
82.1%
(4.97%)
5.13
1.89%
102%
0.28
0.28
0.22
4.00%
Dec-16F
9.0%
7.14%
80.7%
5.85%
4.97
2.73%
102%
0.31
0.31
0.25
4.12%
Dec-17F
2.2%
1.16%
79.9%
0.94%
5.03
2.77%
102%
0.33
0.33
0.27
4.16%
Dec-13A
N/A
N/A
193.5
N/A
87.4%
2,238.8
N/A
Dec-14A
N/A
N/A
194.9
N/A
86.9%
2,288.5
N/A
Dec-15F
N/A
N/A
179.9
N/A
87.9%
2,428.6
N/A
Dec-16F
N/A
N/A
177.9
N/A
87.9%
2,435.9
N/A
Dec-17F
N/A
N/A
175.9
N/A
87.9%
2,443.3
N/A
1,595
Dec-14A
2,288
0
67
2,356
72
0
22
0
94
36
317
1
355
458
19
476
1,619
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
84
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.67
S$0.94
S$0.94
40.7%
Reuters:
Bloomberg:
Market cap:
CEWL.SI
CEWL SP
US$1,228m
S$1,734m
US$0.94m
S$1.32m
2,608m
17.6%
Maintain Add with TP of S$0.94. Strong project pipeline to sustain earnings growth.
VAT rebate reduction (wef Jul 15) will adversely affect operation income, but can be
mitigated through higher water tariffs.
1.10
115.9
0.90
101.6
0.70
87.3
0.50
30
73.0
Vol m
20
10
Dec-14
Chinas water sector remains highly fragmented, with the top 10 municipal WWT players
making up c.25% of market share. 50% of water assets are still owned by municipal
governments. With the push towards greater PPPs and higher environmental standards,
we see potential in CEWL with its SOE-backing to benefit from industry consolidation
and release of water projects. A risk is intensifying competition among peers which may
weigh on project IRRs (8-10% for municipal projects) and the bidding process.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-7.6
-3.1
3M
-0.8
-0.5
12M
-31.8
-19.0
In a consultation document for the 13 5-year plan, we noted stricter requirements for
water standards to be complied with by 2017. Should this be implemented in 2016, it will
drive significant upgrading works as c.27% of combined capacity(1.26mt/d) have not met
the highest Grade 1A standard. These, in turn should substantiate water tariff hikes,
which we have already seen in some projects.
[X]
Financial Summary
Analysts
NGOH Yi Sin
T (65) 6210 8604
E yisin.ngoh@cimb.com
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
Keith LI
T (852) 2532 1110
E keith.li@cimb.com
Revenue (HK$m)
Operating EBITDA (HK$m)
Net Profit (HK$m)
Core EPS (HK$)
Core EPS Growth
FD Core P/E (x)
DPS (HK$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
1,291
481
266.5
0.14
0.0%
26.56
0%
16.63
NA
28.8%
4.29
Dec-14A
1,051
534
292.8
0.15
7.4%
24.74
0%
16.13
14.3
17.5%
1.43
7.34%
Dec-15F
1,906
738
391.2
0.15
4.1%
23.76
0%
17.20
NA
41.2%
1.29
5.71%
0.99
Dec-16F
3,019
1,145
578.8
0.22
44.5%
16.44
0%
13.21
121.3
64.7%
1.20
7.55%
1.05
Dec-17F
3,567
1,453
709.4
0.27
22.6%
13.41
0%
11.98
42.2
84.3%
1.10
8.54%
1.04
Powered
by EFA
BY THE NUMBERS
1M
3M
12M
Relative
-3.1
-0.5
-19.0
Absolute
-7.6
-0.8
-31.8
Major shareholders
% held
74.4
3.1
2.7
P/BV vs ROE
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Jan-11
8.00%
7.11%
6.22%
5.33%
4.44%
3.56%
2.67%
1.78%
0.89%
0.00%
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
60.0
50.0%
50.0
41.7%
40.0
33.3%
30.0
25.0%
20.0
16.7%
10.0
8.3%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
ROE (rhs)
Dec-13A
1,291
529
481
(17)
463
(72)
0
10
402
Dec-14A
1,051
596
534
(24)
510
(90)
0
13
433
Dec-15F
1,906
857
738
(71)
667
(127)
0
41
581
Dec-16F
3,019
1,285
1,145
(71)
1,074
(257)
0
41
859
Dec-17F
3,567
1,614
1,453
(71)
1,382
(368)
0
41
1,055
402
(112)
433
(119)
581
(165)
859
(249)
1,055
(306)
290
(24)
314
(21)
415
(24)
610
(31)
749
(40)
266
266
266
293
293
293
391
391
391
579
579
579
709
709
709
Cash Flow
(HK$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
481
Dec-14A
534
Dec-15F
738
Dec-16F
1,145
Dec-17F
1,453
(190)
(1)
10
(173)
8
13
(290)
0
41
(899)
0
41
(1,092)
0
41
(72)
(56)
172
(12)
(90)
(65)
226
(3)
(127)
(165)
196
(2,856)
(257)
(249)
(218)
(1,971)
(368)
(306)
(271)
(1,971)
432
(12)
(228)
0
428
(149)
0
(2,856)
1,737
660
(1,971)
2,268
0
(1,971)
2,468
0
140
(88)
72
(69)
238
(247)
(396)
259
506
747
(127)
2,271
(389)
(923)
(2,533)
0
2,268
78
78
(1,932)
0
2,468
225
225
(1,875)
86
BY THE NUMBERS
Balance Sheet
(HK$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
290
720
7
4
1,022
170
0
158
4,041
4,369
278
Dec-14A
681
999
29
0
1,709
174
0
1,994
6,235
8,403
763
Dec-15F
292
1,526
105
0
1,923
174
0
1,944
9,088
11,206
763
Dec-16F
370
2,076
189
0
2,635
174
0
1,894
11,731
13,799
763
Dec-17F
595
2,449
189
0
3,233
174
0
1,844
14,400
16,418
763
642
0
920
586
619
23
1,405
1,062
951
23
1,737
2,672
1,379
23
2,165
4,940
1,379
23
2,165
7,407
1,587
2,174
306
3,399
1,649
343
1,991
264
1,326
829
3,560
6,325
226
6,551
264
2,937
829
5,502
7,377
250
7,626
264
5,204
829
8,198
7,955
281
8,236
264
7,672
829
10,666
8,665
321
8,985
Dec-13A
0.0%
0.0%
37.2%
(0.30)
0.85
5.88
27.7%
NA
119.4
3.43
297.2
7.80%
N/A
N/A
Dec-14A
(18.6%)
11.1%
50.8%
(0.46)
2.54
5.53
27.5%
NA
162.8
14.49
490.0
8.58%
8.28%
4.92%
Dec-15F
81.4%
38.1%
38.7%
(1.21)
2.83
5.25
28.5%
NA
117.4
23.32
266.2
5.69%
6.32%
4.39%
Dec-16F
58.4%
55.3%
37.9%
(2.04)
3.05
4.19
29.0%
NA
101.7
31.10
241.8
6.79%
8.06%
5.43%
Dec-17F
18.2%
26.9%
40.7%
(2.90)
3.32
3.76
29.0%
NA
102.8
35.39
254.0
7.07%
8.44%
5.68%
Dec-13A
N/A
0.0%
N/A
N/A
N/A
0.0%
Dec-14A
N/A
819.9%
N/A
N/A
N/A
2.2%
Dec-15F
N/A
1012.8%
N/A
N/A
N/A
4.3%
Dec-16F
N/A
-11.8%
N/A
N/A
N/A
4.2%
Dec-17F
N/A
0.0%
N/A
N/A
N/A
4.5%
Key Ratios
EBITDA margins fluctuate depending
on the mix of construction vs
operation/ finance income (higher
margins)
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (HK$)
BVPS (HK$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Capex growth and water tariff growth
rates are the key drivers
87
Company Note
Singapore
S$0.91
S$1.02
S$1.02
13.1%
Reuters:
Bloomberg:
Market cap:
CAEP.SI
CMH SP
US$1,150m
S$1,624m
US$0.57m
S$0.80m
1,795m
18.1%
Being the only toll company with exposure to multiple provinces in China, CMHP
remains our preferred platform of toll investment.
We believe CMHP would continue to see strong support from China Merchant
Group (CMG), one of the top 10 SOEs directly under Chinas central government.
Our FY15-17F EPS have incorporated stepped-up interest cost, from 2.8% in FY15
to 3.5% in FY16, to 4.0% in FY17, to reflect the impact of potential Fed rate hikes.
1.200
122.7
1.100
116.0
1.000
109.3
0.900
102.7
0.800
6
96.0
With a 76% stake in CMHP, CMG is one of Chinas 10 largest central government
SOEs. We see CMHP as a key beneficiary from CMGs wide footprint across China
(CMG has a toll investment portfolio with total length of c.6,700 km in 16 provinces in
China). CMHP has also been receiving strong financial support from CMG, as evidenced
by CMGs irrevocable undertaking of full subscription of CMHPs 1-for-2 preferential
offering (at S$1.00 per share) related to the recent acquisition of three toll roads.
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.2
-1.7
3M
-0.6
-0.3
12M
-6.7
6.1
CMH completed the acquisitions of Yangping in Sep 2015, Guixing and Guiyang in Oct
2015. After the acquisitions, the number of toll roads of CMHPs portfolio has increased
from five to eight and the average remaining concession period of the portfolio increased
from previously 13.6 years to 16.0 years. According to a traffic consultants report, the
traffic volume of the three new toll roads is expected to grow by a five-year CAGR of
15% in FY15-20.
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (HK$m)
Operating EBITDA (HK$m)
Net Profit (HK$m)
Core EPS (HK$)
Core EPS Growth
FD Core P/E (x)
DPS (HK$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
1,886
1,462
607.5
0.71
40.9%
9.45
0.38
7.68%
6.34
9.51
28.6%
0.70
11.8%
Dec-14A
2,019
1,627
735.7
0.68
(4.4%)
9.18
0.38
7.68%
6.51
16.61
35.8%
0.81
10.3%
Dec-15F
2,266
1,812
642.8
0.45
(34.3%)
11.53
0.38
7.68%
10.43
NA
68.6%
0.85
6.8%
0%
1.02
Dec-16F
2,765
2,148
650.0
0.34
(23.4%)
14.46
0.33
6.59%
9.50
10.47
62.3%
0.86
5.9%
0%
0.87
Dec-17F
3,027
2,354
723.6
0.38
11.5%
12.97
0.35
7.14%
8.29
9.37
54.7%
0.85
6.6%
0%
0.84
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-1.7
-0.3
6.1
Absolute
-6.2
-0.6
Major shareholders
China Merchants Group LTD
-6.7
P/BV vs ROE
1.400
14.0%
1.200
12.0%
1.000
10.0%
% held
0.800
8.0%
75.9
0.600
6.0%
0.400
4.0%
0.200
2.0%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Liu Qiang
6.0
1.9
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
30.0%
23.9%
17.8%
11.7%
5.6%
-0.6%
-6.7%
-12.8%
-18.9%
-25.0%
ROE (rhs)
Dec-13A
1,939
1,098
1,462
(477)
985
(154)
248
22
1,049
Dec-14A
2,133
1,226
1,627
(506)
1,121
(125)
264
24
1,172
Dec-15F
2,330
1,359
1,812
(564)
1,248
(178)
236
24
1,268
Dec-16F
2,775
1,588
2,148
(684)
1,465
(370)
243
24
1,352
Dec-17F
3,037
1,736
2,354
(747)
1,607
(384)
244
20
1,477
1,101
(253)
49
897
(283)
(6)
1,284
(289)
64
1,060
(320)
(4)
1,329
(333)
0
997
(354)
0
1,362
(347)
0
1,014
(364)
0
1,487
(388)
0
1,099
(375)
0
607
513
564
736
563
604
643
581
595
650
640
640
724
714
714
Cash Flow
(HK$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
1,462
0
(28)
6
371
(406)
(101)
(198)
1,107
(17)
0
0
310
293
(839)
0
Dec-14A
1,627
0
88
2
404
(475)
(69)
(367)
1,209
(50)
356
(1,051)
476
(269)
(607)
25
Dec-15F
1,812
0
(497)
0
498
(497)
(176)
(162)
978
(23)
0
(4,029)
306
(3,746)
861
0
Dec-16F
2,148
0
99
0
618
(617)
(381)
(333)
1,534
(23)
0
0
270
247
(897)
0
Dec-17F
2,354
0
55
0
681
(684)
(395)
(347)
1,664
(23)
0
0
244
221
(897)
0
(421)
(6)
(750)
(4)
(1,100)
0
(967)
0
(951)
0
(1,266)
134
561
1,516
(1,335)
(395)
334
1,034
(238)
(3,006)
(1,906)
(2,612)
(1,864)
(83)
884
2,142
(1,848)
37
988
2,260
89
BY THE NUMBERS
Balance Sheet
(HK$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
1,448
71
1
512
2,032
9,472
1,927
0
0
11,400
249
Dec-14A
1,049
200
1
0
1,250
12,638
1,702
0
0
14,341
402
Dec-15F
1,256
227
1
0
1,484
22,986
1,632
0
0
24,619
897
Dec-16F
1,173
277
1
0
1,450
22,326
1,606
0
0
23,932
897
Dec-17F
1,210
303
1
0
1,513
21,602
1,606
0
0
23,207
897
482
807
1,538
3,419
633
660
1,695
3,845
631
479
2,008
9,568
772
494
2,163
8,671
845
535
2,277
7,774
0
3,419
713
5,671
5,109
2,652
7,761
160
4,005
961
6,661
6,374
2,556
8,930
134
9,701
961
12,670
10,822
2,611
13,433
107
8,778
961
11,902
10,812
2,668
13,480
81
7,855
961
11,093
10,901
2,727
13,628
Dec-13A
30.6%
36.2%
74.8%
(3.09)
7.11
6.07
23.0%
57%
14.44
0.36
202.1
7.76%
7.67%
6.82%
Dec-14A
7.1%
7.4%
75.0%
(3.06)
6.10
8.08
22.5%
71%
24.45
0.36
224.6
8.63%
7.68%
6.74%
Dec-15F
12.2%
15.6%
77.3%
(4.94)
5.81
6.66
25.0%
122%
34.34
0.36
237.6
7.71%
6.09%
5.13%
Dec-16F
22.1%
22.2%
77.3%
(4.50)
5.80
3.94
25.5%
95%
33.29
0.30
216.2
4.94%
5.95%
4.98%
Dec-17F
9.5%
9.6%
77.4%
(4.00)
5.85
4.16
26.1%
93%
34.92
0.27
226.9
5.61%
6.76%
5.50%
Dec-13A
30.0%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
6.6%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
12.5%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
22.3%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
9.5%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (HK$)
BVPS (HK$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Avg daily traffic grth (%, main)
Base tollrate/km (% chg, main)
Base tollrate/vehicle (%chg, main)
Avg daily traffic grth (%, 2ndary)
Base tollrate/km (% chg, 2ndary)
Base tollrate/vehicle (%chg, 2ndary)
Avg daily traffic grth (%, tertiary)
Base tollrate/km (% chg, tertiary)
Base tollrate/vehicle (%chg, tertiary)
90
Company Note
Singapore
CITIC Envirotech
Current price:
Target price:
Previous target:
Up/downside:
S$1.45
S$1.80
S$1.80
24.2%
Reuters:
Bloomberg:
Market cap:
CITI.SI
CEL SP
US$1,157m
S$1,635m
US$0.47m
S$0.67m
1,127m
7.7%
CEL has the makings of a long-term winner in Chinas water sector: SOE backing,
financing power, considerable track record and technological edge in MBR.
Upstream move into membrane production to benefit from Chinas 13 5-year plan.
th
1.900
126.0
1.700
114.3
1.500
102.7
1.300
15
91.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
4.7
9.2
3M
-6.5
-6.2
12M
-9.4
3.4
Given its strategic focus on industrial WWT, CEL typically enjoys a higher IRR of 1215%, vs. IRR of 8-10% for municipal WWT projects. While we expect stiffer competition
in the WWT landscape with an increasing number of SOEs being involved in the
business (CEWL, SIIC etc.) to weigh on project IRRs, CEL continues to deliver project
wins like its recent PPP project (worth c.Rmb549m) in Liaoyang City, China and MBR
WWT plant (Rmb400m) in Gansu Province, China.
Maintain Add
CEL remains on track to achieve our capex assumptions of S$225m for FY15, and
S$250m p.a. in FY16-17. We maintain our Add rating with a DCF-based target price of
S$1.80 (WACC: 6%). Key risk is lumpy EPC revenue, while catalysts are faster-thanexpected acquisitions/project wins and tariff hikes.
[X]
Financial Summary
Analysts
NGOH Yi Sin
T (65) 6210 8604
E yisin.ngoh@cimb.com
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
198.1
50.4
22.41
0.040
(17.0%)
46.03
0.005
0.311%
19.25
34.2
51.2%
2.90
8.24%
Dec-14A
312.8
91.7
49.61
0.043
7.5%
37.16
0.003
0.241%
16.46
456.1
37.7%
2.13
8.11%
Dec-15F
326.1
106.7
40.60
0.041
(4.9%)
36.98
0.006
0.396%
17.77
9.6
40.2%
1.92
5.50%
Dec-16F
432.6
155.6
58.19
0.052
26.5%
28.91
0.003
0.207%
14.02
146.5
53.9%
1.80
6.62%
0.79
Dec-17F
524.0
189.8
76.58
0.068
31.6%
21.97
0.003
0.207%
12.35
NA
65.6%
1.67
8.12%
0.83
Powered by
EFA
BY THE NUMBERS
P/BV vs ROE
1M
3M
12M
3.50
14.0%
60.0
140%
Relative
9.2
-6.2
3.4
3.00
12.0%
50.0
107%
Absolute
4.7
2.50
10.0%
-6.5
-9.4
40.0
73%
2.00
8.0%
1.50
6.0%
30.0
40%
1.00
4.0%
20.0
7%
0.50
2.0%
10.0
-27%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Major shareholders
% held
CITIC Limited
55.0
23.8
5.1
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-60%
ROE (rhs)
Dec-13A
202.3
94.8
50.4
(5.2)
45.2
(15.7)
3.6
0.0
33.2
Dec-14A
317.7
151.9
91.7
(11.4)
80.3
(25.0)
1.9
10.7
67.9
Dec-15F
337.2
198.0
106.7
(19.1)
87.6
(33.6)
0.3
3.5
57.9
Dec-16F
432.6
263.1
155.6
(33.6)
122.0
(35.3)
0.0
0.0
86.7
Dec-17F
524.0
320.7
189.8
(45.4)
144.4
(35.7)
0.0
0.0
108.8
33.2
(9.7)
67.9
(15.7)
57.9
(14.0)
86.7
(25.2)
108.8
(29.7)
23.5
(1.1)
52.2
(2.6)
43.9
(3.3)
61.5
(3.3)
79.1
(2.5)
22.4
22.1
28.8
49.6
36.8
42.4
40.6
42.9
44.2
58.2
58.2
58.2
76.6
76.6
76.6
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
50.4
Dec-14A
91.7
Dec-15F
106.7
Dec-16F
155.6
Dec-17F
189.8
16.4
(77.7)
(27.6)
(18.8)
(28.9)
6.3
(0.8)
(11.3)
(3.3)
57.7
(111.5)
(1.8)
(0.4)
14.9
(98.8)
86.5
12.2
36.3
(0.3)
(20.4)
(5.1)
24.5
(130.4)
6.2
(16.9)
3.4
(137.7)
113.7
1.6
12.8
(0.0)
(32.3)
(11.0)
48.6
(260.4)
1.5
(31.7)
0.0
(290.6)
412.5
58.7
0.0
0.0
(35.3)
(25.2)
76.4
(254.9)
0.0
0.0
0.0
(254.9)
190.0
0.0
0.0
0.0
(35.7)
(29.7)
95.6
(252.8)
0.0
0.0
0.0
(252.8)
102.5
0.0
(2.6)
(2.8)
(6.3)
(3.4)
(3.4)
0.0
96.1
55.0
45.3
(29.1)
(0.1)
112.4
(0.8)
0.5
(91.6)
(0.0)
464.9
222.9
170.5
(203.6)
0.0
186.6
8.1
11.5
(141.6)
0.0
99.1
(58.2)
(54.8)
(120.0)
92
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
121
164
0
3
288
364
70
1
9
444
20
Dec-15F
347
267
13
33
660
864
0
255
36
1,155
200
Dec-16F
164
318
14
8
504
1,081
0
255
36
1,373
60
Dec-17F
106
373
15
10
504
1,286
0
255
36
1,578
40
178
40
268
236
75
0
311
22
601
610
27
637
176
23
398
503
0
0
503
27
928
852
35
887
209
23
292
613
0
0
613
27
932
906
38
945
237
23
299
736
0
0
736
27
1,062
980
41
1,020
Dec-13A
23.3%
17.1%
25.5%
(0.27)
0.50
2.75
29.2%
11.6%
172.4
1.35
236.2
11.4%
8.9%
5.80%
Dec-14A
57.9%
81.9%
29.3%
(0.28)
0.68
3.07
23.1%
5.6%
168.3
11.55
222.9
16.6%
10.1%
7.41%
Dec-15F
4.2%
16.3%
32.7%
(0.32)
0.76
2.21
24.2%
15.5%
214.1
29.73
270.9
8.3%
6.8%
4.48%
Dec-16F
32.7%
45.9%
36.0%
(0.45)
0.80
3.31
29.1%
5.8%
188.1
28.50
244.0
8.0%
7.6%
4.92%
Dec-17F
21.1%
22.0%
36.2%
(0.59)
0.87
3.88
27.3%
4.4%
191.8
26.13
257.7
8.1%
8.4%
5.49%
Dec-13A
N/A
141
N/A
N/A
59.7%
N/A
N/A
0.0%
N/A
N/A
Dec-14A
N/A
185
N/A
N/A
61.1%
N/A
N/A
0.0%
N/A
N/A
Dec-15F
N/A
148
N/A
N/A
43.5%
N/A
N/A
-11.3%
N/A
N/A
Dec-16F
N/A
180
N/A
N/A
40.9%
N/A
N/A
9.5%
N/A
N/A
Dec-17F
N/A
220
N/A
N/A
22.4%
N/A
N/A
10.9%
N/A
N/A
126
13
159
134
125
0
259
7
425
297
11
307
Dec-14A
121
254
10
26
410
587
19
193
29
828
49
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
(S$m)
Outstanding Orderbook
Order Book Depletion
Orderbook Replenishment
ASP/tariff (% chg, main prod/serv)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP/tariff (%chg, 2ndary prod/serv)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
Non Revenue Water (NRW, %)
93
Company Note
Singapore
City Developments
Attractive valuations
Current price:
Target price:
Previous target:
Up/downside:
S$7.15
S$10.47
S$10.47
46.4%
Reuters:
Bloomberg:
Market cap:
CTDM.SI
CIT SP
US$4,602m
S$6,502m
US$7.69m
S$10.83m
954.3m
42.5%
Deepening UK footprint
No change.
Price Close
The recent acquisition of the sizeable 22-acre Stag Brewery site in Mortlake would
further add to the groups overseas diversification strategy. This mixed-use development
will accommodate a major residential project, a new school, a hotel and other
employment and leisure uses. When completed, it would create a completely new
riverside residential belt for Richmond with new, green parkland. The planning and
consultation process will begin in early 2016 and planning approval is expected to be
granted in 1Q18. We have not factored in any enhancement to RNAV from this
development
10.70
104.2
9.70
98.7
8.70
93.1
7.70
87.6
6.70
15
82.0
Hotel operations, through M&C, saw a 32% dip in 3Q15 PBT to S$59.2, with PBT
margins slipping 6.2% pts to 13.5% due to Asia hotels weaker performance and
pressure from higher operating costs. This led to portfolio revPAR falling 1.4% yoy to
77.66 as Singapore saw per room revenue declining 7.5% while the rest of Asia lost
10.9%. To unlock value from its hotel real estate, it plans to redevelop some US hotels
and its Seoul land parcel and undertake AEI for its Auckland property over the next 2-3
years.
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.7
-6.2
3M
-14.9
-14.6
12M
-27.9
-15.1
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
3,162
837
683
0.46
(4.7%)
15.48
0.16
2.24%
13.75
4.46
26.5%
0.83
5.7%
Dec-14A
3,764
1,122
968
0.70
51.9%
10.19
0.16
2.24%
8.69
4.84
5.3%
0.81
8.0%
Dec-15F
3,462
1,040
600
0.63
(11.0%)
11.44
0.19
2.62%
10.08
27.22
7.0%
0.77
6.9%
1.02
Dec-16F
3,770
1,178
655
0.69
9.8%
10.42
0.21
2.88%
9.43
NA
10.6%
0.73
7.2%
1.02
Dec-17F
6,327
1,874
1,153
1.21
76.1%
5.92
0.36
5.07%
5.47
5.81
1.4%
0.68
11.9%
1.72
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-6.2
-14.6
-15.1
Absolute
-10.7
-14.9
-27.9
Major shareholders
% held
Hong Leong
35.3
Aberdeen
22.2
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
10.00%
8.89%
7.78%
6.67%
5.56%
4.44%
3.33%
2.22%
1.11%
0.00%
30.0
60.0%
25.0
45.0%
20.0
30.0%
15.0
15.0%
10.0
0.0%
5.0
-15.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-30.0%
ROE (rhs)
Dec-13A
3,162
1,673
837
(159)
678
(36)
68
0
710
183
892
(69)
Dec-14A
3,764
1,992
1,122
(200)
922
7
76
0
1,005
351
1,356
(203)
Dec-15F
3,462
1,832
1,040
(220)
820
(71)
97
0
846
4
850
(127)
Dec-16F
3,770
1,995
1,178
(247)
931
(82)
86
0
935
0
935
(140)
Dec-17F
6,327
3,348
1,874
(252)
1,622
(103)
123
0
1,643
0
1,643
(246)
823
(140)
0
1,153
(184)
0
723
(123)
0
795
(140)
0
1,396
(243)
0
683
441
441
968
670
670
600
596
596
655
655
655
1,153
1,153
1,153
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Dec-13A
837
Dec-14A
1,122
Dec-15F
1,040
Dec-16F
1,178
Dec-17F
1,874
(369)
(482)
834
(819)
139
(55)
122
(67)
(135)
334
(320)
(200)
261
(27)
(115)
560
(97)
190
(70)
(120)
(129)
1,745
(350)
243
(113)
(130)
(141)
217
(350)
231
(91)
(140)
(248)
1,764
(350)
0
534
214
980
0
0
(166)
0
236
139
711
0
0
(275)
0
(212)
(562)
(932)
0
0
(192)
0
(40)
(390)
(371)
0
0
(209)
0
55
(295)
(294)
0
0
(359)
(133)
(1,257)
(122)
(702)
(45)
(698)
(1,064)
(250)
302
739
95
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
2,739
Dec-14A
3,898
Dec-15F
3,845
Dec-16F
2,995
Dec-17F
3,818
1,635
8
4,498
8,880
3,566
0
0
5,253
8,820
968
1,589
11
4,832
10,329
4,918
0
0
4,453
9,371
2,233
1,544
9
3,936
9,334
5,048
0
0
6,301
11,349
2,333
1,798
10
4,721
9,524
5,151
0
0
6,463
11,614
2,148
2,929
17
4,631
11,394
5,248
0
0
6,454
11,703
2,001
1,313
231
2,512
4,479
1,463
261
3,957
2,233
1,283
332
3,948
2,333
1,475
361
3,984
2,148
2,416
607
5,023
2,001
492
4,971
0
7,483
8,233
1,983
10,216
2,735
4,968
0
8,925
8,410
2,365
10,776
2,735
5,068
0
9,016
8,831
2,836
11,667
2,735
4,882
0
8,866
9,290
2,983
12,272
2,735
4,735
0
9,758
10,097
3,242
13,339
Dec-13A
(5.7%)
(8.4%)
26.5%
(2.84)
8.63
10.08
7.8%
30.5%
162.6
2.12
287.7
5.20%
4.83%
4.05%
Dec-14A
19.0%
34.0%
29.8%
(0.60)
8.81
34.40
15.0%
47.1%
156.3
2.02
285.8
6.22%
6.19%
4.25%
Dec-15F
(8.0%)
(7.3%)
30.0%
(0.86)
9.25
6.83
14.9%
30.0%
165.1
2.28
307.4
4.95%
5.50%
3.86%
Dec-16F
8.9%
13.3%
31.3%
(1.36)
9.73
7.16
15.0%
30.0%
162.2
1.99
284.3
5.20%
5.95%
4.13%
Dec-17F
67.8%
59.1%
29.6%
(0.19)
10.58
11.58
15.0%
30.0%
136.3
1.65
238.3
8.45%
9.79%
6.71%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.0%
0.0%
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
42.0%
51.1%
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
38.4%
58.7%
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
41.4%
55.9%
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50.1%
48.3%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
96
Company Note
Singapore
ComfortDelGro
Lets go downtown
Current price:
Target price:
Previous target:
Up/downside:
S$3.05
S$3.17
S$3.17
4.0%
Reuters:
Bloomberg:
Market cap:
CMDG.SI
CD SP
US$4,642m
S$6,558m
US$9.95m
S$14.01m
2,110m
59.0%
The rise of Uber and GrabCar presents possible threats to CDGs taxi business.
Maintain Hold rating with target price of S$3.17, based on FY16 DCF.
3.10
128.0
2.90
119.0
2.70
110.0
2.50
101.0
2.30
20
15
10
5
92.0
Vol m
3.30
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.3
3.2
3M
6.6
6.9
12M
16.4
29.2
We believe that FY16 will be an eventful year for the groups Singapore bus business,
with the anticipated launch of the GCM by the Land Transport Authority (LTA) in Aug
2016. The tendering process for the three public bus packages is progressing smoothly.
We expect the sale of bus assets to occur in early-2016, after transfer of BSEP buses by
end-2015. In our view, the new model will unlock significant CDG capital that was
previously attached to buses and result in commercially-viable bus operating margins.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
3,748
763.7
263.2
0.12
5.3%
24.45
0.07
2.31%
9.23
24.92
(0.8%)
2.99
12.6%
Dec-14A
4,051
795.8
283.5
0.13
7.7%
22.70
0.08
2.74%
8.78
38.56
(3.1%)
2.94
13.1%
Dec-15F
4,140
831.8
297.2
0.14
4.8%
21.65
0.09
2.88%
8.53
23.26
(1.4%)
2.80
13.2%
0%
0.99
Dec-16F
4,184
857.0
336.4
0.16
13.2%
19.13
0.10
3.25%
6.80
6.87
(42.7%)
2.65
14.2%
0%
0.98
Dec-17F
4,167
838.5
358.6
0.17
6.6%
17.95
0.11
3.47%
6.80
15.01
(46.0%)
2.51
14.4%
0%
0.95
Powered by
EFA
BY THE NUMBERS
1M
3.2
-1.3
3M
6.9
6.6
12M
29.2
16.4
P/BV vs ROE
3.50
14.50%
3.00
14.07%
2.50
13.64%
25.0
14.0%
20.0
11.2%
8.4%
% held
2.00
13.21%
15.0
Blackrock
6.7
1.50
12.79%
10.0
5.6%
Capital Group
6.4
1.00
12.36%
5.0
2.8%
4.9
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Major shareholders
0.50
11.93%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
11.50%
ROE (rhs)
Dec-13A
3,748
1,091
764
(337)
426
(16)
4
0
414
0
414
(87)
Dec-14A
4,051
1,164
796
(354)
442
(10)
4
0
436
0
436
(92)
Dec-15F
4,140
1,200
832
(367)
465
(14)
4
0
455
0
455
(97)
Dec-16F
4,184
1,243
857
(349)
508
4
4
0
517
0
517
(108)
Dec-17F
4,167
4,167
838
(295)
544
4
4
0
552
0
552
(115)
327
(64)
0
344
(61)
0
358
(61)
0
408
(72)
0
437
(79)
0
263
263
263
284
284
284
297
297
297
336
336
336
359
359
359
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
764
(4)
6
Dec-14A
796
(4)
26
Dec-15F
832
(4)
(130)
Dec-16F
857
(4)
(18)
Dec-17F
838
(4)
(2)
(349)
360
(27)
(78)
670
(415)
0
(130)
14
(532)
120
0
0
(138)
(360)
360
(22)
(83)
713
(471)
0
(24)
11
(485)
(62)
0
0
(165)
(377)
393
(26)
(57)
632
(494)
0
0
0
(494)
140
0
0
(185)
(340)
357
(8)
(97)
747
(432)
1,224
0
0
792
(601)
0
0
(209)
(286)
303
(8)
(108)
732
(304)
0
0
0
(304)
0
0
0
(223)
7
(11)
128
258
166
(10)
(237)
(8)
167
250
0
(45)
92
277
163
0
(811)
728
937
1,547
0
(223)
206
429
437
98
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
831
334
71
5
1,240
2,777
71
687
310
3,845
218
Dec-14A
826
341
72
0
1,239
2,895
82
686
329
3,991
243
Dec-15F
917
339
71
0
1,328
3,023
86
686
329
4,123
261
Dec-16F
1,645
362
73
0
2,080
1,882
90
686
329
2,987
261
Dec-17F
1,851
361
73
0
2,285
1,891
94
686
329
2,999
261
665
179
1,063
590
837
178
1,258
494
704
218
1,183
616
711
230
1,202
14
708
236
1,205
14
146
735
493
2,290
2,155
640
2,795
143
637
497
2,392
2,190
649
2,839
143
759
497
2,438
2,302
710
3,012
143
157
497
1,856
2,429
782
3,211
143
157
497
1,859
2,564
861
3,425
Dec-13A
5.71%
3.86%
20.4%
0.01
1.02
15.56
21.0%
56.5%
11.68
8.83
89.73
10.9%
11.0%
6.86%
Dec-14A
8.10%
4.20%
19.6%
0.04
1.04
20.10
21.2%
62.3%
10.30
9.03
94.92
11.0%
11.1%
6.83%
Dec-15F
2.19%
4.52%
20.1%
0.02
1.09
17.67
21.3%
62.3%
10.25
8.90
95.63
11.7%
11.3%
6.92%
Dec-16F
1.06%
3.03%
20.5%
0.65
1.15
61.56
21.0%
62.3%
11.08
8.97
88.06
12.0%
12.4%
7.70%
Dec-17F
(0.40%)
(2.16%)
20.1%
0.75
1.22
65.85
20.8%
62.3%
12.07
N/A
N/A
18.9%
13.6%
8.38%
Dec-13A
N/A
8.2%
N/A
7.5%
Dec-14A
N/A
10.4%
N/A
19.5%
Dec-15F
N/A
4.2%
N/A
5.1%
Dec-16F
N/A
-1.0%
N/A
21.1%
Dec-17F
N/A
0.0%
N/A
0.0%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Avg fare/trip (%chg,main prod/serv)
Ridership grth (%,main prod/serv)
Avg fare/trip (%chg,2ndary prod/serv)
Ridership grth (%,2ndary prod/serv)
99
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.79
S$1.00
S$1.00
26.8%
Reuters:
Bloomberg:
Market cap:
CROE.SI
CRT SP
US$356.2m
S$503.3m
US$0.54m
S$0.77m
519.0m
89.5%
No change.
Price Close
1.000
114.0
0.900
108.7
0.800
103.3
0.700
6
98.0
An estimated 95% of rentals are locked in for FY16 and 92% in FY17. As such, CRT has
a minimal 5.2% of rental income to be renewed in FY16 and 3.1% in FY17. This
provides the trust with strong earnings visibility. With about one-third of its leases having
a variable rent component and low occupancy cost in the high single digits, we believe
that income growth could be derived from higher shopper footfall and spending.
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.3
0.2
3M
-7.1
-6.8
12M
-11.2
1.6
CRTs projected bottomline growth will come from a full years contribution from Ones
Mall and the Torius property. The latter was bought in Oct 15 at an NPI yield of 7.8%.
With compressing cap rates amid a buoyant property market, acquisition opportunities
should likely come from second tier cities. With a post-rights gearing of 46.5%, we
believe that any new purchases will have to be funded by a combination of debt and
equity.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Jun-14A
6,222
3,841
999
3,180
2.32
0%
29.60
7.37
10.7%
51.7%
75.08
0.92
Jun-15A
7,520
4,792
1,077
3,358
2.27
(2%)
30.32
6.47
9.4%
47.3%
83.99
0.82
2.84%
Jun-16F
8,977
5,400
3,187
3,866
5.71
152%
12.04
6.47
9.4%
46.6%
82.41
0.83
6.87%
1.04
Jun-17F
9,649
5,741
3,546
4,155
5.65
(1%)
12.16
6.33
9.2%
46.7%
74.54
0.92
7.22%
1.00
Jun-18F
9,703
5,773
3,573
4,183
5.39
(5%)
12.75
6.25
9.1%
46.8%
72.82
0.94
7.32%
1.02
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
0.2
-6.8
Absolute
-4.3
-7.1
Major shareholders
12M
1.6
-11.2
% held
8.0
AR Capital
6.3
1.200
53.0%
1.000
51.5%
0.800
50.0%
0.600
48.5%
0.400
47.0%
0.200
45.5%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
44.0%
7.60
7.40
7.20
7.00
6.80
6.60
6.40
6.20
6.00
5.80
5.60
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
12.0%
10.8%
9.6%
8.4%
7.2%
6.0%
4.8%
3.6%
2.4%
1.2%
0.0%
Jun-14A
5,245
977
6,222
(2,380)
3,841
0
(565)
(22)
0
3,255
0
3,255
(705)
0
Jun-15A
6,102
1,418
7,520
(2,728)
4,792
0
(603)
(24)
0
4,165
0
4,165
(1,001)
0
Jun-16F
7,260
1,717
8,977
(3,578)
5,400
0
(751)
(26)
0
4,622
0
4,622
(1,005)
0
Jun-17F
7,810
1,839
9,649
(3,908)
5,741
0
(681)
(26)
0
5,034
0
5,034
(1,021)
0
Jun-18F
7,862
1,840
9,703
(3,930)
5,773
0
(682)
(26)
0
5,065
0
5,065
(1,021)
0
2,550
(1,551)
3,164
(2,087)
3,618
(431)
4,013
(468)
4,044
(471)
999
3,180
1,077
3,358
3,187
3,866
3,546
4,155
3,573
4,183
Jun-16F
3,618
1,005
128
(255)
676
5,170
(9,373)
0
0
(9,373)
4,000
5,922
(3,866)
1
6,057
1,855
(4,202)
(1,208)
Jun-17F
4,013
1,021
64
(431)
668
5,335
(25)
0
0
(25)
0
0
(4,155)
1
(4,155)
1,155
5,311
4,289
Jun-18F
4,044
1,021
5
(468)
668
5,270
(25)
0
0
(25)
0
0
(4,183)
1
(4,182)
1,063
5,246
4,224
Cash Flow
(m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
Jun-14A
2,550
705
1,328
(148)
(6,614)
(2,179)
(66,053)
0
0
(66,053)
14,428
29,404
(1,810)
22,259
64,280
(3,953)
(68,230)
(54,510)
Jun-15A
3,164
1,001
(344)
(173)
(5,939)
(2,291)
(11,712)
0
0
(11,712)
5,634
6,108
(3,101)
3
8,645
(5,357)
(13,999)
(9,369)
101
BY THE NUMBERS
Balance Sheet
(m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Jun-14A
69,870
0
2,335
72,205
5,509
Jun-15A
87,930
0
5,063
92,993
6,242
Jun-16F
97,303
0
5,063
102,366
6,827
Jun-17F
97,328
0
5,063
102,391
6,627
Jun-18F
97,353
0
5,063
102,416
6,334
708
129
6,346
885
358
681
1,924
40,244
3,990
44,234
32,394
0
0
32,394
491
675
7,408
1,219
647
914
2,781
46,840
7,194
54,034
43,586
0
0
43,586
578
675
8,080
1,434
647
1,090
3,170
50,840
7,194
58,034
49,241
0
0
49,241
621
675
7,923
1,541
647
1,127
3,315
50,840
7,194
58,034
48,965
0
0
48,965
624
675
7,634
1,549
647
1,130
3,326
50,840
7,194
58,034
48,689
0
0
48,689
Jun-14A
0.0%
0.0%
61.7%
0.0%
4.60
60.8%
0.74%
3.30
3.30
2.86
N/A
Jun-15A
20.9%
24.7%
63.7%
(12.2%)
4.15
66.0%
0.60%
2.66
2.66
2.24
1.20%
Jun-16F
19.4%
12.7%
60.1%
(0.0%)
4.60
11.9%
0.20%
2.55
2.55
2.15
3.02%
Jun-17F
7.5%
6.3%
59.5%
(2.2%)
4.93
11.7%
0.18%
2.39
2.39
2.00
3.21%
Jun-18F
0.6%
0.5%
59.5%
(1.1%)
4.96
11.6%
0.18%
2.29
2.29
1.90
3.24%
Jun-14A
2,207.1
N/A
N/A
198,048
100.0%
69,870.0
N/A
Jun-15A
2,026.7
N/A
N/A
250,892
100.0%
87,930.0
N/A
Jun-16F
1,845.0
N/A
N/A
327,924
100.0%
97,303.2
N/A
Jun-17F
1,984.8
N/A
N/A
327,924
100.0%
97,328.2
N/A
Jun-18F
1,998.0
N/A
N/A
327,924
100.0%
97,353.2
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm ()
Acq. (less development) (US$m)
RevPAR ()
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) ()
Funds Under Management (m) ()
102
Company Note
Singapore
CWT Limited
Current price:
Target price:
Previous target:
Up/downside:
S$1.92
S$1.98
S$1.98
3.4%
Reuters:
Bloomberg:
Market cap:
CWTD.SI
CWT SP
US$813.7m
S$1,150m
US$0.49m
S$0.70m
600.3m
40.0%
Price Close
141.0
2.00
127.0
1.80
113.0
1.60
99.0
1.40
10
85.0
Vol m
155.0
2.20
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
We think CWT could be worth S$2.54/share in such a scenario, though it could take
time to materialise as no potential buyer has been singled out.
2.40
Dec-14
1M
-4.3
0.2
3M
-2.1
-1.8
12M
20.1
32.9
2015 saw the effect of lower commodity prices hitting CWTs topline, though gross profit
is a better indication of its traded volumes as it earns a locked-in spread on each trade.
CWT also saw the impact of lower naphtha volumes and lower demand for copper
concentrates in China, though the latter has somewhat stabilised in 3Q15. Going into
2016, there is little clarity on volumes, though continued volatility in commodity prices
will allow CWTs traders to lock in better profits.
Could be worth S$2.54 in a buyout scenario, but will still take time
We estimate that previous logistics M&A transactions were carried out at 22.4x historical
P/E. Applying this figure to CWTs estimated FY14 logistics net profit, CWTs shares
could be worth up to S$2.54 apiece (implies 20x FY17 logistics P/E) just for the logistics
business alone. We think the logistics business is CWTs prized possession, and a
motivated buyer would ascribe little value to the commodity marketing, financial services
and engineering segments.
Potential bidders
News sources report that potential bidders for CWT include PE firms Bain Capital,
Blackstone, KKR, and Japanese logistics companies Japan Post and Nippon Express.
According to Bloomberg, CWTs controlling shareholder, C&P Holdings, the Loi family
and directors of C&P Holdings have a combined 62.1% stake in CWT, hence a stake
sale would trigger a general offer for all the shares. We continue to believe a buyout may
take time to materialise, as CWT has not announced the start of any formal processes.
Maintain Hold
We maintain our Hold call on CWT, with a SOP-based target price of S$1.98. We see a
decent potential upside in a buyout scenario; however, we think that a buyout will still
take time to materialise, and a longer wait could lead to some pressure on the share
price in the near term.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
9,097
110.3
94.6
0.18
(1.80%)
10.85
0.035
1.83%
19.44
NA
145%
1.74
17.1%
Dec-14A
15,194
150.0
111.9
0.19
6.07%
10.23
0.040
2.09%
14.89
11.47
138%
1.50
15.8%
Dec-15F
8,324
128.3
109.3
0.18
(5.62%)
10.84
0.070
3.66%
16.31
3.26
111%
1.41
13.4%
0%
1.01
Dec-16F
8,697
146.2
113.7
0.19
7.13%
10.11
0.040
2.09%
15.69
NA
122%
1.29
13.3%
0%
0.92
Dec-17F
8,968
154.2
118.5
0.20
4.29%
9.70
0.040
2.09%
15.06
14.80
114%
1.18
12.7%
0%
0.99
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
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BY THE NUMBERS
1M
3M
12M
Relative
0.2
-1.8
32.9
Absolute
-4.3
-2.1
20.1
Major shareholders
C&P Holdings Pte Ltd
% held
31.9
17.0
5.4
P/BV vs ROE
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
14.0
300%
12.0
243%
10.0
186%
8.0
129%
6.0
71%
4.0
14%
2.0
-43%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-100%
ROE (rhs)
Dec-13A
9,097
292
110
0
110
(13)
10
8
116
Dec-14A
15,194
331
150
0
150
(37)
12
7
132
Dec-15F
8,324
335
128
0
128
(25)
13
17
134
Dec-16F
8,697
337
146
0
146
(34)
14
12
138
Dec-17F
8,968
349
154
0
154
(37)
15
13
145
116
(8)
(11)
97
(2)
132
(18)
(1)
113
(1)
134
(21)
3
115
(6)
138
(19)
0
120
(6)
145
(20)
0
125
(6)
95
106
106
112
112
112
109
106
106
114
114
114
119
119
119
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
110.3
Dec-14A
150.0
Dec-15F
128.3
Dec-16F
146.2
Dec-17F
154.2
(484.2)
168.7
131.4
(155.8)
(29.8)
(24.2)
19.0
(7.6)
(386.6)
(181.0)
35.1
(26.7)
4.7
(167.9)
506.5
0.0
(27.8)
17.2
(12.0)
296.0
(111.4)
5.2
(20.5)
(61.8)
(188.5)
(7.3)
0.0
38.2
24.7
(21.4)
301.3
(83.2)
0.0
0.0
32.7
(50.6)
101.4
0.0
31.0
34.0
(18.7)
36.7
(173.9)
0.0
0.0
27.6
(146.3)
17.2
0.0
32.9
37.2
(20.3)
174.2
(134.5)
0.0
0.0
26.5
(108.0)
11.5
0.0
(21.1)
(23.4)
(42.4)
(24.0)
(24.0)
65.7
551.0
(3.5)
(48.1)
(587.1)
65.0
34.3
141.9
100.2
73.7
(57.4)
1.6
252.3
352.2
193.4
(61.6)
(68.4)
(178.0)
(92.4)
(171.3)
(63.8)
(76.3)
(10.1)
77.7
2.5
104
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
197
2,152
825
116
3,290
495
58
128
91
771
1,116
Dec-14A
342
2,103
771
219
3,435
572
61
136
152
921
873
Dec-15F
591
2,098
415
219
3,323
619
61
130
152
962
974
Dec-16F
413
2,192
434
219
3,258
749
61
121
152
1,083
992
Dec-17F
403
2,260
447
219
3,330
835
61
112
152
1,160
1,003
1,832
139
3,087
77
1,940
111
2,924
558
1,710
111
2,796
558
1,668
111
2,771
558
1,720
111
2,834
558
166
243
44
3,374
660
28
687
33
591
50
3,565
765
26
791
33
591
50
3,437
816
33
849
33
591
50
3,411
892
39
930
33
591
50
3,475
971
45
1,016
Dec-13A
68.6%
24.3%
1.21%
(1.66)
1.10
2.46
6.6%
15.9%
63.63
24.11
52.58
7.66%
8.74%
4.03%
Dec-14A
67.0%
36.0%
0.99%
(1.81)
1.27
2.45
13.5%
16.1%
51.10
19.60
46.32
6.78%
8.30%
3.86%
Dec-15F
(45.2%)
(14.4%)
1.54%
(1.57)
1.36
2.24
16.0%
33.3%
92.10
27.10
83.40
5.60%
6.85%
3.57%
Dec-16F
4.5%
13.9%
1.68%
(1.89)
1.49
2.37
13.5%
18.1%
90.27
18.57
73.95
6.70%
7.01%
3.86%
Dec-17F
3.1%
5.5%
1.72%
(1.93)
1.62
2.42
14.0%
17.3%
90.61
18.66
71.74
6.13%
7.01%
3.99%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
N/A
105
Company Note
Singapore
Dragged by poor ASEAN, all formats of Dairy Farm faced margin pressure in 1H15.
DAIR.SI
DFI SP
US$7,870m
US$7,870m
US$3.32m
US$3.32m
1,350m
22.0%
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Average daily turnover:
Current shares o/s
Free float:
Key changes in this note
No change.
Price Close
10.40
108.0
9.40
101.0
8.40
94.0
7.40
87.0
6.40
80.0
5.40
15
73.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-5.5
-1.0
3M
-4.6
-4.3
12M
-37.4
-24.6
[X]
Financial Summary
Analyst
YEO Zhi Bin
T (65) 6210 8669
E zhibin.yeo@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
10,357
747.4
500.9
0.36
8.1%
16.38
0.23
3.95%
9.30
23.34
(46.3%)
6.14
38.8%
Dec-14A
11,008
736.8
509.1
0.37
4.1%
15.74
0.23
3.95%
9.64
29.82
(31.2%)
5.51
36.9%
Dec-15F
11,624
673.2
456.7
0.34
(8.4%)
17.19
0.23
3.95%
11.09
48.64
52.6%
5.00
30.5%
0%
1.02
Dec-16F
12,136
733.9
505.6
0.37
10.4%
15.56
0.23
3.95%
10.00
29.51
44.1%
4.45
30.2%
0%
1.04
Dec-17F
12,670
803.5
567.6
0.42
12.3%
13.86
0.26
4.47%
8.88
23.37
33.3%
3.90
30.0%
0%
1.03
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-1.0
-4.3
-24.6
Absolute
-5.5
-4.6
Major shareholders
Jardine Strategic Holdings
-37.4
% held
77.6
Franklin Resources
7.4
2.1
P/BV vs ROE
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
70.0%
62.2%
54.4%
46.7%
38.9%
31.1%
23.3%
15.6%
7.8%
0.0%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
20.0%
15.6%
11.3%
6.9%
2.5%
-1.9%
-6.3%
-10.6%
-15.0%
ROE (rhs)
Dec-13A
10,357
3,087
747
(196)
551
(3)
67
0
615
0
615
(102)
Dec-14A
11,008
3,291
737
(203)
534
(2)
69
0
601
0
601
(93)
Dec-15F
11,624
3,394
673
(221)
452
(14)
98
0
536
0
536
(86)
Dec-16F
12,136
3,616
734
(231)
503
(22)
118
0
600
0
600
(96)
Dec-17F
12,670
3,776
804
(241)
563
(20)
130
0
673
0
673
(108)
513
(12)
508
1
451
6
504
2
566
2
501
480
480
509
500
500
457
458
458
506
506
506
568
568
568
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
747
45
(11)
0
Dec-14A
737
48
(17)
4
Dec-15F
673
47
(294)
0
Dec-16F
734
47
29
Dec-17F
804
47
39
(4)
(95)
683
(336)
51
0
(1)
(94)
676
(439)
30
(24)
(14)
(86)
326
(1,250)
0
(114)
(22)
(96)
692
(325)
0
0
(20)
(108)
762
(325)
0
0
(285)
(61)
0
(433)
21
0
(1,364)
1,200
0
(325)
(100)
0
(325)
(100)
0
(311)
(311)
(311)
(311)
(318)
56
(316)
82
337
409
(2)
(293)
(50)
264
252
0
889
(149)
162
(1,022)
0
(411)
(44)
267
391
0
(418)
19
337
460
107
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
728
213
976
14
1,931
1,082
376
408
168
2,032
48
Dec-14A
662
252
1,011
5
1,930
1,219
393
566
207
2,386
93
Dec-15F
513
159
902
5
1,579
1,413
1,369
591
207
3,580
333
Dec-16F
468
166
934
5
1,574
1,482
1,441
616
207
3,746
283
Dec-17F
487
174
975
5
1,641
1,541
1,524
641
207
3,914
233
2,309
69
2,426
43
2,413
59
2,566
94
1,916
59
2,309
1,054
1,984
59
2,327
1,004
2,071
59
2,364
954
17
60
100
2,586
1,281
96
1,377
17
110
118
2,794
1,429
94
1,523
17
1,070
118
3,497
1,574
88
1,662
17
1,020
118
3,465
1,769
86
1,855
17
970
118
3,452
2,019
84
2,103
Dec-13A
5.68%
11.4%
7.22%
0.47
0.95
51.52
16.6%
62.1%
7.20
48.56
115.1
90.6%
37.2%
13.2%
Dec-14A
6.28%
(1.4%)
6.69%
0.35
1.06
62.09
15.5%
61.1%
7.71
46.99
111.7
92.1%
32.5%
12.3%
Dec-15F
5.59%
(8.6%)
5.79%
(0.65)
1.16
28.27
16.0%
68.1%
6.46
42.42
96.0
47.6%
18.4%
9.8%
Dec-16F
4.40%
9.0%
6.05%
(0.61)
1.31
20.97
16.0%
61.5%
4.91
39.43
83.8
32.1%
15.9%
10.0%
Dec-17F
4.40%
9.5%
6.34%
(0.52)
1.49
24.47
16.0%
61.9%
4.89
39.16
83.2
34.2%
17.1%
10.7%
Dec-13A
N/A
3.5%
4,863
N/A
N/A
N/A
N/A
N/A
Dec-14A
N/A
4.6%
4,982
N/A
N/A
N/A
N/A
N/A
Dec-15F
N/A
4.5%
5,001
N/A
N/A
N/A
N/A
N/A
Dec-16F
N/A
2.6%
5,115
N/A
N/A
N/A
N/A
N/A
Dec-17F
N/A
2.6%
5,229
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)
108
Company Note
Singapore
DBS Group
Current price:
Target price:
Previous target:
Up/downside:
S$16.61
S$19.58
S$19.58
17.9%
Reuters:
Bloomberg:
Market cap:
DBSM.SI
DBS SP
US$29,419m
S$41,563m
US$62.15m
S$87.61m
2,474m
70.3%
Price Close
19.0
101.1
17.0
96.6
15.0
30
92.0
Vol m
20
10
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
We expect the Manulife bancassurance deal to prop up fees in 2016, while the
loosening of capital controls in China could lead to demand for wealth services.
NPLs from the oil & gas services sector a concern; it is the only bank that has yet to
recognise NPLs in this segment despite having the biggest exposure.
Maintain Add, with a GGM-based target price of S$19.58 (1.16x CY16 P/BV).
21.0
Dec-14
1M
-4.6
-0.1
3M
-6.2
-5.9
12M
-14.8
-2.0
Among the Singapore banks, DBS has the biggest exposure to Greater China at 35% of
loans (OCBC: 28%, UOB: 12%) and 31% of PBT (OCBC: 20%, UOB, 10%) as at 9M15.
We think this will make it a key beneficiary of Chinas One Belt, One Road (OBOR)
policy. As China loosens its capital controls and allows for more foreign investments, we
think DBS can also tap the increased demand for wealth management (WM) services.
Since its acquisition of SocGen, DBS now has the largest WM AUM at S$103bn.
Maintain Add
At its current valuation of 1.0x CY16 P/BV, the market has already priced in slowing loan
growth, lower fees and higher credit costs, in our view. Even assuming higher credit
costs of 40bp in 2016 (vs. 25bp in 3Q15), we are confident that DBS is able to achieve
ROEs that exceed cost of equity, which should limit share price downside from here.
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Dec-13A
5,569
3,358
8,927
(770)
3,672
1.54
(3.2%)
10.67
0.58
3.49%
14.02
1.18
11.2%
Dec-14A
6,321
3,297
9,618
(667)
4,046
1.66
7.5%
9.89
0.58
3.49%
15.24
1.09
11.3%
Dec-15F
7,095
3,625
10,720
(692)
4,412
1.78
7.4%
9.27
0.69
4.15%
16.12
1.03
11.3%
0%
1.02
Dec-16F
7,534
3,802
11,336
(1,169)
4,238
1.68
(5.5%)
9.82
0.67
4.03%
16.93
0.98
10.2%
0%
0.94
Dec-17F
8,149
3,954
12,103
(971)
4,765
1.87
11.0%
8.84
0.74
4.46%
17.83
0.93
10.7%
0%
0.94
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
-0.1
-5.9
-2.0
Absolute
-4.6
-6.2
-14.8
Major shareholders
Temasek Holdings
% held
29.7
P/BV vs ROE
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
14.00%
12.25%
10.50%
8.75%
7.00%
5.25%
3.50%
1.75%
0.00%
14.0
30.0%
12.0
23.6%
10.0
17.1%
8.0
10.7%
6.0
4.3%
4.0
-2.1%
2.0
-8.6%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-15.0%
ROE (rhs)
Dec-13A
5,569
3,358
8,927
(3,918)
5,009
(770)
4,239
79
4,318
0
4,318
171
4,489
(615)
Dec-14A
6,321
3,297
9,618
(4,330)
5,288
(667)
4,621
79
4,700
0
4,700
198
4,898
(713)
Dec-15F
7,095
3,625
10,720
(4,899)
5,821
(692)
5,128
17
5,145
0
5,145
136
5,281
(755)
Dec-16F
7,534
3,802
11,336
(5,101)
6,235
(1,169)
5,066
18
5,084
0
5,084
0
5,084
(727)
Dec-17F
8,149
3,954
12,103
(5,447)
6,657
(971)
5,686
18
5,704
0
5,704
0
5,704
(816)
3,874
(202)
0
0
3,672
3,696
4,185
(139)
0
0
4,046
4,075
4,526
(114)
0
0
4,412
4,432
4,357
(119)
0
0
4,238
4,238
4,889
(123)
0
0
4,765
4,765
Dec-13A
83.7%
85.5%
91.3%
100.0%
61.9%
81.3%
15.6%
59.2%
0.166%
0.110%
0.25%
Dec-14A
85.6%
87.2%
89.3%
100.0%
62.5%
82.7%
15.4%
60.0%
0.173%
0.113%
0.16%
Dec-15F
88.7%
89.7%
89.6%
100.0%
64.0%
85.7%
16.0%
61.4%
0.175%
0.114%
0.30%
Dec-16F
88.7%
90.2%
90.5%
100.0%
64.4%
86.0%
16.6%
61.8%
0.274%
0.181%
0.50%
Dec-17F
88.7%
90.6%
90.5%
100.0%
64.8%
86.3%
17.2%
62.1%
0.203%
0.135%
0.40%
110
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
284,424
44,923
Dec-14A
313,767
46,689
Dec-15F
312,183
57,984
Dec-16F
323,985
59,678
Dec-17F
336,528
61,420
329,347
4,047
333,394
4,802
11,540
16,342
18,726
33,546
402,008
292,365
13,572
46,791
352,728
0
11,594
364,322
34,233
3,453
37,686
360,456
4,084
364,540
5,117
13,729
18,846
19,517
37,763
440,666
317,173
16,176
55,383
388,732
0
11,728
400,460
37,708
2,498
40,206
370,167
4,755
374,923
5,117
14,063
19,180
16,109
38,707
448,919
318,759
16,642
58,448
393,849
0
12,066
405,915
40,392
2,612
43,004
383,663
5,903
389,566
5,117
14,411
19,528
17,325
38,901
465,320
331,509
17,128
58,586
407,223
0
12,418
419,641
42,931
2,731
45,661
397,948
6,853
404,801
5,117
14,770
19,887
18,867
39,095
482,651
344,770
17,628
58,725
421,123
0
12,781
433,903
45,796
2,854
48,649
Key Ratios
Total Income Growth
Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio
Return On Average Assets
Dec-13A
4.9%
2.2%
8.0%
62.4%
0.75%
2.32%
1.56%
1.90%
2.46%
15.4%
1.48%
13.7%
40.5%
0.93%
Dec-14A
7.7%
5.6%
9.1%
65.7%
0.75%
2.38%
1.63%
1.99%
2.52%
12.6%
1.50%
14.6%
37.3%
0.91%
Dec-15F
11.5%
10.1%
7.8%
66.2%
0.70%
2.44%
1.74%
2.20%
2.63%
11.9%
1.60%
14.3%
40.4%
0.96%
Dec-16F
5.7%
7.1%
(3.7%)
66.5%
0.72%
2.50%
1.78%
2.25%
2.68%
18.7%
1.65%
14.3%
40.1%
0.93%
Dec-17F
6.8%
6.8%
12.2%
67.3%
0.75%
2.60%
1.86%
2.34%
2.78%
14.6%
1.72%
14.3%
39.9%
1.01%
Dec-13A
18.4%
1.6%
4.0%
43.9%
0.7%
140.4%
1.2%
13.7%
16.3%
15.3%
85.0%
1.2%
19.4%
Dec-14A
11.0%
1.7%
-1.8%
45.0%
0.5%
168.8%
1.1%
13.1%
15.3%
8.5%
86.9%
0.9%
7.5%
Dec-15F
4.1%
1.8%
9.9%
45.7%
0.5%
160.6%
1.1%
14.0%
16.1%
0.5%
90.2%
1.0%
6.8%
Dec-16F
4.0%
1.8%
4.9%
45.0%
0.9%
120.1%
1.2%
14.3%
16.3%
4.0%
90.4%
1.7%
7.5%
Dec-17F
4.1%
1.9%
4.0%
45.0%
0.9%
116.0%
1.2%
15.6%
17.5%
4.0%
90.7%
1.9%
4.0%
Key Drivers
Loan Growth (%)
Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)
111
Company Note
Singapore
Sweet 16?
S$0.29
S$0.49
S$0.49
69.7%
DMPL.SI
DELM SP
US$398.9m
S$563.5m
US$0.08m
S$0.11m
1,944m
26.5%
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Average daily turnover:
Current shares o/s
Free float:
Key changes in this note
No change.
Expects a turnaround in FY16 even after factoring in the hefty interest expense.
Needs to refinance US$350m of debt with preference shares to lower net gearing.
We see eventual re-listing of DMFI as way out to recapitalise DMPL.
Cheap entry if DMFI reverts to historical performance and debt issue is resolved.
Price Close
0.510
108.0
0.460
99.0
0.410
90.0
0.360
81.0
0.310
72.0
0.260
15
63.0
Vol m
10
Investors remain concerned over DMPLs net gearing, which on its equity base was 6.2x
as at end-Apr 15. Note that DMPL has US$760m of intangible assets and is therefore in
a negative net tangible asset situation. Our analysis suggests that DMPL will be able to
meet its debt obligations in the absence of any further one-off charges.
5
Dec-14
Mar-15
Jun-15
Agricultural risks
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.9
-0.4
3M
-3.3
-3.0
12M
-37.1
-24.3
Short-term concerns are agricultural in nature. In the US, California has been
experiencing a bad drought for four years already. Peach harvest (Del Monte has a
strong market share in canned peaches) has been somewhat impacted by the lack of
water. Over in the Philippines, pineapple output will be affected by the El Nio weather.
DMPLs pineapple estate is solely in the Philippines.
Reiterate Add
At 6.1x FY17 entry multiple, this could be a cheap purchase into a well-known brand if
DMFI's performance reverts to the historical norm and new initiatives help grow market
share in the US. The DMPL business, consisting of the Del Monte brand in the
Philippines and S&W brand in Asia/Middle East, continues to do well. We keep our Add
call and target price that is based on 11.3x P/E.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Apr-14A
743
2.9
(32.22)
(0.025)
0.0%
NA
0%
746.1
6.32
728%
1.45
Apr-15A
2,159
86.6
(38.08)
(0.024)
(5.4%)
NA
0%
23.9
NA
505%
1.46
(16.7%)
Apr-16F
2,372
221.3
42.91
0.022
NA
9.30
0%
9.4
2.99
417%
1.26
14.5%
0%
1.05
Apr-17F
2,465
267.8
65.51
0.034
52.7%
6.09
0%
7.5
2.71
334%
1.04
18.7%
0%
0.99
Apr-18F
2,563
288.2
67.65
0.035
3.3%
5.90
0%
6.8
NA
127%
0.50
16.3%
0%
0.99
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
3.50
25.0%
140
900%
3.00
18.6%
120
743%
Relative
-0.4
-3.0
-24.3
Absolute
-4.9
-3.3
-37.1
2.50
12.1%
100
586%
Major shareholders
% held
2.00
5.7%
80
429%
59.4
1.50
-0.7%
60
271%
1.00
-7.1%
40
114%
0.50
-13.6%
20
-43%
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-20.0%
7.6
Lee Pineapple Co
5.5
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-200%
ROE (rhs)
(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Apr-14A
743
150
3
(29)
(26)
(22)
(5)
(8)
(60)
0
(60)
23
0
(37)
5
0
0
0
(32)
(32)
(32)
Apr-15A
2,159
449
87
(59)
28
(99)
(2)
17
(58)
0
(58)
14
0
(43)
5
0
0
0
(38)
(38)
(38)
Apr-16F
2,372
580
221
(65)
156
(84)
(2)
3
73
0
73
(20)
0
52
(9)
0
0
0
43
43
43
Apr-17F
2,465
636
268
(70)
198
(88)
(2)
(3)
104
0
104
(29)
0
75
(10)
0
0
0
66
66
66
Apr-18F
2,563
663
288
(72)
216
(78)
(2)
5
142
0
142
(40)
0
102
(10)
(25)
0
0
68
68
68
Apr-14A
3
0
132
0
0
(29)
0
0
105
(37)
0
0
(1,711)
(1,749)
1,686
0
0
0
0
(19)
1,667
24
42
(1,643)
Apr-15A
87
2
Apr-16F
221
2
Apr-17F
268
2
Apr-18F
288
2
155
0
(12)
232
(75)
0
0
(79)
(154)
(134)
152
0
0
0
(88)
(71)
7
(57)
78
(2)
0
(12)
209
(65)
0
0
(0)
(65)
(10)
0
0
0
0
(85)
(95)
49
134
144
(18)
0
(29)
223
(65)
0
0
(0)
(65)
(10)
0
0
0
0
(89)
(99)
59
147
157
(21)
0
(40)
230
(65)
0
0
(0)
(65)
(360)
0
0
0
(25)
272
(113)
52
(195)
165
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
113
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Apr-14A
28
216
814
118
1,177
501
21
748
81
1,351
920
0
258
13
1,191
934
0
152
1,087
0
2,277
183
68
251
Apr-15A
36
232
764
127
1,160
578
23
760
119
1,480
446
0
377
15
837
1,273
0
196
1,469
0
2,306
274
60
333
Apr-16F
98
390
611
134
1,232
586
20
752
119
1,477
446
0
390
23
858
1,263
0
203
1,465
0
2,324
317
69
386
Apr-17F
157
405
624
140
1,327
589
18
745
119
1,470
446
0
405
23
874
1,253
0
209
1,462
0
2,336
382
79
461
Apr-18F
210
421
649
147
1,427
589
16
737
119
1,461
446
0
421
23
890
893
0
216
1,109
0
1,999
800
89
889
Apr-14A
0%
0%
0.4%
(1.41)
0.14
(1.15)
0.0%
NA
106.0
500.8
158.5
(1.18%)
N/A
N/A
Apr-15A
190%
2894%
4.0%
(0.87)
0.14
0.28
0.0%
NA
37.9
168.4
67.7
1.25%
1.35%
2.17%
Apr-16F
10%
155%
9.3%
(0.83)
0.16
1.84
28.0%
NA
48.0
140.4
78.3
7.14%
7.57%
5.11%
Apr-17F
4%
21%
10.9%
(0.79)
0.20
2.22
28.0%
NA
58.9
123.2
79.3
9.08%
9.33%
5.93%
Apr-18F
4%
8%
11.2%
(0.58)
0.41
2.76
28.0%
NA
58.8
122.2
79.4
9.85%
9.89%
6.32%
Apr-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-15A
380.6%
N/A
N/A
17.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-16F
10.0%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-17F
2.5%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-18F
2.5%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue growth to revert to single
digits given the mature US market
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Asia to grow faster than the US
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)
114
Company Note
Singapore
Ezion Holdings
Current price:
Target price:
Previous target:
Up/downside:
S$0.59
S$0.95
S$0.95
61.8%
Reuters:
Bloomberg:
Market cap:
EZHL.SI
EZI SP
US$653.3m
S$923.0m
US$7.49m
S$10.53m
1,578m
58.6%
Price Close
1.40
118
1.00
102
0.80
86
0.60
70
0.40
80
60
40
20
54
Vol m
1.20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-15.8
-11.3
3M
-15.8
-15.5
12M
-48.5
-35.7
Given the oil tumult, oil companies are more likely to focus on enhancing production,
rather than exploration and development activities. Liftboats, which are a more reliable,
safer and productive way to service shallow-water platforms, are best suited to meet the
oil companies needs. More importantly, liftboats are exposed to oil companies opex,
rather than capex which have suffered the deepest cuts. We reiterate that Ezion is the
first to successfully adapt and introduce liftboats to ASEAN National Oil Companies.
[X]
Financial Summary
Analyst
YEO Zhi Bin
T (65) 6210 8669
E zhibin.yeo@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
281.9
164.6
152.5
0.10
71.7%
4.28
0.001
0.241%
9.11
NA
115%
0.74
20.2%
Dec-14A
386.5
281.4
215.0
0.12
22.0%
3.47
0.001
0.241%
6.04
NA
86%
0.50
17.4%
Dec-15F
339.6
241.3
106.3
0.06
(48.1%)
6.70
0.001
0.241%
8.24
NA
104%
0.50
7.6%
0%
0.83
Dec-16F
393.3
284.8
133.6
0.08
34.9%
4.95
0.001
0.241%
6.64
182.0
88%
0.46
9.8%
0%
0.68
Dec-17F
506.2
348.9
189.7
0.12
41.5%
3.49
0.001
0.241%
4.85
6.1
65%
0.40
12.4%
0%
0.85
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-11.3
-15.5
-35.7
Absolute
-15.8
-15.8
Major shareholders
Chew Thiam Keng
-48.5
% held
14.2
8.1
7.6
P/BV vs ROE
3.00
30.0%
2.50
25.0%
2.00
20.0%
1.50
15.0%
1.00
10.0%
0.50
5.0%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
200%
170%
140%
110%
80%
50%
20%
-10%
-40%
-70%
-100%
ROE (rhs)
Dec-13A
281.9
133.2
164.6
(45.4)
119.2
(6.8)
30.9
0.0
143.2
19.7
163.0
(2.6)
Dec-14A
386.5
196.0
281.4
(102.8)
178.6
(16.7)
28.0
0.0
190.0
35.8
225.8
(2.0)
Dec-15F
339.6
122.2
241.3
(138.8)
102.5
(21.5)
34.7
0.0
115.6
8.0
123.6
(1.2)
Dec-16F
393.3
152.2
284.8
(152.3)
132.5
(21.0)
32.5
0.0
144.0
0.0
144.0
(2.2)
Dec-17F
506.2
214.8
348.9
(159.5)
189.5
(21.0)
32.5
0.0
201.0
0.0
201.0
(3.0)
160.3
(0.1)
(7.8)
223.7
(0.1)
(8.6)
122.4
0.0
(16.1)
141.9
0.0
(8.3)
197.9
0.0
(8.3)
152.5
133.1
133.1
215.0
179.6
179.6
106.3
98.4
98.4
133.6
133.6
133.6
189.7
189.7
189.7
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
164.6
Dec-14A
281.4
Dec-15F
241.3
Dec-16F
284.8
Dec-17F
348.9
(6.3)
(62.3)
(19.5)
1.0
(9.4)
(16.3)
15.8
(12.2)
(2.3)
143.2
(746.0)
75.8
(62.7)
0.0
(732.9)
530.2
73.9
0.0
(0.8)
0.0
12.0
615.3
25.7
(59.5)
(577.4)
(33.5)
29.6
(22.5)
(1.6)
191.1
(529.0)
17.7
(14.7)
0.0
(526.0)
289.7
157.5
0.0
(1.0)
0.0
83.8
530.1
195.2
(45.2)
(312.4)
0.0
0.0
0.0
(26.0)
(1.2)
194.5
(346.5)
0.0
0.0
0.0
(346.5)
100.0
0.0
0.0
(1.2)
(16.1)
(122.2)
(39.4)
(191.4)
(52.0)
(126.0)
(26.0)
(2.2)
257.6
(154.0)
0.0
0.0
0.0
(154.0)
(100.0)
0.0
0.0
(1.2)
(8.3)
(26.0)
(135.4)
(31.8)
3.6
129.6
(26.0)
(3.0)
310.5
(102.0)
0.0
0.0
0.0
(102.0)
(100.0)
0.0
0.0
(1.2)
(8.3)
(26.0)
(135.4)
73.1
108.5
234.5
116
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
166
107
0
107
380
1,464
194
0
5
1,663
223
Dec-14A
372
160
0
128
659
2,136
173
0
14
2,322
288
Dec-15F
219
223
0
107
548
2,343
208
0
14
2,565
308
Dec-16F
218
237
0
107
561
2,345
240
0
14
2,599
288
Dec-17F
322
277
0
107
706
2,287
273
0
14
2,574
268
146
7
376
863
132
7
427
1,208
155
7
470
1,288
169
7
465
1,208
200
7
476
1,128
4
866
0
1,243
800
(0)
800
33
1,241
0
1,668
1,313
(0)
1,313
33
1,321
0
1,792
1,322
(0)
1,322
33
1,241
0
1,706
1,454
(0)
1,454
33
1,161
0
1,637
1,643
(0)
1,643
Dec-13A
77.7%
122%
58.4%
(0.65)
0.56
9.73
1.62%
0.82%
106.5
125.8
11.6%
8.33%
9.03%
Dec-14A
37.1%
71%
72.8%
(0.71)
0.83
7.94
0.90%
0.66%
125.9
133.1
9.7%
7.86%
8.03%
Dec-15F
(12.1%)
(14%)
71.1%
(0.87)
0.83
3.94
1.00%
1.19%
205.8
136.8
3.7%
3.74%
4.34%
Dec-16F
15.8%
18%
72.4%
(0.80)
0.91
5.10
1.50%
0.88%
214.2
152.4
4.4%
4.69%
5.08%
Dec-17F
28.7%
22%
68.9%
(0.67)
1.03
7.29
1.50%
0.62%
185.5
154.3
6.2%
6.49%
6.69%
Dec-13A
N/A
N/A
N/A
21,893.3
60
N/A
Dec-14A
N/A
N/A
N/A
26,740.2
72
N/A
Dec-15F
N/A
N/A
N/A
27,893.7
73
N/A
Dec-16F
N/A
N/A
N/A
40,262.6
74
N/A
Dec-17F
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Outstanding Orderbook (US$m)
Order Book Wins (US$m)
Order Book Depletion (US$m)
Average Day Rate Per Ship (US$)
No. Of Ships (unit)
Average Utilisation Rate (%)
117
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.65
S$0.70
S$0.70
8.0%
Reuters:
Bloomberg:
Market cap:
FAEH.SI
FEHT SP
US$816.7m
S$1,154m
US$0.35m
S$0.49m
1,769m
61.4%
0.900
104.0
0.800
97.8
0.700
91.5
0.600
85.3
0.500
6
79.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.0
1.5
No changes.
Price Close
3M
4.0
4.3
12M
-21.8
-9.0
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
122.5
111.9
138.2
94.60
0.050
348%
12.78
0.056
8.74%
30.8%
0.98
0.66
5.13%
Dec-14A
121.7
106.3
67.7
91.50
0.042
(16%)
15.19
0.051
7.97%
26.8%
0.97
0.67
4.34%
Dec-15F
117.2
106.2
75.1
86.02
0.042
(1%)
15.32
0.048
7.48%
27.6%
0.96
0.67
4.35%
0%
1.00
Dec-16F
119.9
108.7
76.4
88.00
0.043
1%
15.15
0.049
7.61%
28.9%
0.96
0.67
4.43%
0%
1.07
Dec-17F
122.0
110.6
77.0
89.76
0.043
0%
15.11
0.050
7.71%
29.6%
0.95
0.68
4.47%
0%
1.04
Powered by
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BY THE NUMBERS
1M
3M
12M
1.40
32.00%
0.0600
10.0%
1.20
30.86%
0.0500
8.3%
0.0400
6.7%
0.0300
5.0%
Relative
1.5
4.3
-9.0
Absolute
-3.0
4.0
-21.8
1.00
29.71%
% held
0.80
28.57%
17.4
0.60
27.43%
0.40
26.29%
0.0200
3.3%
0.20
25.14%
0.0100
1.7%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
24.00%
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Major shareholders
Golden Development Pte Ltd
Golden Landmark Pte Ltd
10.9
10.3
DPS (lhs)
Dec-13A
122.5
0.0
122.5
(10.6)
111.9
0.0
(11.5)
(0.3)
(0.6)
99.5
0.0
99.5
(15.2)
0.0
0.0
53.8
138.2
0.0
0.0
0.0
138.2
94.6
Dec-14A
121.7
0.0
121.7
(15.4)
106.3
0.0
(12.0)
(0.3)
(1.4)
92.6
0.0
92.6
(17.5)
0.0
0.0
(7.4)
67.7
0.0
0.0
0.0
67.7
91.5
Dec-15F
117.2
0.0
117.2
(11.0)
106.2
0.0
(11.4)
(0.3)
(0.6)
94.0
0.0
94.0
(18.9)
0.0
0.0
0.0
75.1
0.0
0.0
0.0
75.1
86.0
Dec-16F
119.9
0.0
119.9
(11.3)
108.7
0.0
(11.4)
(0.3)
(0.6)
96.4
0.0
96.4
(20.0)
0.0
0.0
0.0
76.4
0.0
0.0
0.0
76.4
88.0
Dec-17F
122.0
0.0
122.0
(11.5)
110.6
0.0
(12.0)
(0.3)
(0.6)
97.7
0.0
97.7
(20.7)
0.0
0.0
0.0
77.0
0.0
0.0
0.0
77.0
89.8
Dec-13A
138.2
15.2
1.9
0.0
(44.7)
110.6
0.0
(200.3)
0.0
(200.3)
132.2
67.8
(102.9)
(13.9)
83.2
(6.6)
(89.8)
27.2
Dec-14A
67.7
17.5
2.6
0.0
18.2
105.9
0.0
(8.1)
0.0
(8.1)
215.6
0.0
(93.4)
(16.3)
105.9
203.7
97.8
295.9
Dec-15F
75.1
18.9
0.8
0.0
9.7
104.5
0.0
(32.7)
0.0
(32.7)
27.7
0.0
(86.0)
(18.9)
(77.2)
(5.4)
71.8
80.6
Dec-16F
76.4
20.0
0.1
0.0
9.7
106.2
0.0
(32.7)
0.0
(32.7)
47.7
0.0
(88.0)
(20.0)
(60.3)
13.2
73.5
101.2
Dec-17F
77.0
20.7
0.1
0.0
10.2
107.9
0.0
(32.8)
0.0
(32.8)
27.7
0.0
(89.8)
(20.7)
(82.7)
(7.6)
75.2
82.2
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
119
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
2,475
0
0
2,475
29
0
22
6
57
4
0
5
9
779
8
787
1,735
0
0
1,735
Dec-14A
2,476
0
0
2,476
21
0
19
21
61
3
0
122
125
680
8
688
1,724
0
0
1,724
Dec-15F
2,509
0
0
2,509
17
0
19
21
57
4
0
122
126
707
8
716
1,724
0
0
1,724
Dec-16F
2,541
0
0
2,541
32
0
19
21
72
4
0
122
126
755
8
764
1,724
0
0
1,724
Dec-17F
2,574
0
0
2,574
27
0
19
21
67
4
0
122
126
783
8
791
1,724
0
0
1,724
Dec-13A
190%
188%
91.3%
170%
6.56
0%
137%
6.28
6.28
3.20
5.82%
Dec-14A
(1%)
(5%)
87.4%
(9%)
5.29
0%
265%
0.49
0.49
0.17
2.67%
Dec-15F
(4%)
(0%)
90.6%
(6%)
4.97
0%
229%
0.45
0.45
0.13
2.94%
Dec-16F
2%
2%
90.6%
2%
4.81
0%
230%
0.57
0.57
0.25
2.95%
Dec-17F
2%
2%
90.6%
1%
4.73
0%
233%
0.53
0.53
0.21
2.93%
Dec-13A
165.0
86.4%
2,474.7
-
Dec-14A
155.8
83.3%
2,476.1
-
Dec-15F
117.9
84.0%
2,508.8
-
Dec-16F
121.7
85.0%
2,541.5
-
Dec-17F
122.9
85.0%
2,574.3
-
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
120
Company Note
Singapore
First REIT
Acquisition in Kupang
Current price:
Target price:
Previous target:
Up/downside:
S$1.19
S$1.48
S$1.48
24.5%
Reuters:
Bloomberg:
Market cap:
FRET.SI
FIRT SP
US$631.7m
S$892.5m
US$0.56m
S$0.79m
727.3m
66.2%
1.500
120.0
1.400
113.8
1.300
107.5
1.200
101.3
1.100
30
95.0
20
Vol m
FIRT announced its first asset enhancement exercise involving Siloam Hospital
Surabaya. The trust has identified two hospitals, including Siloam Hospitals Lippo
Cikarang in East Jakarta, that could yield asset-enhancement opportunities, thus
improving return on assets in the longer run. We have not factored in any accretion from
this exercise into our current numbers.
No change
Price Close
FIRT also announced the proposed acquisition of Siloam Hospital Kupang and Lippo
Plaza Kupang for S$70m, a 7.2% discount to independent valuation. The projected rental
income of S$6.94m pa translates to an attractive triple net yield of 9.91%. This property will
expand the trusts asset base to S$1.25bn and boost DPU by 2.7%. Siloam Hospital
Kupang commenced operations in 2014 and offers emergency & trauma, mother and
child, internal medicine, cardiology, O&G, neurology, and other specialities.
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
-3.3
-3.0
12M
-4.4
8.4
The purchase will be funded by a combination of debt (S$55m) and consideration units
(S$15m). This could potentially raise the trusts gearing to 36-37%, still well within the
45% ceiling guideline effective from Jan 2016. Acquisition growth will remain one of
FIRTs growth drivers, in our view, as the trust has the right of first refusal over Lippo
Karawaci hospital assets.
Maintain Add
We maintain our Add rating with an unchanged DDM-based target price of S$1.48. FIRT
offers investors FY16-17 DPU yield of 7.3-7.4%, with a stable earnings profile. Potential
yield accretive acquisitions and asset-enhancement activities could act as re-rating
catalysts.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
83.3
80.2
117.8
52.09
0.083
33.1%
14.25
0.075
6.32%
31.9%
0.97
1.23
9.29%
Dec-14A
93.3
91.9
90.6
58.22
0.073
(11.4%)
16.25
0.081
6.76%
32.7%
1.02
1.17
7.38%
Dec-15F
101.5
99.8
58.9
65.71
0.080
8.7%
14.95
0.086
7.22%
32.8%
0.99
1.21
7.94%
1.01
Dec-16F
103.4
101.8
60.4
67.19
0.080
0.9%
14.82
0.087
7.33%
33.0%
0.97
1.22
8.20%
1.00
Dec-17F
105.4
103.7
61.9
68.71
0.082
1.8%
14.56
0.089
7.44%
33.1%
0.96
1.24
8.47%
0.99
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
Relative
2.8
-3.0
Absolute
-1.7
-3.3
Major shareholders
12M
8.4
-4.4
% held
27.7
6.0
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
35.0%
31.1%
27.2%
23.3%
19.4%
15.6%
11.7%
7.8%
3.9%
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
8.0%
7.2%
6.4%
5.6%
4.8%
4.0%
3.2%
2.4%
1.6%
0.8%
0.0%
Dec-13A
83.3
0.0
83.3
(3.1)
80.2
0.0
(8.0)
(0.3)
(1.7)
70.2
0.0
70.2
(12.2)
Dec-14A
93.3
0.0
93.3
(1.4)
91.9
0.0
(9.1)
(0.3)
(1.9)
80.5
0.0
80.5
(15.0)
Dec-15F
101.5
0.0
101.5
(1.6)
99.8
0.0
(9.1)
(0.3)
(2.0)
88.3
0.0
88.3
(15.0)
Dec-16F
103.4
0.0
103.4
(1.7)
101.8
0.0
(9.1)
(0.3)
(2.1)
90.2
0.0
90.2
(15.1)
Dec-17F
105.4
0.0
105.4
(1.7)
103.7
0.0
(9.1)
(0.3)
(2.1)
92.1
0.0
92.1
(15.1)
0.0
61.3
119.4
(1.5)
0.0
47.2
112.7
(22.1)
0.0
0.0
73.3
(14.4)
0.0
0.0
75.2
(14.7)
0.0
0.0
77.0
(15.1)
117.8
52.1
90.6
58.2
58.9
65.7
60.4
67.2
61.9
68.7
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
Dec-13A
119.4
12.2
(0.3)
(13.1)
(54.8)
63.3
Dec-14A
112.7
15.0
8.9
(16.2)
(39.7)
80.8
Dec-15F
73.3
15.0
(0.5)
(14.4)
0.0
73.5
Dec-16F
75.2
15.1
(0.1)
(14.7)
0.0
75.4
Dec-17F
77.0
15.1
(0.1)
(15.1)
0.0
76.9
(142.0)
0.2
(141.8)
140.6
0.0
(42.8)
(10.5)
87.3
8.8
(78.3)
49.9
(67.7)
0.2
(67.5)
39.3
0.0
(39.8)
(13.8)
(14.4)
(1.1)
13.5
37.5
0.0
0.2
0.2
0.0
0.0
(64.4)
(15.2)
(79.6)
(5.9)
73.9
58.6
0.0
0.2
0.2
0.0
0.0
(65.8)
(15.2)
(81.1)
(5.6)
75.7
60.5
0.0
0.1
0.1
0.0
0.0
(67.3)
(15.2)
(82.6)
(5.5)
77.1
61.9
122
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,052
0
0
1,053
29
Dec-14A
1,172
0
1
1,173
28
Dec-15F
1,172
0
1
1,173
22
Dec-16F
1,172
0
1
1,173
17
Dec-17F
1,172
0
1
1,173
11
25
2
56
30
0
20
50
354
22
376
683
9
3
40
20
26
21
68
370
29
399
745
10
3
35
21
26
21
69
370
29
399
740
10
3
29
21
26
21
69
370
29
399
734
10
3
24
21
26
21
69
370
29
399
729
683
745
740
734
729
Dec-13A
44.5%
40.1%
96.3%
3.58%
5.68
1.3%
44%
1.12
1.12
0.59
12.2%
Dec-14A
12.0%
14.5%
98.5%
7.05%
5.29
19.6%
64%
0.58
0.58
0.41
7.8%
Dec-15F
8.8%
8.7%
98.4%
6.71%
5.80
19.6%
109%
0.51
0.51
0.33
4.9%
Dec-16F
1.9%
1.9%
98.4%
1.52%
5.93
19.6%
109%
0.43
0.43
0.24
5.0%
Dec-17F
1.9%
1.9%
98.4%
1.52%
6.06
19.6%
109%
0.35
0.35
0.16
5.2%
Dec-13A
N/A
N/A
N/A
N/A
100.0%
1,052.3
N/A
Dec-14A
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-15F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-16F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-17F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
123
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.99
S$2.38
S$2.38
19.6%
Reuters:
Bloomberg:
Market cap:
FRLD.SI
FR SP
US$2,233m
S$3,155m
US$2.87m
S$4.04m
1,584m
31.3%
Price Close
2.30
129.0
2.10
121.0
1.90
113.0
1.70
105.0
1.50
97.0
1.30
15
89.0
Vol m
10
5
Mar-15
No changes.
Dec-14
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.5
5.0
3M
31.4
31.7
12M
9.3
22.1
The group owns 850k tonnes of refining capacity, allowing the group to refine all of its
CPO in-house and extract better profit margins for its palm products. Its biodiesel plant
in Indonesia stands to benefit from the higher demand in the country following the
governments moves to raise its biodiesel mandates to 20% blend in 2016 from 15%
currently. The group was recently appointed to supply 73,000 kilolitres of biodiesel to
Pertamina during Nov 15-Apr 16.
Maintain Add
First Resources is our top pick among the regional planters due to its superior operating
efficiency compared to peers, strong FFB output growth prospects and attractive P/E
valuations vs. peers. We maintain our Add call and target price of S$2.38, based on
forward P/E of 13x (historical average).
[X]
Financial Summary
Analyst
Ivy NG Lee Fang, CFA
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
626.5
359.5
238.2
0.14
(0.4%)
10.27
0.032
2.29%
6.94
NA
20.9%
2.25
20.7%
Dec-14A
615.5
297.6
173.4
0.11
(20.2%)
12.87
0.036
2.58%
8.45
19.87
20.8%
2.10
16.9%
Dec-15F
458.6
233.0
129.8
0.08
(25.2%)
17.20
0.025
1.74%
10.89
80.25
20.0%
1.93
11.7%
0.98
Dec-16F
583.8
313.9
166.8
0.11
28.5%
13.38
0.032
2.24%
8.05
32.20
16.7%
1.76
13.8%
1.05
Dec-17F
710.3
371.4
207.3
0.13
24.3%
10.77
0.039
2.79%
6.71
19.73
11.5%
1.58
15.4%
1.06
Powered by
EFA
BY THE NUMBERS
1M
5.0
0.5
3M
31.7
31.4
12M
22.1
9.3
P/BV vs ROE
3.50
25.0%
3.00
21.4%
2.50
17.9%
25.0
60%
20.0
40%
20%
0%
% held
2.00
14.3%
15.0
63.2
1.50
10.7%
10.0
1.00
7.1%
FMR
6.3
5.6
0.50
3.6%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
5.0
-20%
0.0
Jan-11 Jan-12
-40%
Jan-13
ROE (rhs)
Dec-13A
626.5
381.7
359.5
(27.6)
331.9
(18.3)
0.0
0.0
313.6
Dec-14A
615.5
323.4
297.6
(30.7)
266.9
(15.0)
0.0
0.0
251.9
Dec-15F
458.6
279.4
233.0
(31.9)
201.0
(18.2)
0.0
0.0
182.8
Dec-16F
583.8
355.8
313.9
(54.6)
259.4
(18.2)
0.0
0.0
241.1
Dec-17F
710.3
432.8
371.4
(55.4)
316.0
(18.2)
0.0
0.0
297.7
313.6
(67.5)
251.9
(71.2)
182.8
(43.9)
241.1
(62.7)
297.7
(76.3)
246.1
(7.9)
180.8
(7.4)
138.9
(9.2)
178.5
(11.7)
221.5
(14.2)
238.2
217.2
217.2
173.4
173.4
173.4
129.8
129.8
129.8
166.8
166.8
166.8
207.3
207.3
207.3
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
359.5
Dec-14A
297.6
Dec-15F
233.0
Dec-16F
313.9
Dec-17F
371.4
(3.8)
(3.8)
(34.6)
15.0
16.9
(41.9)
(17.8)
(65.3)
200.0
(181.0)
0.8
(13.8)
(76.7)
222.9
(204.2)
0.0
(18.2)
(43.9)
187.8
(160.0)
0.0
(18.2)
(62.7)
229.3
(160.0)
0.0
(18.2)
(76.3)
273.1
(160.0)
(54.5)
(235.5)
(55.3)
0.2
(10.3)
(214.5)
103.9
0.3
0.0
(160.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
(51.0)
(57.6)
(38.9)
(50.0)
(62.2)
16.4
(89.7)
(125.2)
(90.8)
(14.3)
23.2
69.8
78.2
112.3
26.9
0.0
(38.9)
(11.1)
27.8
51.1
0.0
(50.0)
19.3
69.3
92.6
0.0
(62.2)
50.9
113.1
136.4
125
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
272
51
59
28
410
303
0
102
965
1,370
3
0
60
18
80
3
484
173
660
0
740
993
47
1,040
Dec-14A
351
46
49
30
475
338
0
86
1,099
1,523
11
0
57
20
88
3
569
222
794
0
882
1,063
53
1,116
Dec-15F
340
39
32
30
440
366
0
86
1,199
1,651
11
0
50
20
82
3
569
222
794
0
876
1,154
62
1,216
Dec-16F
359
47
41
30
477
372
0
86
1,299
1,756
11
0
64
20
96
3
569
222
794
0
889
1,271
73
1,344
Dec-17F
410
56
50
30
546
376
0
86
1,399
1,861
11
0
78
20
109
3
569
222
794
0
903
1,416
88
1,503
Dec-13A
3.8%
(3.0%)
57.4%
(0.14)
0.63
15.18
21.5%
21.4%
22.42
87.34
88.9
19.2%
20.8%
14.1%
Dec-14A
(1.8%)
(17.2%)
48.4%
(0.15)
0.67
13.26
28.2%
33.2%
24.02
67.32
73.0
15.5%
16.9%
10.2%
Dec-15F
(25.5%)
(21.7%)
50.8%
(0.15)
0.73
8.62
24.0%
30.0%
28.33
82.17
109.4
10.6%
11.8%
7.5%
Dec-16F
27.3%
34.8%
53.8%
(0.14)
0.80
11.12
26.0%
30.0%
22.87
58.54
92.0
12.8%
14.2%
9.0%
Dec-17F
21.7%
18.3%
52.3%
(0.11)
0.89
13.55
25.6%
30.0%
23.28
59.58
93.6
14.7%
16.0%
10.2%
Dec-13A
170,596
120,978
18.7
6.5%
857
Dec-14A
194,607
132,220
18.7
8.0%
821
Dec-15F
212,607
146,372
19.3
14.9%
670
Dec-16F
230,607
170,565
19.4
18.0%
750
Dec-17F
248,607
194,576
19.3
11.5%
800
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
126
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.71
S$2.04
S$2.04
19.5%
Reuters:
Bloomberg:
Market cap:
FRCT.SI
FCL SP
US$3,504m
S$4,950m
US$0.19m
S$0.26m
2,889m
12.0%
Office and retail developments underway to provide room for medium-term rental
income expansion.
Foray into Thailand through a strategic stake in Golden Land.
Maintain Add with target price of S$2.04.
Price Close
1.800
112.7
1.600
104.3
1.400
4
3
2
1
96.0
Vol m
2.000
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
3.3
7.8
3M
11.8
12.1
12M
3.6
16.4
Recurrent income makes up 58% of FCLs PBIT, in line with its target of 60-70%. This
segment will be underpinned by strong rental income from FPAs C&I portfolio as well as
the opening of Waterway Point, a suburban mall in Singapore. In the medium term, the
completion of Frasers Tower, Northpoint City and AEI works at Centrepoint should boost
rental income significantly.
Maintain Add
We maintain our Add rating on FCL with an unchanged target price of S$2.04, premised
on a 30% discount to RNAV. While its gearing of 83.6% is higher than its peers, we
believe that potential capital management efforts such as asset sales to its existing
REITs will enable it to recycle capital going forward. Other share price catalysts could
emerge should the group increase its free float.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Sep-14A
2,203
633
460.1
0.17
12.9%
10.02
0.085
4.97%
25.34
NA
88.2%
0.70
7.91%
Sep-15A
3,562
918
670.7
0.21
22.0%
8.21
0.050
2.92%
18.19
146.9
83.6%
0.63
8.12%
Sep-16F
3,632
1,042
598.2
0.21
(0.5%)
8.26
0.050
2.92%
16.11
NA
80.5%
0.60
7.45%
0.98
Sep-17F
4,926
1,317
777.8
0.27
30.0%
6.35
0.050
2.92%
12.82
NA
76.4%
0.55
9.06%
1.30
Sep-18F
4,437
1,380
849.4
0.29
9.2%
5.82
0.050
2.92%
12.30
NA
72.3%
0.51
9.15%
1.28
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
7.8
12.1
16.4
Absolute
3.3
11.8
3.6
Major shareholders
% held
TCC
59.5
Thai Bev
28.5
P/BV vs ROE
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12.00
50%
10.00
35%
8.00
20%
6.00
5%
4.00
-10%
2.00
-25%
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-40%
ROE (rhs)
Sep-14A
2,203
871
633
(12)
620
(44)
52
71
699
(43)
656
(156)
Sep-15A
3,562
1,408
918
(40)
878
(149)
126
0
854
90
944
(215)
Sep-16F
3,632
1,436
1,042
(87)
955
(202)
131
0
884
0
884
(230)
Sep-17F
4,926
1,948
1,317
(88)
1,230
(196)
106
0
1,139
0
1,139
(303)
Sep-18F
4,437
1,755
1,380
(88)
1,292
(147)
94
0
1,239
0
1,239
(329)
501
(41)
0
729
(29)
(29)
654
(27)
(29)
836
(29)
(29)
910
(32)
(29)
460
493
493
671
601
601
598
598
598
778
778
778
849
849
849
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Sep-14A
633
(866)
Sep-15A
918
135
Sep-16F
1,042
Sep-17F
1,317
Sep-18F
1,380
511
1,136
(779)
(222)
30
(89)
(66)
(580)
(2,012)
(203)
(71)
(186)
(94)
498
(1,572)
158
(208)
(257)
(159)
1,087
(362)
151
(201)
(252)
(210)
1,942
(333)
114
(163)
(205)
(228)
119
(108)
(2,880)
(4,892)
4,711
1,598
171
(1,401)
936
696
131
(231)
(1,060)
0
106
(227)
(1,882)
0
94
(14)
(878)
0
(119)
(249)
(174)
(174)
(174)
(414)
5,775
(164)
1,219
(202)
(1,436)
(169)
(2,226)
(120)
(1,172)
128
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Sep-14A
873
4,668
812
4
62
6,419
1,415
12,954
503
0
14,872
1,538
Sep-15A
1,373
3,943
844
7
174
6,340
1,991
14,014
721
0
16,726
1,020
Sep-16F
1,401
3,403
860
6
795
6,465
2,011
14,431
721
0
17,163
1,020
Sep-17F
1,429
2,235
878
8
2,048
6,596
2,031
15,049
721
0
17,801
1,020
Sep-18F
1,457
2,984
895
7
1,384
6,727
2,051
15,739
721
0
18,512
1,020
1,594
157
3,289
7,824
1,315
218
2,552
9,255
1,302
218
2,539
9,348
1,288
218
2,526
9,441
1,276
218
2,513
9,536
555
8,379
0
11,668
7,012
2,612
9,624
608
9,863
0
12,416
7,803
2,848
10,651
608
9,956
0
12,495
8,256
2,877
11,133
608
10,049
0
12,576
8,916
2,905
11,822
608
10,144
0
12,657
9,647
2,935
12,582
Sep-14A
7.3%
21.9%
28.7%
(2.94)
2.43
7.00
23.7%
23.7%
92.31
1.05
454.8
16.7%
5.07%
3.70%
Sep-15A
61.7%
45.0%
25.8%
(3.08)
2.70
4.71
22.8%
42.9%
84.81
0.98
246.5
15.4%
4.58%
3.56%
Sep-16F
2.0%
13.5%
28.7%
(3.10)
2.86
3.72
26.0%
29.0%
85.85
1.09
218.0
15.5%
4.76%
3.67%
Sep-17F
35.6%
26.4%
26.7%
(3.13)
3.09
4.88
26.6%
22.4%
64.39
0.80
158.7
19.6%
5.87%
4.30%
Sep-18F
(9.9%)
4.8%
31.1%
(3.15)
3.34
6.31
26.6%
20.5%
72.91
0.98
174.4
20.1%
5.94%
4.26%
Sep-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
15.0%
83.2%
51.0%
N/A
Sep-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
21.0%
66.4%
50.0%
N/A
Sep-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
24.9%
63.7%
50.0%
N/A
Sep-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
19.2%
72.2%
50.0%
N/A
Sep-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
21.9%
68.3%
50.0%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
129
Company Note
Singapore
Chugging along
Current price:
Target price:
Previous target:
Up/downside:
S$1.87
S$2.22
S$2.22
18.8%
Reuters:
Bloomberg:
Market cap:
FCRT.SI
FCT SP
US$1,214m
S$1,715m
US$1.24m
S$1.75m
915.4m
48.7%
No change.
Price Close
Portfolio shopper traffic grew 8.2% in 4QFY15, largely driven by double-digit growth in
patronage at CP and NP. Tenant sales improved in tandem. This helped to underpin
positive rental reversions of 7.1% during the quarter. CP and YewTee Point saw high
single-digit reversions while Anchorpoint enjoyed a 14.7% upside from lease renewals.
This bodes well for the 30% and 35% of portfolio gross rents due to be re-contracted in
FY16 and FY17 respectively.
2.200
121.0
2.100
114.8
2.000
108.5
1.900
102.3
1.800
6
96.0
NP AEI is scheduled to commence in Mar 16, and to be completed over the next 18
months. The AEI will focus on enhancing shopper experience by boosting diversity and
to enable the mall to benefit from the integration with the upcoming retail component of
Northpoint City. There could be some tenant displacements during this period, but FCT
has a good track record in managing these well and it expects to generate positive
return upon completion of the AEI. Previous AEI had generated >10% ROI.
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.1
1.4
3M
-1.6
-1.3
12M
-2.1
10.7
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Sep-14A
168.8
118.1
165.1
95.4
0.11
(1.5%)
17.75
0.11
5.98%
29.3%
1.85
1.01
5.80%
Sep-15A
189.2
131.0
171.5
106.4
0.11
4.9%
16.93
0.12
6.21%
28.2%
1.91
0.98
5.86%
Sep-16F
196.3
141.3
112.4
110.5
0.12
10.7%
15.29
0.12
6.43%
29.5%
1.87
1.00
6.46%
0.99
Sep-17F
200.0
143.9
114.6
112.8
0.12
1.7%
15.04
0.12
6.54%
29.8%
1.86
1.00
6.65%
1.02
Sep-18F
203.7
146.6
116.9
115.1
0.13
1.7%
14.79
0.12
6.66%
30.1%
1.86
1.01
6.79%
1.04
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
1.4
-1.3
10.7
Absolute
-3.1
-1.6
-2.1
Major shareholders
Fraser Centrepoint Ltd
% held
41.2
Schroders Plc
6.0
Capital Group
4.1
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
32.00%
31.13%
30.25%
29.38%
28.50%
27.63%
26.75%
25.88%
25.00%
0.1400
7.00%
0.1200
6.00%
0.1000
5.00%
0.0800
4.00%
0.0600
3.00%
0.0400
2.00%
0.0200
1.00%
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
DPS (lhs)
Sep-14A
149.5
19.3
168.8
(50.7)
118.1
0.0
(12.9)
(1.7)
0.0
103.5
0.0
103.5
(18.4)
6.5
0.0
73.4
165.1
0.0
0.0
0.0
165.1
95.4
Sep-15A
167.9
21.3
189.2
(58.2)
131.0
0.0
(14.1)
(1.6)
0.0
115.4
0.0
115.4
(19.2)
5.1
0.0
70.2
171.5
0.0
0.0
0.0
171.5
106.4
Sep-16F
178.2
18.1
196.3
(55.1)
141.3
0.0
(14.6)
(2.0)
0.0
124.7
0.0
124.7
(22.8)
10.4
0.0
0.0
112.4
0.0
0.0
0.0
112.4
110.5
Sep-17F
181.9
18.1
200.0
(56.1)
143.9
0.0
(14.7)
(2.0)
0.0
127.2
0.0
127.2
(23.1)
10.4
0.0
0.0
114.6
0.0
0.0
0.0
114.6
112.8
Sep-18F
185.6
18.1
203.7
(57.2)
146.6
0.0
(14.8)
(2.0)
0.0
129.8
0.0
129.8
(23.4)
10.4
0.0
0.0
116.9
0.0
0.0
0.0
116.9
115.1
Sep-14A
165.1
11.9
(6.4)
0.0
(72.9)
97.6
(1.5)
(294.2)
0.0
(295.7)
220.0
158.4
(94.5)
(86.4)
197.5
(0.6)
(198.0)
5.5
Sep-15A
171.5
14.1
2.3
0.0
(67.9)
119.9
(5.4)
4.6
0.0
(0.8)
98.0
(0.1)
(105.7)
(136.9)
(144.7)
(25.7)
119.3
199.1
Sep-16F
112.4
12.3
11.2
0.0
(7.5)
128.4
(14.8)
4.2
0.0
(10.5)
10.0
0.0
(110.5)
(22.8)
(123.3)
(5.4)
117.9
105.1
Sep-17F
114.6
12.6
0.8
0.0
(7.5)
120.6
(14.9)
4.2
0.0
(10.6)
10.0
0.0
(112.8)
(23.1)
(125.8)
(15.9)
109.9
96.9
Sep-18F
116.9
12.9
0.8
0.0
(7.5)
123.2
(15.0)
4.2
0.0
(10.7)
10.0
0.0
(115.1)
(23.4)
(128.4)
(16.0)
112.4
99.1
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
131
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Sep-14A
2,475
0
0
2,475
42
0
0
5
47
40
95
18
153
644
26
670
1,699
0
Sep-16F
2,542
0
0
2,542
21
0
0
5
27
43
278
18
339
481
27
508
1,722
0
Sep-17F
2,557
0
1
2,557
16
0
0
5
21
44
278
18
340
491
27
518
1,721
0
Sep-18F
2,572
0
1
2,573
10
0
0
5
16
45
278
18
340
501
27
528
1,720
0
1,755
1,722
1,721
1,720
Sep-14A
6.8%
5.8%
70.0%
2.35%
5.60
0%
57.8%
0.31
0.31
0.27
7.09%
Sep-15A
12.1%
11.0%
69.2%
3.76%
5.97
0%
62.1%
0.07
0.07
0.05
6.76%
Sep-16F
3.8%
7.8%
72.0%
3.63%
5.48
0%
98.4%
0.08
0.08
0.06
4.39%
Sep-17F
1.9%
1.9%
72.0%
1.72%
5.51
0%
98.4%
0.06
0.06
0.05
4.45%
Sep-18F
1.9%
1.9%
71.9%
1.72%
5.55
0%
98.5%
0.05
0.05
0.03
4.52%
Sep-14A
13.2
N/A
N/A
1,086
99.1%
2,400.0
N/A
Sep-15A
13.4
N/A
N/A
1,086
99.3%
2,464.0
N/A
Sep-16F
13.7
N/A
N/A
1,086
99.3%
2,478.8
N/A
Sep-17F
14.0
N/A
N/A
1,086
99.3%
2,493.7
N/A
Sep-18F
14.3
N/A
N/A
1,086
99.3%
2,508.6
N/A
1,699
Sep-15A
2,527
0
0
2,527
16
0
0
5
22
32
278
18
328
440
27
467
1,755
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
132
Company Note
Singapore
FRCR.SI
FCOT SP
US$723.8m
S$1,023m
US$0.65m
S$0.91m
676.8m
72.4%
FCOT will continue to drive earnings growth through proactive asset management.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Average daily turnover:
Current shares o/s
Free float:
Key changes in this note
No change.
Price Close
1.700
111.0
1.500
105.7
1.300
100.3
1.100
6
95.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.8
-0.3
3M
-1.2
-0.9
12M
-10.4
2.4
FCOTs book NAV dipped from S$1.61 at end-Sep 14 to S$1.54 at end-Sep 2015 due to
lower value of CSC and Central Park, as well as the drag from a weaker A$, which offset
the small compression in cap rate for its Australian properties. FCOTs portfolio value
stood at S$1.95bn at end-Sep 2015, including the recently-purchased 357 Collins St.
Maintain Add
We continue to like FCOT for its under-rented Singapore assets and value-unlocking
activities, which are potential catalysts. We retain our Add rating, with an unchanged
DDM-based target price of S$1.62.
[X]
Financial Summary
Analyst(s)
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Sep-14A
118.8
90.6
87.2
57.26
0.087
27.0%
14.97
0.08
6.51%
36.8%
1.61
0.81
5.42%
Sep-15A
142.2
101.9
75.2
67.81
0.097
11.4%
13.44
0.10
7.47%
36.0%
1.54
0.84
6.15%
Sep-16F
157.6
113.3
113.8
82.19
0.089
(8.3%)
14.65
0.10
8.00%
34.7%
1.63
0.80
5.60%
1.05
Sep-17F
161.2
115.9
72.2
84.53
0.091
2.5%
14.29
0.11
8.16%
34.8%
1.62
0.80
5.60%
1.06
Sep-18F
165.3
118.9
74.9
87.25
0.094
2.9%
13.89
0.11
8.36%
34.9%
1.60
0.81
5.82%
1.21
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-0.3
-0.9
2.4
Absolute
-4.8
-1.2
-10.4
Major shareholders
% held
27.6
Nomura
18.7
1.1
1.200
38.0%
0.1200
9.00%
1.000
36.5%
0.1000
7.50%
0.800
35.0%
0.0800
6.00%
0.600
33.5%
0.0600
4.50%
0.400
32.0%
0.0400
3.00%
0.200
30.5%
0.0200
1.50%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
29.0%
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
DPS (lhs)
Sep-14A
118.8
0.0
118.8
(28.3)
90.6
0.0
(11.9)
(2.0)
0.0
76.7
0.0
76.7
(20.5)
0.0
0.0
29.2
85.4
1.9
0.0
(0.0)
87.2
57.3
Sep-15A
142.2
0.0
142.2
(40.3)
101.9
0.0
(12.2)
(2.5)
0.0
87.1
0.0
87.1
(21.7)
0.0
0.0
4.6
70.0
5.2
0.0
0.0
75.2
67.8
Sep-16F
157.6
0.0
157.6
(44.3)
113.3
0.0
(12.6)
(2.8)
0.0
97.9
0.0
97.9
(22.6)
0.0
44.0
0.0
119.3
(5.4)
0.0
0.0
113.8
82.2
Sep-17F
161.2
0.0
161.2
(45.3)
115.9
0.0
(12.6)
(2.8)
0.0
100.5
0.0
100.5
(22.7)
0.0
0.0
0.0
77.8
(5.6)
0.0
0.0
72.2
84.5
Sep-18F
165.3
0.0
165.3
(46.5)
118.9
0.0
(12.6)
(2.8)
0.0
103.4
0.0
103.4
(22.7)
0.0
0.0
0.0
80.7
(5.8)
0.0
0.0
74.9
87.3
Sep-14A
85.4
20.5
9.8
(4.7)
(29.0)
82.0
(3.2)
(0.0)
(0.3)
(3.5)
14.4
(12.1)
(57.3)
(18.7)
(73.6)
5.0
78.8
72.5
Sep-15A
70.0
21.7
1.5
(0.2)
(4.4)
88.6
(2.0)
(195.7)
0.4
(197.3)
57.3
139.8
(53.9)
(19.0)
124.2
15.5
(108.3)
(70.7)
Sep-16F
119.3
(21.4)
2.6
0.0
48.6
149.1
0.0
44.8
0.4
45.2
0.0
0.0
(82.2)
(23.0)
(105.2)
89.1
194.7
171.7
Sep-17F
77.8
22.7
0.7
0.0
4.5
105.7
0.0
(3.0)
0.4
(2.6)
3.0
0.0
(84.5)
(23.1)
(104.6)
(1.5)
103.5
83.4
Sep-18F
80.7
22.7
0.8
0.0
4.3
108.6
0.0
(2.0)
0.4
(1.6)
2.0
0.0
(87.3)
(23.2)
(108.4)
(1.4)
107.4
86.2
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
134
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Sep-14A
1,826
0
0
1,826
47
0
9
0
56
24
0
2
26
692
72
764
1,091
0
0
1,091
Sep-15A
1,963
0
0
1,963
62
0
9
0
71
30
0
10
39
732
56
788
1,207
0
0
1,207
Sep-16F
1,963
0
0
1,963
151
0
9
0
160
32
0
10
42
736
56
792
1,289
0
0
1,289
Sep-17F
1,966
0
0
1,966
150
0
9
0
159
33
0
10
43
739
56
795
1,287
0
0
1,287
Sep-18F
1,968
0
0
1,968
148
0
9
0
157
34
0
10
44
741
56
797
1,285
0
0
1,285
Sep-14A
0.5%
(0.4%)
76.2%
8.1%
3.69
0.00%
66%
2.15
2.15
1.81
4.66%
Sep-15A
19.6%
12.5%
71.6%
14.8%
3.95
0.00%
90%
1.80
1.80
1.58
3.84%
Sep-16F
10.8%
11.2%
71.9%
7.1%
4.25
4.56%
72%
3.81
3.81
3.60
5.48%
Sep-17F
2.3%
2.3%
71.9%
2.0%
4.35
7.23%
117%
3.71
3.71
3.51
3.40%
Sep-18F
2.5%
2.6%
71.9%
2.4%
4.47
7.21%
117%
3.61
3.61
3.41
3.52%
Sep-14A
6.6
N/A
N/A
2,279
97.0%
1,824.9
N/A
Sep-15A
7.0
N/A
N/A
2,623
96.8%
1,954.8
N/A
Sep-16F
7.2
N/A
N/A
2,623
96.8%
1,954.8
N/A
Sep-17F
7.3
N/A
N/A
2,623
96.8%
1,957.8
N/A
Sep-18F
7.4
N/A
N/A
2,623
96.8%
1,959.8
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
135
Company Note
Singapore
Genting Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.78
S$0.81
S$0.81
4.2%
Reuters:
Bloomberg:
Market cap:
GENS.SI
GENS SP
US$6,583m
S$9,300m
US$11.91m
S$16.77m
12,096m
40.0%
Price Close
1.000
95.0
0.800
85.0
0.600
150
75.0
Vol m
100
50
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
GENSs Resorts World Sentosa (RWS) continues to lose market share to Marina
Bay Sands (MBS) across both VIP and mass gaming segments.
We expect this trend to continue as RWS cuts back on credit extensions to VIPs,
while MBS has the location advantage for mass.
Bad debt charges expected to remain high until 2H16, weighing on earnings.
Maintain Hold, given the challenging outlook in the VIP gaming segment.
VIP market share to erode further; bad debt to remain high till 2H16
1.200
Dec-14
1M
-9.9
-5.4
3M
5.4
5.7
12M
-29.2
-16.4
Looking into 2016, management guided that it will continue to scale back the VIP
business by tightening credit extension, in line with a new norm. It does not expect to
see an upturn in VIP business from China anytime soon but continues to pursue
business from ASEAN customers. As such, we expect RWS to continue to lose VIP
market share to MBS in the quarters ahead. We also expect bad debt charges to remain
high until 2H16, as it continues to provide for credit extended 12-18 months ago.
Maintain Hold
We maintain our Hold call on GENS, with an unchanged DCF-based target price of
S$0.81. We expect the environment to remain challenging for GENS, at least in 1H16,
with 2H16 to see some reprieve from lower bad debt charges. We advise investors to
remain on the sidelines pending clearer signs of a bottom.
Financial Summary
Analysts
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Normalised EPS (S$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-13A
2,847
1,247
501.1
0.048
0.2%
16.11
0.010
1.29%
5.35
NA
(29.1%)
0.99
6.34%
Dec-14A
2,862
1,205
470.2
0.042
(12.3%)
18.38
0.010
1.29%
5.00
27.73
(35.5%)
0.98
5.35%
Dec-15F
2,481
721
297.1
0.014
(66.1%)
54.30
0.010
1.29%
7.64
14.81
(40.6%)
0.97
1.80%
0%
0.60
Dec-16F
2,525
900
347.1
0.028
98.1%
27.41
0.010
1.29%
5.49
13.77
(45.4%)
0.95
3.51%
0%
0.83
Dec-17F
2,575
989
427.1
0.035
23.0%
22.27
0.010
1.29%
4.48
14.92
(49.1%)
0.92
4.21%
0%
0.85
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
-5.4
5.7
-16.4
Absolute
-9.9
5.4
Major shareholders
Genting Bhd
-29.2
% held
51.9
Vanguard Group
1.1
1.1
P/BV vs ROE
6.00
20.0%
5.00
16.7%
4.00
13.3%
3.00
10.0%
2.00
6.7%
1.00
3.3%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
3,000%
2,563%
2,125%
1,688%
1,250%
813%
375%
-63%
-500%
ROE (rhs)
Dec-13A
3,028
1,605
1,247
(422)
824
(15)
37
0
846
Dec-14A
2,964
1,515
1,205
(419)
786
8
11
0
805
Dec-15F
2,448
1,034
721
(334)
387
9
(5)
0
391
Dec-16F
2,574
1,214
900
(318)
582
18
(4)
0
596
Dec-17F
2,615
1,305
989
(314)
674
26
(2)
0
699
846
(138)
(88)
619
(0)
805
(170)
(47)
588
0
391
(98)
122
415
0
596
(131)
0
465
0
699
(154)
0
545
0
(118)
(118)
(118)
(118)
(118)
501
708
589
470
635
517
297
293
175
347
465
347
427
545
427
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
1,247
(37)
(262)
Dec-14A
1,205
(11)
(358)
Dec-15F
721
5
30
Dec-16F
900
4
(40)
Dec-17F
989
2
(95)
107
(20)
(215)
821
(449)
271
1
(153)
956
(195)
370
9
(98)
1,038
(223)
339
18
(131)
1,090
(227)
274
26
(154)
1,042
(232)
(1,278)
927
(800)
(655)
2
(1,213)
1,477
70
(682)
(169)
0
0
(223)
(172)
0
0
0
(227)
(172)
0
0
0
(232)
(172)
0
(122)
(122)
(122)
(122)
(122)
(3)
(779)
(758)
(634)
75
(8)
(982)
43
343
1,067
8
(287)
528
642
869
0
(295)
568
691
917
0
(295)
515
638
865
137
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
5,027
1,116
56
0
6,199
6,095
37
139
605
6,875
516
Dec-14A
5,150
1,101
54
0
6,305
5,809
133
119
306
6,367
518
Dec-15F
5,670
667
50
0
6,388
5,719
133
99
306
6,257
518
Dec-16F
6,238
429
48
0
6,716
5,649
133
78
306
6,166
518
Dec-17F
6,754
315
47
0
7,115
5,586
133
58
306
6,084
518
765
166
1,447
1,702
596
428
1,542
1,184
511
428
1,456
1,184
520
428
1,465
1,184
530
428
1,475
1,184
11
1,713
267
3,427
9,647
0
9,647
11
1,195
232
2,969
9,703
0
9,703
11
1,195
232
2,883
9,761
0
9,761
11
1,195
232
2,892
9,990
0
9,990
11
1,195
232
2,902
10,297
0
10,297
Dec-13A
(3.4%)
(2.9%)
43.8%
0.23
0.79
15.25
16.3%
20.7%
133.0
14.06
194.7
12.3%
7.16%
4.65%
Dec-14A
0.5%
(3.3%)
42.1%
0.28
0.79
18.66
21.1%
23.7%
141.3
13.82
170.5
11.1%
7.04%
3.95%
Dec-15F
(13.3%)
(40.2%)
29.1%
0.32
0.80
7.11
25.0%
69.9%
130.1
13.40
142.7
6.1%
3.86%
1.31%
Dec-16F
1.8%
24.8%
35.7%
0.37
0.81
10.69
22.0%
35.3%
79.5
13.23
138.4
9.9%
5.54%
2.58%
Dec-17F
2.0%
9.8%
38.4%
0.41
0.84
12.38
22.0%
28.7%
52.7
13.21
146.0
12.1%
6.25%
3.07%
Dec-13A
30.5%
2.5%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-14A
-5.6%
2.6%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-15F
-43.0%
2.5%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-16F
-10.0%
2.8%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-17F
0.5%
2.8%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
VIP Chip Volume (% Change)
VIP Chip Win Percentage (%)
Mass mkt chip drop (% chg.)
Mass mkt chip win (%-tage)
Slot Handle (% Change)
Slot Hold Percentage (%)
Net Win Per Slot (% Change)
Net Win Per Table (% Change)
No. Of Slots
No. Of Tables
138
Company Note
Singapore
GL Limited
Current price:
Target price:
Previous target:
Up/downside:
S$0.85
S$1.26
S$1.26
48.8%
Reuters:
Bloomberg:
Market cap:
GUCL.SI
GLL SP
US$818.2m
S$1,156m
US$0.35m
S$0.49m
1,368m
33.3%
GLs UK hotels continue to benefit from improving economic and travel backdrop.
The new Value Centre General Managers (VCGM) model adopted by management
is expected to enhance hotel operating efficiency.
Maintain Add with target price of S$1.26, based on 25% discount to CY16 RNAV.
1.100
119.0
1.000
112.8
0.900
106.5
0.800
100.3
0.700
6
94.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.6
-2.1
3M
7.0
7.3
12M
-7.7
5.1
We expect GLs high-single-digit hotel RevPar growth to beat the market in FY16-17,
driven by the groups ongoing refurbishment and rebranding programme. FY16 is likely
to be an earnings sweet spot for the hotel segment, given the full-year income
contribution from the refurbished and rebranded Amba Hotel Charing Cross (239 rooms)
and Every Piccadilly (82 rooms), as well as the contribution from Amba Hotel Marble
Arch (692 rooms) that is due to start in 2QFY16.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Jun-14A
461.9
109.9
39.00
0.033
9.8%
18.22
0.014
2.39%
10.18
84.84
28.0%
0.64
3.73%
Jun-15A
423.2
102.1
47.90
0.037
11.6%
16.23
0.016
2.63%
10.60
35.01
26.7%
0.67
4.06%
Jun-16F
429.6
110.1
62.72
0.040
7.7%
15.01
0.016
2.63%
9.81
71.17
25.5%
0.66
4.43%
0%
1.20
Jun-17F
449.2
119.0
56.76
0.043
8.4%
13.85
0.016
2.63%
8.90
16.55
22.5%
0.64
4.68%
0%
1.00
Jun-18F
469.6
125.3
60.01
0.045
4.3%
13.28
0.016
2.63%
8.29
15.42
19.4%
0.63
4.80%
0%
1.00
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BY THE NUMBERS
1M
3M
12M
Relative
-2.1
7.3
5.1
Absolute
-6.6
7.0
-7.7
Major shareholders
Hong Leong Co Malaysia Bhd
% held
66.6
Norges Bank
0.6
Fidelity International
0.4
P/BV vs ROE
1.200
5.00%
30.0
20.0%
1.000
4.17%
25.0
8.3%
0.800
3.33%
20.0
-3.3%
0.600
2.50%
15.0
-15.0%
0.400
1.67%
10.0
-26.7%
0.200
0.83%
5.0
-38.3%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-50.0%
ROE (rhs)
Jun-14A
461.9
267.0
109.9
(28.8)
81.1
(25.3)
0.0
0.0
55.8
(1.9)
53.9
(15.3)
38.6
0.4
39.0
43.3
43.3
Jun-15A
423.2
243.6
102.1
(26.9)
75.2
(16.9)
0.0
0.0
58.3
1.0
59.3
(11.8)
Jun-16F
429.6
244.8
110.1
(31.4)
78.8
(12.0)
0.0
0.0
66.8
13.4
80.2
(17.9)
Jun-17F
449.2
258.4
119.0
(31.4)
87.6
(12.0)
0.0
0.0
75.6
0.0
75.6
(19.3)
Jun-18F
469.6
270.3
125.3
(31.7)
93.6
(12.0)
0.0
0.0
81.7
0.0
81.7
(22.0)
47.5
0.4
62.3
0.4
56.3
0.4
59.6
0.4
47.9
48.1
48.1
0.0
0.0
62.7
52.0
52.0
0.0
0.0
56.8
56.8
56.8
0.0
0.0
60.0
60.0
60.0
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Jun-14A
109.9
Jun-15A
102.1
Jun-16F
110.1
Jun-17F
119.0
Jun-18F
125.3
17.3
0.0
0.7
(3.7)
(31.5)
(18.4)
74.3
(39.1)
10.2
19.0
0.0
0.9
(3.9)
(21.3)
(19.2)
77.6
(55.4)
0.8
(39.3)
0.0
0.0
0.0
(12.0)
(17.9)
41.0
(30.0)
0.0
(0.2)
0.0
0.0
0.0
(12.0)
(19.3)
87.5
(40.0)
0.0
0.4
0.0
0.0
0.0
(12.0)
(22.0)
91.7
(40.0)
0.0
(0.1)
(29.0)
(36.0)
0.0
0.0
(21.0)
0.0
(54.6)
(0.7)
0.0
0.0
(20.1)
0.0
(30.0)
0.0
0.0
0.0
(20.4)
0.0
(40.0)
0.0
0.0
0.0
(20.6)
0.0
(40.0)
0.0
0.0
0.0
(20.7)
3.1
(53.9)
(8.6)
9.3
76.9
9.5
(11.3)
11.7
22.3
44.4
0.0
(20.4)
(9.5)
11.0
24.1
0.0
(20.6)
26.9
47.5
60.6
0.0
(20.7)
30.9
51.7
64.8
140
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
9
85
1
177
272
1,287
3
152
0
1,442
250
Jun-15A
22
66
1
177
265
1,220
13
126
0
1,359
21
Jun-16F
26
82
1
177
285
1,222
13
123
0
1,358
21
Jun-17F
53
85
1
177
315
1,234
13
120
0
1,366
21
Jun-18F
84
88
1
177
350
1,246
13
116
0
1,375
21
114
11
376
99
112
5
138
309
89
5
115
309
92
5
118
309
96
5
122
309
0
99
25
500
1,217
(3)
1,215
0
309
29
475
1,152
(3)
1,149
0
309
29
452
1,194
(3)
1,191
0
309
29
455
1,231
(4)
1,227
0
309
29
459
1,270
(4)
1,266
Jun-14A
21.5%
(2.14%)
23.8%
(0.26)
0.93
2.53
28.4%
49.1%
63.41
1.87
190.9
4.33%
5.75%
3.66%
Jun-15A
(8.4%)
(7.10%)
24.1%
(0.24)
0.89
3.53
19.9%
43.6%
64.99
2.03
230.1
3.77%
5.15%
3.58%
Jun-16F
1.5%
7.88%
25.6%
(0.23)
0.91
5.98
22.3%
41.7%
62.67
1.98
198.9
4.28%
5.26%
3.58%
Jun-17F
4.6%
8.01%
26.5%
(0.21)
0.93
6.65
25.5%
36.5%
67.50
1.91
172.4
4.64%
5.69%
3.96%
Jun-18F
4.5%
5.33%
26.7%
(0.18)
0.94
7.11
27.0%
35.3%
67.23
1.83
171.5
4.93%
5.93%
4.06%
Jun-14A
8.0%
19.4%
87.4%
69.6%
-7.0%
98.8%
9.0%
36.5%
N/A
N/A
N/A
N/A
Jun-15A
5.0%
22.2%
90.8%
82.8%
-23.6%
98.1%
7.5%
30.1%
N/A
N/A
N/A
N/A
Jun-16F
7.0%
27.9%
91.9%
89.0%
-30.6%
96.8%
5.1%
17.2%
N/A
N/A
N/A
N/A
Jun-17F
6.0%
24.8%
91.4%
85.5%
18.1%
97.3%
5.8%
21.3%
N/A
N/A
N/A
N/A
Jun-18F
4.5%
24.7%
91.3%
84.7%
7.2%
97.5%
5.9%
21.7%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
141
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$2.03
S$3.18
S$3.18
56.7%
Reuters:
Bloomberg:
Market cap:
GLPL.SI
GLP SP
US$6,810m
S$9,620m
US$25.97m
S$36.56m
4,742m
57.0%
Leading supplier of modern logistics warehouse space, growing fee income platform
a medium ROE driver
Leasing appetite in China still robust although incentives has risen a little
Active take-up in Japan, continued development momentum
Brazils underlying leasing momentum remains strong, US ahead of expectations
Retain Add rating with an RNAV-backed target price of S$3.18
No change.
China makes up 55% of group NAV at present. Demand for space remained robust with
1m sq m of new leases signed in 2QFY16 at 8.6% higher renewal rents. Although tenant
retention declined marginally, occupancy remained at a high 89% on slightly higher rent
incentives. We expect contributions from China to be back-end loaded as only 20% of
the FY16 targeted development completions have been met at half time.
Price Close
2.80
107.8
2.30
97.4
1.80
600
87.0
Vol m
400
200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.2
-5.7
3M
-0.5
-0.2
12M
-21.3
-8.5
Brazil and the US currently account for c.12% of NAV. Operationally, Brazil enjoys
robust demand which pushes up occupancy to 95% and raises same-store rent by 6.8%
yoy. However, a 65bp cap rate expansion resulted in a revaluation deficit. Meanwhile,
US income from GLP US Income Partners I and GLP US Income Partners II will boost
contribution from this geography.
Reiterate Add
The longer term prospects for the modern logistics warehouse sector remains intact in
GLPs key markets, led by strong domestic consumption and the lack of modern
warehouse space. In addition, increasing AUM would result in higher fee income and
boost ROE in the longer run. We maintain our Add rating with an RNAV-based target
price of S$3.18.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
625
393.4
701.0
0.062
(9%)
23.34
0.033
2.32%
23.80
NA
11.5%
0.78
3.42%
Mar-15A
708
392.8
481.1
0.016
(73%)
87.09
0.041
2.88%
31.41
3.68
11.0%
0.79
0.91%
Mar-16F
840
488.2
712.9
0.044
169%
32.37
0.041
2.88%
30.99
NA
29.3%
0.75
2.36%
2.31
Mar-17F
1,022
572.3
318.8
0.067
51%
21.37
0.041
2.88%
29.44
14.01
37.3%
0.74
3.50%
0.90
Mar-18F
1,174
644.7
368.1
0.078
15%
18.51
0.041
2.88%
26.52
9.92
34.0%
0.73
3.98%
1.00
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-5.7
-0.2
-8.5
Absolute
-10.2
-0.5
Major shareholders
GIC
Hillhouse Capital
-21.3
% held
35.7
7.3
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
4.50%
3.94%
3.38%
2.81%
2.25%
1.69%
1.13%
0.56%
0.00%
Growth
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
3,500%
3,100%
2,700%
2,300%
1,900%
1,500%
1,100%
700%
300%
-100%
-500%
ROE (rhs)
Mar-14A
625
625
393
(5)
388
(81)
25
16
348
535
883
(142)
Mar-15A
708
708
393
(8)
385
(87)
41
0
338
519
857
(194)
Mar-16F
840
840
488
(7)
481
(100)
89
0
470
578
1,048
(138)
Mar-17F
1,022
1,022
572
(8)
565
(136)
105
0
534
0
534
(85)
Mar-18F
1,174
1,174
645
(8)
636
(163)
111
0
585
0
585
(94)
741
(40)
0
663
(182)
0
911
(198)
0
448
(129)
0
491
(123)
0
701
293
293
481
80
80
713
210
210
319
319
319
368
368
368
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Mar-14A
393
305
Mar-15A
393
473
Mar-16F
488
Mar-17F
572
Mar-18F
645
(154)
(85)
(114)
(416)
562
(89)
(14)
742
(853)
0
(500)
563
(93)
(28)
807
(2,131)
2,869
(560)
666
(106)
(17)
317
(2,553)
1,323
39
98
(136)
(9)
479
(2,906)
514
60
105
(164)
0
530
(3,357)
514
0
29
(824)
(221)
0
0
(150)
(1,340)
510
(92)
1,174
159
0
(174)
0
0
(1,230)
0
(253)
0
(196)
0
0
(2,392)
2,400
0
0
(196)
0
0
(2,843)
3,000
0
0
(196)
454
83
1,759
2,918
0
2,204
2
2,805
6
(443)
143
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
1,501
Mar-15A
1,446
Mar-16F
90
Mar-17F
380
Mar-18F
874
406
0
3
1,910
58
11,883
491
0
12,431
158
475
0
1,467
3,387
52
13,535
488
0
14,075
371
545
0
1,613
2,248
97
16,522
488
0
17,107
1,692
664
0
1,775
2,819
142
18,453
488
0
19,082
2,350
763
0
1,952
3,589
186
18,880
488
0
19,554
2,459
645
22
824
2,504
811
22
1,204
2,476
866
29
2,587
2,336
1,055
35
3,440
3,245
1,211
41
3,712
3,396
890
3,394
0
4,218
8,758
1,366
10,123
1,019
3,496
0
4,700
8,780
3,983
12,762
933
3,269
0
5,856
9,044
4,381
13,425
1,136
4,380
0
7,820
9,167
4,819
13,986
1,304
4,701
0
8,412
9,339
5,301
14,640
Mar-14A
(2.7%)
6.4%
63.0%
(0.24)
1.84
4.39
16.1%
95%
207.4
N/A
N/A
113%
3.21%
1.98%
Mar-15A
13.3%
(0.2%)
55.5%
(0.29)
1.81
4.13
22.7%
NA
227.0
N/A
N/A
102%
2.75%
1.33%
Mar-16F
18.6%
24.3%
58.2%
(0.83)
1.91
4.53
13.1%
146%
222.4
N/A
N/A
25%
2.95%
2.28%
Mar-17F
21.7%
17.2%
56.0%
(1.10)
1.93
4.14
16.0%
62%
216.0
N/A
N/A
26%
3.05%
2.73%
Mar-18F
14.8%
12.6%
54.9%
(1.05)
1.97
3.88
16.0%
53%
221.8
N/A
N/A
27%
3.18%
2.79%
Mar-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
58.2%
N/A
Mar-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
46.5%
N/A
Mar-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
57.3%
N/A
Mar-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
55.2%
N/A
Mar-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
54.2%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (US$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (US$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
144
Company Note
Singapore
Golden Agri-Resources
Current price:
Target price:
Previous target:
Up/downside:
S$0.34
S$0.35
S$0.35
2.9%
Reuters:
Bloomberg:
Market cap:
GAGR.SI
GGR SP
US$3,065m
S$4,330m
US$6.40m
S$9.00m
12,838m
50.0%
No changes.
The group maintained its output growth guidance of 0-5% for 2015. It also revealed that
70% of its estates were severely affected by the recent Indonesian drought and
preliminary indications were that the El Nino-induced drought could cut Indonesia palm
oil output by 10% in 2016 and raise CPO prices to around US$700 per tonne.
Price Close
0.520
103.0
0.470
96.0
0.420
89.0
0.370
82.0
0.320
75.0
0.270
150
68.0
Vol m
100
50
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.3
-4.8
3M
13.3
13.6
12M
-24.5
-11.7
The accounting changes of IAS 41 will reduce GGRs shareholders equity by US$5bn to
US$3.71bn and raise the groups depreciation charges by around US$77m beginning in
FY16 as the new accounting policy requires the mature estates to be depreciated over
their useful lives. The group has also revealed that its debt-over-equity ratio will rise from
0.35x to 0.83x following the accounting changes but it will not affect any of its debt
covenants, which have a threshold debt-to-equity ratio of 1.5x.
Financial Summary
Analyst
Ivy NG Lee Fang, CFA
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
6,585
612.9
311.3
0.024
(32.9%)
10.14
0.009
3.66%
8.64
10.9
22.7%
0.35
3.69%
Dec-14A
7,619
527.2
113.6
0.016
(32.9%)
14.59
0.004
1.84%
10.97
9.4
28.1%
0.35
2.45%
Dec-15F
8,034
542.5
169.0
0.015
(7.7%)
15.77
0.004
1.64%
10.45
23.7
26.4%
0.35
2.24%
0.90
Dec-16F
9,236
626.3
171.4
0.013
(13.0%)
18.03
0.004
1.66%
9.52
NA
29.2%
0.34
1.92%
0.71
Dec-17F
9,999
706.7
213.6
0.016
24.7%
14.58
0.005
2.07%
8.49
107.2
29.1%
0.34
2.36%
0.76
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-4.8
13.6
-11.7
Absolute
-9.3
13.3
-24.5
Major shareholders
The Widjaja Family Master Trust
% held
50.0
P/BV vs ROE
1.20
9.0%
35.0
700%
1.00
7.5%
30.0
571%
0.80
6.0%
25.0
443%
20.0
314%
15.0
186%
10.0
57%
0.60
4.5%
0.40
3.0%
0.20
1.5%
5.0
-71%
0.00
Jan-11
0.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-200%
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
ROE (rhs)
Dec-13A
6,585
1,363
613
(134)
479
(85)
(1)
0
393
37
430
(114)
Dec-14A
7,619
1,311
527
(149)
378
(94)
(1)
0
284
(126)
158
(41)
Dec-15F
8,034
1,369
543
(161)
381
(130)
2
0
253
(35)
218
(44)
Dec-16F
9,236
1,576
626
(238)
388
(131)
2
0
259
0
259
(82)
Dec-17F
9,999
1,735
707
(255)
451
(136)
2
0
317
0
317
(97)
316
(5)
0
0
0
311
318
318
117
(3)
0
0
0
114
214
221
174
(5)
0
0
0
169
197
205
177
(5)
0
0
0
171
171
179
220
(7)
0
0
0
214
214
221
Dec-13A
612.9
0.0
(384.6)
0.0
0.0
0.0
(84.8)
(113.9)
29.6
(459.9)
0.0
0.0
0.0
(459.9)
726.3
0.0
0.0
(113.1)
Dec-14A
527.2
0.0
(188.3)
0.0
0.0
0.0
(93.7)
(40.9)
204.3
(349.5)
0.0
0.0
0.0
(349.5)
487.7
0.0
0.0
(56.9)
Dec-15F
542.5
0.0
135.9
0.0
0.0
0.0
(130.5)
(43.5)
504.3
(300.0)
0.0
0.0
0.0
(300.0)
(68.4)
0.0
0.0
(50.7)
Dec-16F
626.3
0.0
(351.3)
0.0
0.0
0.0
(131.2)
(82.2)
61.7
(300.0)
0.0
0.0
0.0
(300.0)
100.0
0.0
0.0
(51.4)
Dec-17F
706.7
0.0
(143.5)
0.0
0.0
0.0
(136.4)
(96.7)
330.1
(300.0)
0.0
0.0
0.0
(300.0)
0.0
0.0
0.0
(64.1)
(417.0)
196.1
(234.2)
296.0
(328.6)
0.0
430.8
285.6
342.4
(26.1)
0.0
(119.1)
85.2
135.9
342.4
0.0
48.6
(189.8)
(138.3)
(103.3)
0.0
(64.1)
(34.0)
30.1
169.6
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
146
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
587
1,180
772
0
2,539
2,351
691
579
7,988
11,610
1,060
0
786
39
1,884
1,521
0
56
1,577
1,884
5,345
8,721
83
8,803
Dec-14A
591
1,353
851
0
2,794
2,552
813
606
7,902
11,872
1,641
0
830
30
2,501
1,427
0
77
1,504
1,844
5,848
8,729
90
8,818
Dec-15F
641
1,352
897
0
2,890
2,690
815
606
7,902
12,013
1,500
0
1,007
30
2,536
1,500
0
81
1,581
1,844
5,961
8,847
95
8,942
Dec-16F
451
1,616
1,031
0
3,099
2,752
817
606
7,902
12,077
1,600
0
1,042
30
2,672
1,500
0
93
1,593
1,844
6,108
8,967
100
9,067
Dec-17F
417
1,736
1,116
0
3,270
2,797
819
606
7,902
12,123
1,600
0
1,096
30
2,725
1,500
0
101
1,601
1,844
6,170
9,116
107
9,223
Dec-13A
8.8%
(17.7%)
9.31%
(0.16)
0.68
4.71
26.5%
41.2%
24.23
56.34
43.38
3.51%
3.87%
2.54%
Dec-14A
15.7%
(14.0%)
6.92%
(0.19)
0.68
3.18
25.9%
23.7%
23.96
46.94
31.80
2.58%
2.99%
2.22%
Dec-15F
5.4%
2.9%
6.75%
(0.18)
0.69
2.76
20.0%
24.9%
24.55
47.86
34.60
2.52%
2.83%
2.14%
Dec-16F
15.0%
15.4%
6.78%
(0.21)
0.70
2.87
31.8%
30.0%
23.81
46.07
35.26
2.56%
2.82%
1.89%
Dec-17F
8.3%
12.8%
7.07%
(0.21)
0.71
3.24
30.5%
30.0%
24.46
47.43
34.55
2.88%
3.23%
2.17%
Dec-13A
371,102
338,490
20.5
-5.3%
854
Dec-14A
371,951
344,778
21.8
8.2%
818
Dec-15F
375,951
352,566
21.8
1.5%
670
Dec-16F
379,951
357,880
23.2
8.0%
750
Dec-17F
383,951
357,694
24.0
3.4%
800
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
147
Company Note
Singapore
Guocoland
Current price:
Target price:
Previous target:
Up/downside:
S$1.85
S$2.73
S$2.73
48.2%
Reuters:
Bloomberg:
Market cap:
GUOC.SI
GUOL SP
US$1,545m
S$2,183m
US$0.15m
S$0.22m
1,926m
32.0%
124.3
2.00
113.2
1.80
102.1
1.60
4
3
2
1
91.0
Vol m
135.4
2.20
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
2.40
Dec-14
Completion of the 1.7msf GFA Tanjong Pagar Centre (estimated GDV of S$3bn) will
likely boost the groups recurrent income base. The 80%-owned development comprises
890,000sf of office space, 100,000sf of retail area, 181 residential units, 222 hotel rooms
and 150,000sf of urban area. The office component is scheduled to be completed in
2Q16. Leasing activities are ongoing and it recently signed a 31,000sf rental contract
with Virgin Active for a state-of-the-art fitness space
No Change
Price Close
1M
-1.3
3.2
3M
-5.2
-4.9
12M
4.2
17.0
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Jun-14A
1,251
254.1
294.8
0.10
369%
18.98
0.050
2.71%
25.15
3.0
146%
0.77
4.54%
Jun-15A
1,160
306.6
217.0
0.14
39%
13.66
0.073
3.97%
21.85
19.4
140%
0.70
5.75%
Jun-16F
708
206.1
643.5
0.07
(47%)
25.86
0.065
3.54%
21.07
0.7
58%
0.59
2.62%
6.04
Jun-17F
919
364.8
151.3
0.13
79%
14.43
0.058
3.12%
11.47
5.7
51%
0.58
4.26%
1.02
Jun-18F
1,276
412.0
298.1
0.25
97%
7.33
0.063
3.41%
8.95
587.9
37%
0.54
8.02%
1.29
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
3.2
-4.9
17.0
Absolute
-1.3
-5.2
Major shareholders
Guoco Group
4.2
P/BV vs ROE
1.40
7.0%
1.20
6.0%
1.00
5.0%
% held
0.80
4.0%
68.0
0.60
3.0%
0.40
2.0%
0.20
1.0%
0.00
Jan-12
0.0%
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Growth
1,000
900
800
700
600
500
400
300
200
100
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
6,000%
5,300%
4,600%
3,900%
3,200%
2,500%
1,800%
1,100%
400%
-300%
-1,000%
ROE (rhs)
Jun-14A
1,251
312
254
(13)
241
(74)
19
3
189
222
410
(77)
Jun-15A
1,160
398
307
(14)
293
(55)
1
5
244
75
319
(75)
Jun-16F
708
277
206
(14)
192
(80)
8
6
126
669
795
(131)
Jun-17F
919
461
365
(14)
351
(100)
8
6
265
0
265
(49)
Jun-18F
1,276
551
412
(14)
398
(96)
112
6
421
0
421
(60)
333
(29)
(9)
244
(17)
(9)
664
(12)
(9)
216
(55)
(9)
361
(54)
(9)
295
115
115
217
160
160
643
84
84
151
151
151
298
298
298
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Jun-14A
254
(19)
(24)
13
Jun-15A
307
(1)
(140)
14
Jun-16F
206
(8)
368
14
Jun-17F
365
(8)
212
14
Jun-18F
412
(112)
356
14
87
(86)
(67)
144
(89)
30
(65)
(47)
83
(231)
677
(88)
(82)
1,073
(732)
21
(121)
(131)
338
(293)
126
(117)
(49)
615
(111)
254
10
175
400
163
(2)
3
(2)
(233)
262
0
2,100
0
2,100
3,468
(1,187)
0
233
0
233
174
(132)
0
0
0
(111)
(500)
0
(65)
(65)
(96)
(87)
(77)
(596)
(98)
(43)
155
0
(1,284)
0
(219)
0
(577)
149
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
716
4,287
472
1
0
5,475
406
2,801
0
37
3,244
2,299
Jun-15A
663
4,711
561
0
150
6,085
435
2,948
0
43
3,426
1,607
Jun-16F
1,834
4,343
590
0
150
6,917
435
1,588
0
43
2,066
1,607
Jun-17F
1,908
3,991
766
0
150
6,815
435
1,656
0
43
2,134
1,607
Jun-18F
1,848
3,392
1,064
0
150
6,454
435
1,880
0
43
2,357
1,607
429
47
2,774
2,768
527
181
2,315
3,673
556
229
2,392
2,486
592
148
2,347
2,354
646
158
2,412
1,854
203
2,971
0
5,746
2,821
153
2,974
227
3,900
0
6,216
3,137
160
3,296
227
2,713
0
5,105
3,707
171
3,878
227
2,581
0
4,928
3,795
226
4,021
227
2,081
0
4,493
4,039
280
4,319
Jun-14A
84.7%
96.5%
20.3%
(3.68)
2.38
2.79
18.8%
75.7%
124.4
0.24
228.6
4.11%
3.12%
1.93%
Jun-15A
(7.3%)
20.7%
26.4%
(3.90)
2.65
4.53
23.5%
61.0%
162.6
0.15
228.8
5.14%
3.64%
2.35%
Jun-16F
(39.0%)
(32.8%)
29.1%
(1.91)
3.13
2.19
16.4%
NA
297.5
0.00
460.1
3.07%
2.41%
0.67%
Jun-17F
29.8%
77.0%
39.7%
(1.73)
3.21
2.90
18.6%
45.0%
269.2
0.00
457.6
6.10%
4.66%
3.33%
Jun-18F
38.8%
12.9%
32.3%
(1.36)
3.41
3.40
14.1%
25.0%
261.6
0.00
311.9
7.12%
5.32%
4.96%
Jun-14A
N/A
N/A
N/A
N/A
25.0%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
34.3%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
39.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
50.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
43.2%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
150
Company Note
Singapore
Ho Bee Land
Current price:
Target price:
Previous target:
Up/downside:
S$2.00
S$2.68
S$2.68
34.3%
Reuters:
Bloomberg:
Market cap:
HBEE.SI
HOBEE SP
US$940.8m
S$1,329m
US$0.09m
S$0.13m
703.3m
26.6%
2.400
120.0
2.200
111.7
2.000
103.3
1.800
3
95.0
Vol m
No change.
Price Close
In addition to having the almost fully-occupied The Metropolis at Buona Vista in its
stable, Ho Bee is one of the first movers in the London office property market. Since
then, it has built up a portfolio of six office buildings in London totalling c.1m sq ft of NLA.
In total, investment properties are valued at c.S$2.8bn as at Dec 15, of which cS$1.3bn
is from UK. Some of these properties are currently under-rented, with medium-term
upside potential when the leases are renewed.
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.8
5.3
3M
2.3
2.6
12M
2.8
15.6
FY16-17 development earnings are projected to improve with the expected completion
of the Australian residential projects, Pearl in Doncaster, Melbourne and Rhapsody in
Surfers Paradise in early 2016. The Pearl is c.86% sold with an ASP of A$8,000/sq m,
while Rhapsody is more than 70% taken up. These should produce healthy profit
margins in the high teens given the low land costs.
Maintain Add
We maintain our Add call on Ho Bee with an unchanged RNAV-backed target price of
S$2.68. Investment properties now account for c.70% of group GAV and the stable
income provides a good buffer for earnings before contributions from completed
overseas projects flow in from FY16 onwards. Potential catalysts are earnings delivery
from overseas development projects and further earnings-accretive acquisitions.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
139.3
21.6
591.8
0.03
(88%)
78.33
0.100
5.01%
79.75
5.76
15.0%
0.58
0.85%
Dec-14A
99.6
60.7
314.0
0.06
124%
34.33
0.063
3.13%
37.23
NA
34.6%
0.51
1.58%
Dec-15F
134.7
99.6
68.9
0.10
70%
20.20
0.063
3.13%
27.95
5.96
53.4%
0.51
2.52%
1.00
Dec-16F
192.3
120.6
78.7
0.12
19%
16.92
0.063
3.13%
23.38
17.21
53.8%
0.50
2.96%
0.68
Dec-17F
342.0
149.5
113.6
0.17
44%
11.72
0.063
3.13%
16.74
2.55
38.7%
0.48
4.17%
0.93
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
5.3
2.6
15.6
Absolute
0.8
2.3
2.8
Major shareholders
Ho Bee Holdings
% held
72.6
P/BV vs ROE
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
18.0%
15.8%
13.5%
11.3%
9.0%
6.8%
4.5%
2.3%
0.0%
120
200%
100
142%
80
83%
60
25%
40
-33%
20
-92%
0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-150%
ROE (rhs)
Dec-13A
139.3
139.3
21.6
(0.9)
20.7
(0.6)
12.1
0.0
32.2
578.3
610.5
(4.3)
Dec-14A
99.6
99.6
60.7
(1.0)
59.8
(16.6)
(2.7)
0.0
40.5
281.4
321.9
(7.4)
Dec-15F
134.7
134.7
99.6
(1.0)
98.6
(23.2)
2.2
0.0
77.6
3.5
81.0
(11.3)
Dec-16F
192.3
192.3
120.6
(1.0)
119.6
(46.6)
21.8
0.0
94.8
0.0
94.8
(15.2)
Dec-17F
342.0
342.0
149.5
0.0
149.5
(52.1)
37.6
0.0
135.0
0.0
135.0
(20.3)
606.2
(14.4)
0.0
314.5
(0.5)
0.0
69.7
(0.8)
0.0
79.7
(1.0)
0.0
114.8
(1.2)
0.0
591.8
17.5
17.5
314.0
39.1
39.1
68.9
65.9
65.9
78.7
78.7
78.7
113.6
113.6
113.6
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Dec-13A
21.6
Dec-14A
60.7
Dec-15F
99.6
Dec-16F
120.6
Dec-17F
149.5
244.7
(60.2)
(251.1)
(11.4)
315.4
0.0
(18.5)
247.7
(5.7)
0.0
(17.4)
(16.9)
(1.7)
0.0
(8.1)
(159.6)
(1.7)
0.0
(9.5)
99.8
(1.7)
0.0
(13.5)
451.4
(1.7)
(10.9)
(16.6)
7.6
(48.3)
(484.4)
(486.1)
315.2
(19.0)
(429.8)
(431.5)
814.5
0.0
(48.2)
(49.9)
27.5
0.0
(2.3)
(3.9)
74.5
0.0
(54.2)
(33.6)
(33.4)
(33.4)
(33.4)
(5.3)
(100.1)
(18.0)
244.6
(23.5)
757.6
(52.8)
(58.7)
(52.1)
(10.9)
152
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
118
204
52
0
4
377
21
2,594
0
0
2,615
371
Dec-14A
10
80
43
0
169
302
22
3,361
0
0
3,382
164
Dec-15F
176
341
58
0
150
725
22
3,688
0
0
3,710
333
Dec-16F
168
435
83
0
150
836
23
3,773
0
0
3,796
339
Dec-17F
604
394
148
0
150
1,295
25
3,821
0
0
3,846
355
113
44
528
99
89
40
293
752
81
55
469
1,266
165
78
582
1,288
443
139
936
1,346
18
116
0
645
2,331
17
2,348
24
775
0
1,069
2,601
15
2,616
32
1,298
0
1,767
2,637
29
2,665
46
1,333
0
1,915
2,682
29
2,711
20
1,366
0
2,302
2,762
73
2,835
Dec-13A
(69.8%)
(84%)
15.5%
(0.52)
3.44
3.92
0.7%
401%
142.3
N/A
N/A
4.7%
1.00%
1.05%
Dec-14A
(28.5%)
182%
61.0%
(1.36)
3.90
3.32
2.3%
103%
173.8
N/A
N/A
40.3%
1.93%
1.40%
Dec-15F
35.2%
64%
73.9%
(2.13)
3.95
4.19
14.0%
51%
137.0
N/A
N/A
44.5%
2.54%
2.11%
Dec-16F
42.8%
21%
62.7%
(2.19)
4.02
2.27
16.0%
42%
134.3
N/A
N/A
22.8%
2.92%
2.61%
Dec-17F
77.8%
24%
43.7%
(1.64)
4.14
2.87
15.0%
29%
123.0
N/A
N/A
27.7%
3.37%
3.23%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
18.5%
81.5%
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
0.0%
N/A
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
99.1%
0.9%
N/A
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
76.3%
23.7%
N/A
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
43.5%
56.5%
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
153
Company Note
Singapore
IHH Healthcare
Current price:
Target price:
Previous target:
Up/downside:
S$2.11
S$2.52
S$2.52
19.6%
Reuters:
Bloomberg:
Market cap:
IHHH.SI
IHH SP
US$12,281m
S$17,351m
US$0.08m
S$0.11m
8,223m
18.3%
IHH's strong pipeline will increase bed capacity by more than 40% over the next
three years. The most significant will be Gleneagles HK (completion early-2017).
Management sees prices in HK being 30-50% higher than Singapore with similar
EBITDAR margins. For perspective, Singapore forms 45% of group net profit.
With a large portfolio of mature hospitals, we do not expect much margin pressure
despite the influx of new capacity.
Maintain Add. IHH is poised for a runway of growth. Beyond its core markets and
HK, IHH has also made inroads into India and China for its next phase of growth.
2.00
116.9
1.80
105.4
1.60
40
30
20
10
94.0
Vol m
2.20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
1.0
5.5
3M
10.5
9.7
12M
14.4
27.9
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
6,756
1,750
631
0.07
37.3%
91.28
0.020
0.31%
31.89
473.5
11.6%
2.86
3.21%
Dec-14A
7,344
1,943
754
0.09
24.0%
73.73
0.030
0.47%
28.63
100.6
8.5%
2.68
3.75%
Dec-15F
8,396
2,165
893
0.12
41.2%
52.14
0.022
0.34%
26.37
NA
12.3%
2.60
5.05%
0.94
Dec-16F
10,343
2,703
1,281
0.16
27.9%
40.86
0.031
0.49%
21.06
94.9
10.4%
2.47
6.19%
1.10
Dec-17F
11,771
3,002
1,465
0.18
14.3%
35.73
0.036
0.56%
18.85
64.1
7.8%
2.34
6.73%
1.04
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
5.5
9.7
27.9
Absolute
1.0
10.5
14.4
Major shareholders
% held
43.5
20.2
9.0
P/BV vs ROE
3.00
7.00%
60.0
50%
2.50
5.83%
50.0
32%
2.00
4.67%
40.0
13%
1.50
3.50%
30.0
-5%
1.00
2.33%
20.0
-23%
0.50
1.17%
10.0
-42%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-60%
ROE (rhs)
Dec-13A
6,756
3,089
1,750
(601)
1,149
(270)
2
0
882
Dec-14A
7,344
3,298
1,943
(607)
1,336
(124)
10
0
1,221
Dec-15F
8,396
3,795
2,165
(620)
1,545
(211)
5
0
1,338
Dec-16F
10,343
4,717
2,703
(692)
2,011
(178)
5
0
1,838
Dec-17F
11,771
5,356
3,002
(757)
2,245
(171)
5
0
2,079
882
(148)
1,221
(278)
1,338
(303)
1,838
(399)
2,079
(447)
734
(103)
943
(189)
1,036
(143)
1,439
(158)
1,631
(167)
631
564
564
754
704
704
893
1,001
1,001
1,281
1,281
1,281
1,465
1,465
1,465
Cash Flow
(RMm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
1,750
Dec-14A
1,943
Dec-15F
2,165
Dec-16F
2,703
Dec-17F
3,002
(187)
(11)
28
41
47
(52)
(329)
(183)
999
(1,426)
(98)
(190)
(203)
1,441
(909)
0
(268)
(303)
1,622
(1,615)
0
(213)
(399)
2,131
(1,615)
0
(213)
(447)
2,388
(1,615)
(217)
87
(1,556)
665
0
(212)
375
(746)
(179)
83
0
(762)
(2,377)
0
0
0
35
(1,579)
0
0
0
42
(1,573)
0
0
(164)
(179)
(256)
(293)
(264)
(525)
170
516
885
(268)
(447)
(1,202)
(755)
(487)
(213)
(470)
82
552
765
(213)
(506)
309
816
1,029
0
122
787
230
109
(228)
155
BY THE NUMBERS
Balance Sheet
(RMm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
2,145
1,002
153
114
3,414
9,366
2,097
11,509
875
23,847
291
Dec-14A
2,468
1,028
172
74
3,741
9,148
2,212
11,692
1,847
24,900
677
Dec-15F
1,534
1,150
171
74
2,929
10,208
2,217
11,628
2,666
26,718
677
Dec-16F
1,829
1,417
209
74
3,529
11,193
2,222
11,565
2,666
27,646
677
Dec-17F
2,352
1,613
239
74
4,278
12,113
2,227
11,504
2,666
28,509
677
1,331
221
1,843
4,170
1,391
291
2,358
3,593
1,540
291
2,507
3,593
1,886
291
2,853
3,593
2,159
291
3,126
3,593
390
4,560
935
7,338
18,075
1,848
19,923
438
4,031
938
7,327
19,452
1,862
21,313
438
4,031
938
7,476
20,166
2,005
22,171
438
4,031
938
7,822
21,191
2,163
23,353
438
4,031
938
8,095
22,362
2,330
24,692
Dec-13A
17.4%
3.4%
25.9%
(0.28)
2.22
3.50
16.8%
25.8%
50.86
14.43
133.1
5.60%
4.90%
3.79%
Dec-14A
8.7%
11.0%
26.5%
(0.22)
2.38
7.04
22.8%
32.5%
50.44
14.65
122.8
6.22%
5.41%
3.82%
Dec-15F
14.3%
11.4%
25.8%
(0.33)
2.45
5.76
22.6%
20.0%
47.34
13.59
116.2
6.93%
5.94%
4.28%
Dec-16F
23.2%
24.9%
26.1%
(0.30)
2.58
9.42
21.7%
20.0%
45.42
12.36
111.4
8.36%
7.32%
5.32%
Dec-17F
13.8%
11.0%
25.5%
(0.23)
2.72
10.52
21.5%
20.0%
46.97
12.76
115.1
9.00%
7.82%
5.64%
Dec-13A
N/A
N/A
68.0%
N/A
4,194.0
N/A
N/A
Dec-14A
N/A
N/A
70.7%
N/A
4,521.0
N/A
N/A
Dec-15F
N/A
N/A
67.2%
N/A
4,918.2
N/A
N/A
Dec-16F
N/A
N/A
68.0%
N/A
5,114.6
N/A
N/A
Dec-17F
N/A
N/A
68.0%
N/A
5,337.6
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (RM)
BVPS (RM)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
No. Of Patient Admissions (m P.a.)
Revenue Per Patient Bed (RM)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load
156
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.50
S$0.60
S$0.60
20.5%
Reuters:
Bloomberg:
Market cap:
IFAR.SI
IFAR SP
US$489.1m
S$691.0m
US$0.26m
S$0.37m
1,448m
30.4%
No change.
In view of this, it has lowered its 2015 FFB output guidance by 100k tonnes to 3.3m
tonnes and its new planting target from 5,000-8,000ha for 2015 to 2,000ha for palm oil
for 2015, due to the dry weather. The group expects the drought and haze that its
estates experienced in 2015 to reduce its 1H16 and 2H17 palm oil production.
Price Close
0.800
105.1
0.700
97.3
0.600
89.6
0.500
81.8
0.400
6
74.0
Vol m
Indofood Agri's (IFAR) 9M15 core net profit (excluding forex losses) fell 55% yoy due to
weaker plantation earnings as well as losses from CMAA (its 50%-owned sugar JV in
Brazil). The group posted higher forex losses of Rp482bn in 9M15 arising from
translation loss on its US$250m debt as the rupiah weakened to Rp/US$14,657 as at 30
Sep 2015. This caused the group to post losses on its reported earnings. The good
news is that the rupiah has since appreciated.
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.4
-7.9
3M
6.5
6.8
12M
-31.3
-18.5
We project a stronger 4Q for IFAR thanks to the sale of inventory brought forward from
3Q, better performance from CMAA, and the absence of forex losses. For FY16, we
expect IFAR to deliver stronger earnings on the back of higher CPO and sugar prices.
We project CPO price to increase 12.5% to an average of RM2,450 per tonne for 2016.
[X]
Financial Summary
Analyst
Ivy NG Lee Fang, CFA
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (Rpb)
Operating EBITDA (Rpb)
Net Profit (Rpb)
Normalised EPS (Rp)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (Rp)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Normalised EPS/consensus EPS (x)
Dec-13A
13,280
2,620
550.4
476.2
(32.8%)
10.22
46.83
0.96%
7.82
NA
21.9%
0.50
4.99%
Dec-14A
14,963
3,505
809.7
559.2
17.4%
8.70
47.93
0.98%
6.26
99.59
26.3%
0.48
5.66%
Dec-15F
16,285
2,733
380.2
262.6
(53.0%)
18.54
22.51
0.46%
8.53
NA
28.9%
0.47
2.57%
0.90
Dec-16F
18,634
3,301
629.9
435.1
65.7%
11.19
37.29
0.77%
7.38
NA
29.2%
0.45
4.11%
0.93
Dec-17F
19,598
3,553
732.1
505.7
16.2%
9.63
43.35
0.89%
7.06
NA
28.5%
0.43
4.57%
0.83
Powered by
EFA
BY THE NUMBERS
1M
-7.9
-12.4
Major shareholders
Indofood Singapore Holdings
3M
6.8
6.5
12M
P/BV vs ROE
2.50
12.0%
2.00
9.6%
-18.5
-31.3
35.0
120%
30.0
91%
25.0
63%
% held
1.50
7.2%
20.0
34%
69.6
1.00
4.8%
15.0
6%
10.0
-23%
5.0
-51%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-80%
0.50
2.4%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
ROE (rhs)
Dec-13A
13,280
3,204
2,620
(783)
1,837
(354)
(6)
0
1,478
(139)
1,338
(380)
Dec-14A
14,963
3,610
3,505
(813)
2,692
(512)
(121)
0
2,058
0
2,058
(679)
Dec-15F
16,285
3,929
2,733
(833)
1,900
(576)
(235)
0
1,088
0
1,088
(397)
Dec-16F
18,634
4,495
3,301
(855)
2,447
(618)
(175)
0
1,654
0
1,654
(549)
Dec-17F
19,598
4,728
3,553
(876)
2,677
(662)
(125)
0
1,890
0
1,890
(605)
959
(408)
0
0
0
0
550
1,098
689
1,379
(569)
0
0
0
0
810
1,379
810
691
(311)
0
0
0
0
380
691
380
1,105
(475)
0
0
0
0
630
1,105
630
1,285
(553)
0
0
0
0
732
1,285
732
Dec-13A
2,620
Dec-14A
3,505
Dec-15F
2,733
Dec-16F
3,301
Dec-17F
3,553
(78)
(147)
(105)
(235)
(576)
(397)
1,447
(2,500)
0
0
0
(2,500)
0
0
0
(33)
0
267
235
(819)
(1,053)
(273)
(175)
(618)
(549)
1,812
(2,500)
0
0
0
(2,500)
0
0
0
(54)
0
350
296
(392)
(688)
135
(124)
(662)
(605)
2,057
(2,500)
0
0
0
(2,500)
0
0
0
(63)
0
322
259
(184)
(443)
424
Cash Flow
(Rpb)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
298
329
(333)
(749)
2,166
(3,091)
15
0
(1,754)
(4,830)
1,719
0
(212)
(387)
0
0
1,119
(1,545)
(946)
(2,146)
412
103
(512)
(725)
2,783
(3,057)
0
0
(650)
(3,707)
995
0
(166)
(244)
0
122
707
(217)
71
(183)
158
BY THE NUMBERS
Balance Sheet
(Rpb)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
3,803
1,433
1,568
134
6,938
9,781
1,263
3,248
16,476
30,767
4,490
0
1,937
77
6,504
4,305
Dec-14A
3,586
1,222
1,773
231
6,812
11,027
1,218
3,254
17,844
33,342
4,749
0
2,058
144
6,951
5,068
Dec-15F
2,767
1,330
1,930
252
6,279
12,693
1,045
3,254
18,017
35,009
4,749
0
2,265
144
7,159
5,068
Dec-16F
2,375
1,522
2,208
288
6,394
14,339
870
3,254
18,192
36,654
4,749
0
2,624
144
7,518
5,068
Dec-17F
2,192
1,601
2,323
303
6,418
15,963
745
3,254
18,317
38,278
4,749
0
2,727
144
7,621
5,068
555
4,860
3,508
14,872
13,996
8,837
22,833
615
5,684
3,802
16,437
14,629
9,088
23,717
670
5,738
3,983
16,879
15,009
9,400
24,408
766
5,835
4,181
17,533
15,639
9,875
25,514
806
5,874
4,399
17,894
16,372
10,428
26,800
Dec-13A
(4.1%)
(20.2%)
19.7%
(3,448)
9,667
3.41
28.4%
9.83%
29.99
62.62
68.66
6.65%
5.99%
4.00%
Dec-14A
12.7%
33.8%
23.4%
(4,304)
10,104
3.63
33.0%
8.57%
26.78
53.72
64.22
8.79%
8.06%
4.86%
Dec-15F
8.8%
(22.0%)
16.8%
(4,870)
10,367
2.43
36.5%
8.57%
24.72
54.70
63.86
5.73%
5.57%
3.11%
Dec-16F
14.4%
20.8%
17.7%
(5,140)
10,802
2.97
33.2%
8.57%
24.21
53.57
63.29
6.98%
6.82%
4.09%
Dec-17F
5.2%
7.6%
18.1%
(5,267)
11,308
3.09
32.0%
8.57%
25.13
55.61
65.68
7.23%
7.16%
4.44%
Dec-13A
239,921
176,624
14.3
-2.6%
857
Dec-14A
246,055
185,181
16.0
12.6%
821
Dec-15F
254,055
197,263
15.7
1.6%
670
Dec-16F
262,055
204,265
15.9
4.1%
750
Dec-17F
270,055
208,399
16.1
2.0%
800
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (Rp)
BVPS (Rp)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
159
Company Note
Singapore
Keppel Corporation
Current price:
Target price:
Previous target:
Up/downside:
S$6.42
S$7.12
S$7.12
10.9%
Reuters:
Bloomberg:
Market cap:
KPLM.SI
KEP SP
US$8,230m
S$11,627m
US$22.11m
S$31.14m
1,798m
60.0%
Deceleration of order book may be prolonged if cycle does not turn around in 2018.
Earnings downside remains if Brazilian woes worsen.
We maintain our Hold call, as we believe there could be value proposition from
divestment of non-core assets that would lead to dividend upside.
10.10
114.0
9.10
107.8
8.10
101.5
7.10
95.3
6.10
30
89.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.8
-5.3
3M
-5.9
-5.6
12M
-21.7
-8.9
Its net gearing rose from 0.11x at end-2014 to 0.52x at end-Sep 15, mainly to fund
O&Ms working capital and this trend is likely to be worsened by the drag from Sete
Brasil. We believe KEP is likely to unlock non-core assets in the near term to ease any
balance sheet stress.
Asset recycling
In the long term, KEP is considering partnering with private funds to grow its
infrastructure assets to achieve better returns. In addition, there will continue to be
periodic monetisation of assets across segments by injection into a REIT or trust
structure to attract higher valuations. We believe that he property assets in Alpha
Investments could be the candidates that have been earmarked.
Maintain Hold
Our RNAV-based target price is intact. KEP's share price is likely to be capped by
uncertainty from Sete Brasil contracts and the ongoing corruption probe by Petrobras.
However, upside surprise could come from major divestment of non-core assets. Its
valuation is not expensive at c.9x CY17 P/E, 1 s.d. below its 10-year trading band. We
would re-evaluate our recommendation if it can clinch higher order wins and the
settlement of Brazilian contracts.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
12,380
2,377
1,790
1.00
(20.8%)
6.53
0.50
7.71%
7.18
5.63
11.2%
1.22
18.9%
Dec-14A
13,283
2,639
1,885
1.05
5.3%
6.24
0.48
7.54%
6.65
10.49
11.2%
1.12
18.8%
Dec-15F
10,452
1,444
1,473
0.68
(35.2%)
9.45
0.37
5.69%
13.78
NA
52.1%
1.04
11.5%
0%
1.02
Dec-16F
10,851
1,669
1,420
0.78
15.0%
8.22
0.35
5.48%
11.74
10.03
46.6%
0.97
12.3%
0%
1.01
Dec-17F
10,183
1,625
1,385
0.76
(2.5%)
8.43
0.34
5.35%
11.09
4.45
32.9%
0.92
11.2%
0%
0.99
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-5.3
-5.6
-8.9
Absolute
-9.8
-5.9
Major shareholders
Temasek Holdings
P/BV vs ROE
3.50
30.0%
3.00
25.7%
-21.7
2.50
21.4%
% held
2.00
17.1%
21.3
1.50
12.9%
1.00
8.6%
0.50
4.3%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
ROE (rhs)
Dec-13A
12,380
2,109
2,377
(242)
2,134
19
626
14
2,794
0
2,794
(462)
Dec-14A
13,283
2,305
2,639
(265)
2,373
(1)
504
12
2,889
0
2,889
(462)
Dec-15F
10,452
1,249
1,444
(284)
1,160
27
334
8
1,529
287
1,816
(310)
Dec-16F
10,851
1,297
1,669
(303)
1,366
26
363
8
1,763
0
1,763
(313)
Dec-17F
10,183
1,217
1,625
(323)
1,302
21
386
7
1,717
0
1,717
(302)
2,331
(541)
0
2,426
(541)
0
1,506
(33)
1,450
(30)
1,414
(29)
1,790
1,790
1,790
1,885
1,885
1,885
1,473
1,235
1,235
1,420
1,420
1,420
1,385
1,385
1,385
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
2,377
(308)
(734)
(46)
(105)
0
25
(585)
625
(936)
534
(576)
300
(678)
2,130
40
0
(843)
201
1,528
1,475
2,077
67
Dec-14A
2,639
(194)
(1,762)
0
(332)
(49)
(0)
(328)
(27)
(595)
125
(667)
2,014
877
272
34
0
(1,029)
3
(720)
129
1,121
980
Dec-15F
1,444
Dec-16F
1,669
Dec-17F
1,625
(3,150)
224
1,519
254
8
27
(310)
(1,727)
(650)
809
(2,771)
0
8
26
(313)
1,614
(650)
0
0
0
7
21
(302)
2,871
(650)
0
0
(2,612)
300
0
(650)
200
0
(650)
400
0
(663)
(639)
(623)
(363)
(4,702)
(4,039)
(4,100)
(439)
525
1,164
1,203
(223)
1,997
2,621
2,456
161
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
5,565
1,916
8,995
1,482
17,957
3,798
0
86
8,214
12,098
517
Dec-14A
5,736
2,510
10,681
2,261
21,188
2,673
0
102
7,593
10,367
1,796
Dec-15F
1,034
5,749
9,930
1,002
17,715
3,039
0
102
7,927
11,068
1,796
Dec-16F
1,559
5,425
10,308
1,002
18,295
3,386
0
102
8,290
11,778
1,796
Dec-17F
3,556
4,073
9,674
1,002
18,305
3,713
0
102
8,675
12,490
1,796
5,409
3,416
9,342
6,583
5,581
3,597
10,974
5,587
4,703
3,363
9,862
5,887
4,883
3,463
10,141
6,087
4,582
3,296
9,674
6,487
442
7,025
0
16,367
9,701
3,988
13,689
266
5,853
0
16,828
10,381
4,347
14,728
266
6,153
0
16,015
11,191
1,576
12,767
266
6,353
0
16,494
11,972
1,606
13,578
266
6,753
0
16,427
12,734
1,635
14,369
Dec-13A
(11.3%)
(16.1%)
19.2%
(0.83)
5.26
17.11
16.5%
48.6%
55.4
295.9
193.2
12.5%
11.0%
7.80%
Dec-14A
7.3%
11.0%
19.9%
(0.91)
5.71
17.71
16.0%
46.2%
60.8
327.1
182.7
15.2%
11.7%
7.88%
Dec-15F
(21.3%)
(45.3%)
13.8%
(3.66)
6.16
4.86
17.1%
55.9%
144.2
408.7
204.0
7.0%
6.7%
3.95%
Dec-16F
3.8%
15.6%
15.4%
(3.48)
6.59
5.72
17.8%
45.0%
188.5
387.7
183.6
6.9%
7.8%
4.84%
Dec-17F
(6.2%)
(2.6%)
16.0%
(2.60)
7.01
5.52
17.6%
45.0%
170.2
406.7
192.7
6.5%
7.1%
4.58%
Dec-13A
-11.3%
-16.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
7.3%
11.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
-21.3%
-45.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
3.8%
15.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
-6.2%
-2.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
162
Company Note
Singapore
Keppel REIT
Current price:
Target price:
Previous target:
Up/downside:
S$0.96
S$1.15
S$1.15
20.4%
Reuters:
Bloomberg:
Market cap:
KASA.SI
KREIT SP
US$2,174m
S$3,071m
US$2.16m
S$3.04m
3,170m
55.1%
Focus on tenant retention, with portfolio occupancy fairly stable at 98.5% and 16%
positive rental reversion in 9M15.
Almost all FY15 renewals have been completed. Only 36% of leases are due to be
re-contracted/reviewed over the next two years.
1.200
100.4
1.100
96.8
1.000
93.2
0.900
89.6
0.800
20
15
10
5
86.0
Vol m
1.300
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.6
2.9
3M
0.5
0.8
12M
-21.1
-8.3
The trust leased 470,000 sq ft of space in 3Q15, keeping portfolio occupancy fairly
stable at 98.5% (vs. 99.3% in 2Q) and achieving 16% positive rental reversion. Of the
new leases secured, around 1/3 were new tenants for KREIT, 1/3 were expansion
leases and the remaining 1/3 were tenants setting up presence in Singapore. These are
largely Asia-based companies in the financial services, commodities and real estate
sectors.
Maintain Add
We believe that much of the dampened office market sentiment is already reflected in
the share price. We maintain Add, with an unchanged DDM-based target price. The
stock offers FY15/FY16 DPU yields of 7.3%
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
174.0
138.3
534.9
214.0
0.058
25.5%
16.42
0.079
8.25%
39.6%
1.40
0.68
4.28%
Dec-14A
184.1
151.4
371.9
206.1
0.053
(9.4%)
18.91
0.072
7.57%
36.4%
1.41
0.68
3.60%
Dec-15F
179.1
143.0
201.6
218.2
0.057
8.5%
16.73
0.069
7.18%
34.6%
1.39
0.69
4.08%
0.98
Dec-16F
197.1
157.4
200.8
220.8
0.063
9.5%
15.27
0.069
7.20%
34.5%
1.38
0.69
4.51%
1.03
Dec-17F
213.1
170.1
219.1
236.8
0.068
8.2%
14.12
0.073
7.66%
34.5%
1.37
0.70
4.92%
1.11
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
2.9
0.8
Absolute
-1.6
0.5
Major shareholders
Keppel Land
12M
-8.3
-21.1
% held
44.9
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Dec-13A
174.0
0.0
174.0
(35.7)
138.3
0.0
(42.9)
(6.8)
0.0
88.5
(44.9)
43.7
(18.2)
64.2
72.9
389.1
551.7
(16.8)
0.0
0.0
534.9
214.0
Dec-14A
184.1
0.0
184.1
(32.7)
151.4
0.0
(45.5)
(7.5)
0.0
98.5
(37.4)
61.1
(26.6)
70.6
50.0
228.4
383.5
(11.6)
0.0
0.0
371.9
206.1
Dec-15F
179.1
0.0
179.1
(36.1)
143.0
0.0
(47.0)
(5.7)
0.0
90.3
(30.4)
59.9
(2.2)
103.2
30.4
20.9
212.2
(10.5)
0.0
0.0
201.6
218.2
Dec-16F
197.1
0.0
197.1
(39.7)
157.4
0.0
(47.2)
(5.7)
0.0
104.5
(12.8)
91.7
(4.9)
109.4
12.8
0.0
208.9
(8.1)
0.0
0.0
200.8
220.8
Dec-17F
213.1
0.0
213.1
(42.9)
170.1
0.0
(47.6)
(5.7)
0.0
116.8
(10.3)
106.5
(4.1)
114.6
10.3
0.0
227.4
(8.3)
0.0
0.0
219.1
236.8
Dec-13A
551.7
(1.2)
(50.5)
(16.8)
(355.4)
127.9
0.0
(380.5)
174.4
(206.1)
260.2
170.6
(214.0)
(55.2)
161.5
83.3
(78.3)
126.7
Dec-14A
383.5
(6.7)
(0.9)
(11.6)
(181.2)
183.1
0.0
(850.9)
83.6
(767.3)
(17.5)
413.2
(206.1)
(160.0)
29.5
(554.7)
(584.3)
(661.9)
Dec-15F
212.2
(70.6)
18.6
(10.5)
38.7
188.4
0.0
(21.1)
158.2
137.0
(178.9)
0.0
(218.2)
(79.3)
(476.4)
(151.0)
325.4
91.8
Dec-16F
208.9
(91.7)
10.4
(8.1)
60.4
179.9
0.0
0.0
143.5
143.5
0.0
0.0
(220.8)
(79.5)
(300.3)
23.2
323.4
268.7
Dec-17F
227.4
(100.2)
9.2
(8.3)
61.3
189.4
0.0
0.0
146.4
146.4
0.0
0.0
(236.8)
(76.4)
(313.2)
22.6
335.8
281.1
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
164
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
6,600
47
3
6,650
91
0
34
1
126
94
282
23
399
2,401
76
2,477
3,897
2
Dec-15F
7,087
26
2
7,115
49
0
25
1
74
103
275
21
399
2,212
99
2,311
4,457
2
Dec-16F
7,087
13
2
7,103
72
0
25
1
98
113
275
21
409
2,212
99
2,311
4,457
2
Dec-17F
7,087
0
2
7,089
94
0
25
1
120
123
275
21
419
2,212
99
2,311
4,457
2
4,459
4,459
4,459
4,459
Dec-13A
10.9%
10.9%
79.5%
1.42%
0.79
3.04%
40%
0.32
0.32
0.23
8.28%
Dec-14A
5.8%
9.5%
82.3%
(8.25%)
1.02
3.03%
55%
0.59
0.59
0.52
5.27%
Dec-15F
(2.7%)
(5.6%)
79.9%
(5.21%)
1.10
4.97%
108%
0.19
0.19
0.12
2.78%
Dec-16F
10.0%
10.0%
79.9%
0.31%
1.68
3.87%
110%
0.24
0.24
0.18
2.79%
Dec-17F
8.1%
8.1%
79.8%
6.34%
1.95
3.65%
108%
0.29
0.29
0.23
3.04%
Dec-13A
8.1
N/A
N/A
3,268
98.3%
N/A
N/A
Dec-14A
8.7
N/A
N/A
3,276
99.1%
N/A
N/A
Dec-15F
7.8
N/A
N/A
3,276
99.4%
N/A
N/A
Dec-16F
8.5
N/A
N/A
3,276
99.4%
N/A
N/A
Dec-17F
9.0
N/A
N/A
3,276
99.4%
N/A
N/A
3,899
Dec-14A
7,045
57
2
7,104
200
0
25
1
225
84
275
21
380
2,390
99
2,490
4,457
2
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
165
Company Note
Singapore
Keppel T&T
Current price:
Target price:
Previous target:
Up/downside:
S$1.43
S$1.91
S$1.91
33.3%
Reuters:
Bloomberg:
Market cap:
KTEL.SI
KPTT SP
US$562.8m
S$795.1m
US$0.04m
S$0.05m
554.9m
19.3%
KPTT is on track to divest T27 to Keppel DC REIT in early 2016, which will allow it
to recycle capital and speed up its investments in DC assets.
It has ambitious plans to double its data centre AUM in 4-5 years on a combined
platform with the REIT.
Ramp-up in occupancy and opening of new logistics facilities will relieve pressure
from startup costs and drive better earnings growth in 2016.
1.90
111.1
1.70
103.3
1.50
95.6
1.30
87.8
1.10
80.0
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
10.0
10.3
12M
-16.1
-3.3
Data centre contributed 42% of net profit in 9M15, and we expect this figure to rise with:
1) the opening of Almere 2 in 4Q15, 2) phase 1 completion of Keppel Datahub 3 in end2016, 3) growth in management fees from Keppel DC REIT, and 4) higher associates
contributions from the REIT as its portfolio grows. KPTT has an ambitious target of
doubling its data centre AUM in 4-5 years on a combined platform with the REIT.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
161.7
52.61
63.2
0.11
13.8%
12.53
0.04
2.4%
15.64
33.87
77.0%
1.68
14.1%
Dec-14A
224.6
66.97
310.5
0.13
13.8%
11.01
0.15
10.5%
7.98
59.05
25.0%
1.12
12.2%
Dec-15F
201.3
41.37
63.2
0.11
(12.3%)
12.55
0.04
2.4%
17.16
NA
51.7%
1.29
9.6%
0%
1.04
Dec-16F
233.0
58.09
74.7
0.13
18.1%
10.63
0.04
2.4%
13.96
NA
65.8%
1.33
12.3%
0%
1.04
Dec-17F
271.2
74.61
84.0
0.15
12.4%
9.45
0.04
2.4%
12.09
NA
77.5%
1.36
14.2%
0%
1.01
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
2.8
10.3
-3.3
Absolute
Major shareholders
Keppel Corp
-1.7
10.0
P/BV vs ROE
2.50
20.0%
2.00
16.0%
% held
1.50
12.0%
-16.1
79.8
1.00
8.0%
5.3
0.50
4.0%
Anwar Agus
0.8
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
20.0%
16.1%
12.2%
8.3%
4.4%
0.6%
-3.3%
-7.2%
-11.1%
-15.0%
ROE (rhs)
Dec-13A
168.9
168.9
52.6
(19.3)
33.3
(6.9)
56.7
0.0
83.0
0.0
83.0
(13.4)
Dec-14A
231.6
231.6
67.0
(26.5)
40.4
(11.4)
61.1
0.0
90.1
238.5
328.6
(20.4)
Dec-15F
210.0
210.0
41.4
(15.4)
26.0
(10.2)
72.0
0.0
87.8
0.0
87.8
(17.6)
Dec-16F
241.8
241.8
58.1
(18.4)
39.7
(10.8)
74.8
0.0
103.7
0.0
103.7
(20.7)
Dec-17F
280.3
280.3
74.6
(21.3)
53.3
(10.9)
74.4
0.0
116.9
0.0
116.9
(23.4)
69.7
(6.5)
308.2
(61.6)
70.2
(7.0)
83.0
(8.3)
93.5
(9.5)
63.2
63.2
63.2
63.9
310.5
72.0
72.0
0.0
63.2
63.2
63.2
0.0
74.7
74.7
74.7
0.0
84.0
84.0
84.0
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
52.6
(6.3)
Dec-14A
67.0
14.2
Dec-15F
41.4
Dec-16F
58.1
Dec-17F
74.6
2.6
(6.2)
(7.5)
(3.0)
4.0
(6.8)
(2.4)
38.2
(130.4)
0.0
(13.2)
(17.7)
(161.2)
146.4
0.1
(234.0)
0.9
(12.0)
(2.5)
(166.5)
(229.7)
0.0
(17.0)
449.8
203.0
(23.1)
0.3
0.0
0.0
(10.2)
(17.6)
16.3
(100.7)
0.0
0.0
0.0
(100.7)
50.0
0.0
0.0
0.0
(10.8)
(20.7)
20.3
(93.2)
0.0
0.0
0.0
(93.2)
50.0
0.0
0.0
0.0
(10.9)
(23.4)
32.9
(94.9)
0.0
0.0
0.0
(94.9)
50.0
0.0
(20.8)
(80.2)
(83.2)
(19.4)
(19.4)
12.4
138.1
15.1
23.4
(115.5)
26.5
(76.5)
(40.0)
13.4
48.4
0.0
(33.2)
(117.6)
(34.4)
(72.7)
0.0
30.6
(42.3)
(22.9)
(60.4)
0.0
30.6
(31.5)
(12.1)
(49.4)
167
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
80
97
1
0
178
507
463
0
0
970
38
Dec-14A
281
129
1
0
410
432
543
18
0
993
53
Dec-15F
163
116
2
0
281
517
543
18
0
1,078
53
Dec-16F
121
134
3
0
257
592
543
18
0
1,153
53
Dec-17F
89
155
3
0
247
666
543
18
0
1,226
53
86
1
126
461
106
25
184
426
97
25
175
476
109
25
187
526
123
25
201
576
0
461
16
604
470
74
545
0
426
1
610
707
86
793
0
476
1
652
615
93
708
0
526
1
714
595
101
696
0
576
1
778
585
111
696
Dec-13A
17.6%
28.9%
32.5%
(0.76)
0.85
4.44
16.1%
31%
152.0
N/A
N/A
9.67%
3.62%
7.6%
Dec-14A
38.9%
27.3%
29.8%
(0.36)
1.27
3.41
6.2%
27%
170.8
N/A
N/A
7.81%
3.50%
11.4%
Dec-15F
(10.4%)
(38.2%)
20.6%
(0.66)
1.11
2.22
20.0%
132%
214.8
N/A
N/A
5.78%
2.19%
5.8%
Dec-16F
15.7%
40.4%
24.9%
(0.83)
1.07
3.17
20.0%
26%
189.8
N/A
N/A
7.47%
3.30%
6.8%
Dec-17F
16.4%
28.4%
27.5%
(0.97)
1.05
4.21
20.0%
23%
188.7
N/A
N/A
8.70%
4.24%
7.2%
Dec-13A
20.1%
-9.9%
N/A
Dec-14A
5.5%
25.5%
N/A
Dec-15F
10.6%
-7.0%
N/A
Dec-16F
17.0%
-2.0%
N/A
Dec-17F
5.4%
-2.0%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
(S$)
Volumes Moved (% Change)
Rates Charged (% Change)
Acquisitions (m)
168
Company Note
Singapore
S$0.31
S$0.40
S$0.40
29.5%
Reuters:
Bloomberg:
Market cap:
LMRT.SI
LMRT SP
US$613.9m
S$867.3m
US$0.48m
S$0.68m
2,702m
76.0%
0.350
107.0
0.330
103.0
0.310
99.0
0.290
40
30
20
10
95.0
Vol m
0.370
Dec-14
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-6.1
-1.6
Sep-15
Source: Bloomberg
Price performance
LMRT enjoyed a 22.9% positive rental reversion for the 36,026sm renewed in 3Q15,
while portfolio occupancy remained high at 93.9%. With a remaining 4% and 8% of
leases to be renewed in FY15 and FY16, respectively, we anticipate the trust to continue
to enjoy positive rental uplift when re-contracting these leases.
3M
0.0
0.3
12M
-15.1
-2.3
Maintain Add
At 10.1% FY15 DPU yield and at 0.84x P/BV, we see LMRT as inexpensive vs other
overseas-centric S-REITs. LMRT offers investors a pure-play exposure to the long-term
rising Indonesian consumer story that is underpinned by the rapidly expanding
consumer class and increasing disposable income. We retain our Add call with an
unchanged DDM-based target price of S$0.40.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
152.6
143.4
70.44
73.02
0.030
(55.4%)
10.22
0.030
9.6%
34.0%
0.41
0.75
6.29%
Dec-14A
137.0
126.0
59.47
68.01
0.023
(23.9%)
13.44
0.025
8.1%
30.9%
0.42
0.73
5.52%
Dec-15F
171.8
161.7
79.09
86.74
0.029
25.2%
10.73
0.031
10.1%
34.0%
0.42
0.74
6.83%
1.04
Dec-16F
177.5
165.2
81.87
90.08
0.029
2.0%
10.52
0.032
10.4%
33.5%
0.42
0.74
7.01%
1.08
Dec-17F
176.0
165.7
82.24
90.89
0.030
0.3%
10.49
0.033
10.5%
33.5%
0.42
0.74
7.06%
1.09
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-1.6
0.3
-2.3
Absolute
-6.1
0.0
-15.1
Major shareholders
Lippo Karawaci Tbk PT
% held
24.0
JinQuan Tong
8.1
6.0
1.200
40.0%
0.0350
12.0%
1.000
33.3%
0.0300
10.3%
0.800
26.7%
0.0250
8.6%
0.0200
6.9%
0.0150
5.1%
0.0100
3.4%
0.600
20.0%
0.400
13.3%
0.200
6.7%
0.0050
1.7%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
DPS (lhs)
Dec-13A
152.6
0.0
152.6
(9.2)
143.4
4.4
(10.3)
(0.3)
(1.2)
135.9
0.0
135.9
(30.0)
0.0
(24.9)
0.0
81.1
(10.7)
0.0
0.0
70.4
73.0
Dec-14A
137.0
0.0
137.0
(11.0)
126.0
0.0
(9.4)
(0.3)
(1.2)
115.1
0.0
115.1
(32.6)
0.0
1.2
0.0
83.7
(24.3)
0.0
0.0
59.5
68.0
Dec-15F
171.8
0.0
171.8
(10.2)
161.7
0.0
(10.7)
(0.5)
(1.7)
148.7
0.0
148.7
(36.9)
0.0
(13.0)
0.0
98.9
(19.8)
0.0
0.0
79.1
86.7
Dec-16F
177.5
0.0
177.5
(12.3)
165.2
0.0
(10.8)
(0.5)
(1.7)
152.1
0.0
152.1
(36.8)
0.0
(13.0)
0.0
102.3
(20.5)
0.0
0.0
81.9
90.1
Dec-17F
176.0
0.0
176.0
(10.3)
165.7
0.0
(10.8)
(0.5)
(1.7)
152.6
0.0
152.6
(36.8)
0.0
(13.0)
0.0
102.8
(20.6)
0.0
0.0
82.2
90.9
Dec-13A
81.1
54.0
8.6
(27.9)
(4.3)
111.4
(3.7)
0.0
(0.9)
(4.6)
150.0
97.7
(75.4)
(47.9)
124.5
231.3
106.8
232.0
Dec-14A
83.7
32.6
10.0
(26.7)
6.9
106.5
(9.9)
(362.0)
(0.4)
(372.2)
7.5
83.1
(64.2)
(29.1)
(2.6)
(268.4)
(265.8)
(288.0)
Dec-15F
98.9
36.9
(43.0)
(19.1)
242.5
316.2
0.0
(106.8)
(4.1)
(110.9)
81.8
25.0
(86.7)
(37.5)
(17.4)
187.9
205.3
254.6
Dec-16F
102.3
36.8
32.0
(19.7)
21.0
172.4
0.0
0.0
(3.9)
(3.9)
0.0
0.0
(90.1)
(33.2)
(123.3)
45.1
168.4
135.9
Dec-17F
102.8
36.8
(0.1)
(19.8)
3.8
123.4
0.0
0.0
(4.0)
(4.0)
0.0
0.0
(90.9)
(33.2)
(124.1)
(4.6)
119.5
87.0
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
170
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,412
0
3
1,416
371
0
15
12
398
24
147
34
205
470
130
600
1,010
1,010
Dec-14A
1,836
0
5
1,841
104
0
68
0
172
71
199
35
305
424
138
562
1,146
1,146
Dec-15F
1,707
0
8
1,714
292
0
68
0
360
28
200
35
263
505
138
642
1,169
Dec-16F
1,689
0
10
1,699
337
0
68
0
405
60
200
35
295
505
138
642
1,167
Dec-17F
1,689
0
11
1,700
332
0
68
0
400
60
200
35
295
505
138
642
1,164
1,169
1,167
1,164
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Dec-13A
1.5%
14.5%
93.9%
1.7%
4.44
13.1%
104%
1.95
1.95
1.81
3.76%
Dec-14A
(10.2%)
(12.1%)
92.0%
(15.4%)
3.34
29.0%
114%
0.56
0.56
0.34
3.11%
Dec-15F
25.4%
28.3%
94.1%
24.2%
3.98
20.0%
110%
1.36
1.36
1.11
3.87%
Dec-16F
3.3%
2.2%
93.1%
3.6%
4.07
20.0%
110%
1.37
1.37
1.14
3.92%
Dec-17F
(0.8%)
0.3%
94.1%
0.7%
4.09
20.0%
111%
1.35
1.35
1.13
3.91%
Dec-13A
1.5
N/A
N/A
N/A
95.1%
N/A
N/A
Dec-14A
1.3
N/A
N/A
N/A
96.6%
N/A
N/A
Dec-15F
1.3
N/A
N/A
N/A
98.3%
N/A
N/A
Dec-16F
1.3
N/A
N/A
N/A
98.8%
N/A
N/A
Dec-17F
1.3
N/A
N/A
N/A
99.1%
N/A
N/A
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
171
Company Note
Singapore
M1 Limited
Current price:
Target price:
Previous target:
Up/downside:
S$2.79
S$3.10
S$3.10
11.1%
Reuters:
Bloomberg:
Market cap:
MONE.SI
M1 SP
US$1,850m
S$2,614m
US$1.83m
S$2.58m
1,003m
39.2%
M1 has the most to lose from a new competitor given its largely Singapore mobile
focus and weaker position to defend its market share from sans quad-play offerings.
FY15-17 dividend yields of 7.1-7.5% should help support current valuations. Special
dividends are unlikely, in our view.
3.60
102.8
3.10
93.4
2.60
8
6
4
2
84.0
Vol m
4.10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.7
3.8
3M
-3.1
-2.8
12M
-21.6
-8.8
We have factored in a negative 15% impact to M1s mobile ARPU between mid-2017 to
2020. The impact could be worse if the new entrant employs more aggressive pricing
strategies, or more limited if the new entrants execution is poor (network, branding). Our
sensitivity analysis suggests that our target price would fall to S$2.30 if its mobile ARPU
is negatively impacted by 30% (bear-case) by FY20. If the negative impact on its mobile
ARPU is only 5% (bull-case), our target price would be S$3.70.
Financial Summary
Analyst
FOONG Choong Chen, CFA
T (60) 3 2261 9081
E choongchen.foong@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Operating EBITDA Margin
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
1,008
310.6
30.8%
160.2
0.17
8.32%
15.99
0.21
7.53%
8.88
16.24
49.5%
43.1%
Dec-14A
1,076
333.9
31.0%
176.1
0.19
8.85%
14.69
0.19
6.77%
8.58
17.63
70.8%
44.6%
Dec-15F
1,044
347.3
33.3%
185.1
0.20
4.67%
14.03
0.20
7.13%
8.21
16.51
61.9%
46.0%
(0.000%)
1.02
Dec-16F
1,110
364.9
32.9%
195.6
0.21
5.77%
13.27
0.21
7.53%
7.85
15.38
62.5%
46.9%
(0.001%)
1.05
Dec-17F
1,056
362.2
34.3%
192.2
0.21
(1.76%)
13.50
0.21
7.40%
7.79
12.92
51.3%
44.5%
(0.000%)
1.03
Powered by
EFA
BY THE NUMBERS
1M
3.8
-0.7
3M
-2.8
-3.1
Major shareholders
12M
-8.8
-21.6
% held
Sunshare (Axiata)
29.7
Keppel T&T
19.0
13.9
P/BV vs ROE
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
60.0%
54.0%
48.0%
42.0%
36.0%
30.0%
24.0%
18.0%
12.0%
6.0%
0.0%
25.0
10.0%
20.0
5.0%
15.0
0.0%
10.0
-5.0%
5.0
-10.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-15.0%
ROE (rhs)
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-13A
1,008
1,008
311
(115)
196
(3)
0
0
193
0
193
(33)
Dec-14A
1,076
1,076
334
(114)
220
(2)
0
0
217
0
217
(41)
Dec-15F
1,044
1,044
347
(120)
227
(4)
0
0
223
0
223
(38)
Dec-16F
1,110
1,110
365
(125)
240
(4)
0
0
236
0
236
(40)
Dec-17F
1,056
1,056
362
(127)
235
(3)
0
0
232
0
232
(39)
160
0
176
0
185
0
196
0
192
0
160
160
160
176
176
176
185
185
185
196
196
196
192
192
192
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
310.6
Dec-14A
333.9
Dec-15F
347.3
Dec-16F
364.9
Dec-17F
362.2
23.5
(30.8)
0.0
0.0
0.0
2.1
(4.5)
(29.7)
302.1
(125.3)
3.6
0.0
(0.7)
(122.4)
(22.0)
21.5
3.0
(4.0)
(29.0)
273.1
(139.6)
1.3
0.0
(40.1)
(178.4)
52.0
18.8
3.0
(4.9)
(37.9)
307.4
(120.0)
0.0
0.0
(0.1)
(120.1)
(30.0)
15.0
3.0
(4.8)
(40.1)
323.0
(100.0)
0.0
0.0
(64.1)
(164.1)
10.0
15.0
3.0
(4.7)
(39.4)
321.2
(100.0)
0.0
0.0
(0.1)
(100.1)
(20.0)
15.0
(136.3)
(196.9)
(177.8)
(187.0)
(197.5)
0.0
(136.8)
42.9
157.7
184.2
0.0
(126.1)
(31.4)
146.7
98.7
0.0
(192.8)
(5.5)
157.3
192.3
0.0
(162.0)
(3.0)
168.9
163.7
0.0
(202.5)
18.6
201.1
225.8
173
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
54.5
165.3
29.1
0.2
249.1
649.4
0.0
13.9
74.0
737.3
0.0
Dec-14A
22.8
172.3
30.3
0.5
225.9
685.9
0.0
13.9
102.2
802.0
52.0
Dec-15F
18.5
158.3
25.4
0.5
202.7
698.6
0.0
13.9
102.2
814.7
52.0
Dec-16F
16.4
190.3
34.2
0.5
241.5
687.7
0.0
13.9
166.2
867.8
52.0
Dec-17F
36.5
143.7
21.3
0.5
202.0
678.4
0.0
13.9
166.2
858.5
52.0
181.0
53.8
234.8
250.0
157.3
65.2
274.5
250.0
159.9
65.2
277.1
220.0
179.3
65.2
296.5
230.0
136.8
65.2
254.0
210.0
106.6
356.6
0.0
591.4
395.0
0.0
395.0
108.7
358.7
0.0
633.2
394.6
0.0
394.6
110.7
330.7
0.0
607.8
409.6
0.0
409.6
158.1
388.1
0.0
684.6
424.6
0.0
424.6
156.9
366.9
0.0
620.9
439.6
0.0
439.6
Dec-13A
(6.38%)
4.76%
30.8%
(0.21)
0.43
43.44
16.9%
121%
58.79
N/A
N/A
22.5%
31.2%
16.6%
Dec-14A
6.80%
7.50%
31.0%
(0.30)
0.42
54.88
19.0%
100%
49.91
N/A
N/A
25.8%
33.0%
17.7%
Dec-15F
(3.05%)
4.01%
33.3%
(0.27)
0.44
45.84
17.0%
100%
49.91
N/A
N/A
23.8%
33.1%
18.4%
Dec-16F
6.32%
5.07%
32.9%
(0.29)
0.46
50.15
17.0%
100%
50.05
N/A
N/A
25.4%
34.6%
18.7%
Dec-17F
(4.81%)
(0.73%)
34.3%
(0.24)
0.47
50.06
17.0%
100%
49.91
N/A
N/A
22.7%
33.5%
18.0%
Dec-13A
2.11
N/A
0.09
N/A
55.6
N/A
46
N/A
Dec-14A
1.85
N/A
0.10
N/A
56.0
N/A
44
N/A
Dec-15F
1.90
N/A
0.12
N/A
56.4
N/A
45
N/A
Dec-16F
1.95
N/A
0.13
N/A
55.3
N/A
45
N/A
Dec-17F
1.98
N/A
0.15
N/A
52.7
N/A
45
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
We expect mobile ARPU to be
adversely affected by 15% between
mid-2017 to 2020.
174
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.32
S$1.44
S$1.44
9.7%
Reuters:
Bloomberg:
Market cap:
MACT.SI
MCT SP
US$1,974m
S$2,789m
US$2.27m
S$3.19m
2,112m
62.8%
1HFY03/16 earnings performance lifted by Vivocity and higher rents from MLHF.
Price Close
1.600
109.4
1.500
105.8
1.400
102.2
1.300
98.6
1.200
10
95.0
Vol m
1.700
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.6
1.9
3M
3.1
3.4
12M
-8.7
4.1
Portfolio occupancy inched up to 96.6% in Sep, with greater occupancy at Vivocity and
Mapletree Anson. We expect occupancy to improve moving forward, with higher
committed occupancy at the properties. Retail rental reversion was healthy at +13.2%
over preceding levels in 1HFY16, while office renewals were 10.6% higher than previous
rates.
Hold maintained
Although MCTs earnings outlook remains stable, we keep our Hold recommendation
due to the moderation in rental reversions (Vivocitys passing rents track closer to
market levels) and office headwinds. Our DDM-based target price of S$1.44 is
unchanged.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
267.2
195.3
343.3
153.0
0.068
17.5%
19.32
0.074
5.61%
38.6%
1.16
1.13
6.11%
Mar-15A
282.5
211.7
312.1
168.3
0.074
9.2%
17.70
0.080
6.08%
36.3%
1.24
1.06
6.18%
Mar-16F
289.9
219.9
161.0
170.7
0.076
2.4%
17.28
0.080
6.12%
36.3%
1.23
1.07
6.15%
0.99
Mar-17F
295.2
223.9
164.1
173.8
0.077
1.5%
17.03
0.082
6.21%
36.2%
1.23
1.07
6.27%
0.98
Mar-18F
300.2
227.7
167.0
176.8
0.078
1.3%
16.80
0.083
6.29%
36.2%
1.22
1.07
6.38%
0.97
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
1.9
3.4
Absolute
-2.6
3.1
Major shareholders
Temasek Holdings
12M
4.1
-8.7
% held
37.2
AIG
6.0
Schroders
6.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
42.00%
40.88%
39.75%
38.63%
37.50%
36.38%
35.25%
34.13%
33.00%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
7.00%
6.22%
5.44%
4.67%
3.89%
3.11%
2.33%
1.56%
0.78%
0.00%
Mar-14A
267.2
0.0
267.2
(71.9)
195.3
0.0
(17.6)
(0.5)
(1.2)
175.9
0.0
175.9
(34.7)
0.0
0.0
202.1
343.3
0.0
0.0
0.0
343.3
153.0
Mar-15A
282.5
0.0
282.5
(70.8)
211.7
0.0
(18.7)
(0.6)
(0.8)
191.6
0.0
191.6
(35.8)
0.0
0.0
156.3
312.1
0.0
0.0
0.0
312.1
168.3
Mar-16F
289.9
0.0
289.9
(70.0)
219.9
0.0
(19.3)
(0.6)
(1.3)
198.8
0.0
198.8
(37.8)
0.0
0.0
0.0
161.0
0.0
0.0
0.0
161.0
170.7
Mar-17F
295.2
0.0
295.2
(71.3)
223.9
0.0
(19.5)
(0.6)
(1.3)
202.6
0.0
202.6
(38.5)
0.0
0.0
0.0
164.1
0.0
0.0
0.0
164.1
173.8
Mar-18F
300.2
0.0
300.2
(72.5)
227.7
0.0
(19.6)
(0.6)
(1.3)
206.3
0.0
206.3
(39.3)
0.0
0.0
0.0
167.0
0.0
0.0
0.0
167.0
176.8
Mar-14A
343.3
34.7
3.4
0.7
(193.2)
188.8
(3.9)
0.0
0.2
(3.7)
0.0
(3.5)
(126.4)
(32.0)
(161.8)
23.3
185.3
153.3
Mar-15A
312.1
35.8
3.1
0.0
(147.4)
203.5
(7.8)
0.0
0.0
(7.8)
(40.0)
(2.0)
(136.4)
(32.9)
(211.2)
(15.6)
195.8
122.9
Mar-16F
161.0
37.8
2.5
0.0
9.6
211.0
0.0
0.0
0.1
0.1
0.0
0.0
(170.7)
(37.9)
(208.6)
2.5
211.2
173.3
Mar-17F
164.1
38.5
1.7
0.0
9.7
214.1
0.0
0.0
0.1
0.1
0.0
0.0
(173.8)
(38.7)
(212.5)
1.7
214.3
175.7
Mar-18F
167.0
39.3
1.6
0.0
9.8
217.7
0.0
0.0
0.1
0.1
0.0
0.0
(176.8)
(39.4)
(216.2)
1.6
218.0
178.5
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
176
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
4,034
0
1
4,035
70
0
4
1
75
54
339
8
400
1,249
35
1,284
2,426
0
Mar-16F
4,199
0
5
4,204
57
0
3
1
61
58
0
5
63
1,547
39
1,585
2,617
0
Mar-17F
4,199
0
5
4,204
59
0
3
1
63
59
0
5
64
1,547
39
1,586
2,617
0
Mar-18F
4,199
0
5
4,204
61
0
3
1
65
60
0
5
65
1,547
40
1,586
2,617
0
2,617
2,617
2,617
2,617
Mar-14A
21.7%
25.2%
73.1%
13.6%
5.04
0%
45%
0.19
0.19
0.18
8.59%
Mar-15A
5.7%
8.4%
74.9%
8.5%
5.33
0%
54%
0.23
0.23
0.21
7.45%
Mar-16F
2.6%
3.9%
75.9%
0.6%
5.25
0%
106%
0.97
0.97
0.91
3.78%
Mar-17F
1.8%
1.8%
75.9%
1.4%
5.24
0%
106%
0.98
0.98
0.92
3.85%
Mar-18F
1.7%
1.7%
75.8%
1.3%
5.23
0%
106%
0.99
0.99
0.93
3.91%
Mar-14A
7.3
N/A
N/A
2,106
99.0%
N/A
N/A
Mar-15A
7.6
N/A
N/A
2,106
98.1%
N/A
N/A
Mar-16F
7.7
N/A
N/A
2,106
98.3%
N/A
N/A
Mar-17F
7.8
N/A
N/A
2,106
98.3%
N/A
N/A
Mar-18F
7.9
N/A
N/A
2,106
98.3%
N/A
N/A
2,426
Mar-15A
4,199
0
5
4,204
55
0
3
1
59
62
189
5
255
1,358
32
1,390
2,617
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
177
Company Note
Singapore
S$0.93
S$1.20
S$1.20
30.1%
Reuters:
Bloomberg:
Market cap:
MAPE.SI
MAGIC SP
US$1,800m
S$2,542m
US$2.28m
S$3.21m
3,260m
28.0%
Resilient portfolio
Outlook for Festival Walk remains robust with 20% upward rental reversion; tenant
remixing to widen shopper appeal.
Steady growth from China properties with bulk of FY16 leases due re-contracted.
Positive rental reversions and potential new acquisitions to drive outlook.
Maintain Add with unchanged DDM-based target price of S$1.20.
1.100
112.1
1.000
106.4
0.900
100.7
0.800
40
30
20
10
95.0
Vol m
Dec-14
For 1HFY16, Festival Walks (FW) NPI climbed 18% yoy due to a strong 20% rental
uplift on retail lease renewals. This was despite a marginal yoy drop in tenant sales
while shopper traffic grew positively. The robust demand for space at FW bodes well for
renewal of the remaining 6.2% and 18.9% of lease income expiring in 2HFY16 and
FY17 respectively. Ongoing tenant remixing, such as introducing more family-focused
offerings to appeal to a wider shopper pool, is expected to continue to draw traffic.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.2
0.3
3M
-2.1
-1.8
12M
-2.1
10.7
In China, Gateway Plaza (GW) achieved 25% upside on re-leasing activities in 2Q while
occupancy remained at 96.3%. While the spread between passing and market rents has
narrowed, we expect this property to remain stable as there is only a minimal 0.8% and
5.9% of rental income due to be re-contracted in 2HFY16 and FY17 respectively. In SP,
we expect the renewal of the 4.3% of rental income in FY17 to be positive given the 1520% gap in current and passing rents.
Maintain Add
We continue to like MAGIC for its resilient portfolio. Its earnings stream is visible, with
81% of FY16 distributable income hedged and 86% of debt cost fixed for FY16. We
reiterate our Add call, with unchanged DDM-based target price of S$1.20.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
267.6
216.2
117.3
170.3
0.044
112%
21.11
0.063
6.86%
38.0%
1.06
0.87
4.44%
Mar-15A
281.1
229.3
123.0
178.0
0.046
4%
20.32
0.065
7.07%
36.2%
1.20
0.77
4.03%
Mar-16F
325.6
259.1
171.5
203.7
0.053
17%
17.37
0.074
7.99%
38.0%
1.35
0.69
4.18%
1.03
Mar-17F
348.6
277.2
148.7
214.6
0.054
1%
17.24
0.077
8.32%
37.0%
1.40
0.66
3.90%
1.04
Mar-18F
363.6
288.9
152.4
218.5
0.054
1%
17.00
0.078
8.39%
36.0%
1.47
0.63
3.79%
1.05
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
0.3
-1.8
Absolute
-4.2
-2.1
Major shareholders
Mapletree Investments
Norges Bank
Schroders
12M
10.7
1.400
44.0%
1.200
42.3%
-2.1
1.000
40.6%
% held
0.800
38.9%
39.3
0.600
37.1%
0.400
35.4%
0.200
33.7%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
32.0%
10.4
6.0
0.090
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Mar-14A
267.6
0.0
267.6
(51.4)
216.2
(2.2)
(21.6)
(0.6)
0.0
191.8
0.0
191.8
(42.0)
0.0
(2.0)
0.0
147.8
(30.5)
117.3
170.3
Mar-15A
281.1
0.0
281.1
(51.8)
229.3
(2.5)
(22.0)
(0.5)
0.0
204.2
0.0
204.2
(40.4)
0.0
(7.0)
0.0
156.8
(33.8)
123.0
178.0
Mar-16F
325.6
0.0
325.6
(66.5)
259.1
(3.4)
(27.1)
(0.6)
0.0
228.1
0.0
228.1
(50.4)
0.0
0.0
31.2
209.0
(37.4)
171.5
203.7
Mar-17F
348.6
0.0
348.6
(71.4)
277.2
(3.6)
(26.3)
(0.6)
0.0
246.6
0.0
246.6
(57.9)
0.0
0.0
0.0
188.8
(40.0)
148.7
214.6
Mar-18F
363.6
0.0
363.6
(74.7)
288.9
(3.8)
(26.0)
(0.6)
0.0
258.5
0.0
258.5
(64.1)
0.0
0.0
0.0
194.4
(41.9)
152.4
218.5
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
Mar-14A
148
42
(59)
(30)
72
172
(2,034)
0
0
(2,034)
(297)
2,403
(85)
(33)
1,988
126
(1,862)
(2,201)
Mar-15A
157
40
19
(27)
33
222
(5)
0
(0)
(5)
(26)
0
(169)
(34)
(229)
(12)
217
150
Mar-16F
209
50
10
(37)
(50)
182
(415)
0
0
(415)
450
39
(204)
0
285
51
(233)
166
Mar-17F
189
58
5
(40)
(58)
154
0
0
0
0
20
31
(215)
0
(164)
(10)
155
116
Mar-18F
194
64
3
(42)
(64)
156
0
0
0
0
20
31
(219)
0
(167)
(11)
157
112
179
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
4,730
0
0
4,730
133
1
8
1
143
64
0
38
102
1,853
79
1,932
2,840
0
Mar-16F
6,214
0
0
6,214
177
1
13
1
192
88
274
48
410
2,160
122
2,283
3,713
0
Mar-17F
6,446
0
0
6,446
168
1
14
1
184
95
274
50
419
2,180
122
2,303
3,908
0
Mar-18F
6,708
0
0
6,708
158
1
14
1
174
99
274
52
425
2,200
122
2,323
4,134
0
3,260
3,713
3,908
4,134
Mar-14A
137%
141%
80.8%
139%
4.52
20.6%
145%
1.41
1.40
1.31
2.51%
Mar-15A
5%
6%
81.6%
3%
5.00
21.6%
145%
0.35
0.35
0.32
2.37%
Mar-16F
16%
13%
79.6%
13%
4.49
17.9%
119%
0.47
0.47
0.43
2.88%
Mar-17F
7%
7%
79.5%
4%
4.21
21.2%
144%
0.44
0.44
0.40
2.28%
Mar-18F
4%
4%
79.5%
1%
3.99
21.6%
143%
0.41
0.41
0.37
2.26%
Mar-14A
11.5
N/A
N/A
1,939,610
98.5%
4,722.1
N/A
Mar-15A
12.1
N/A
N/A
1,939,610
98.8%
5,349.3
N/A
Mar-16F
14.0
N/A
N/A
1,939,610
98.8%
6,213.2
N/A
Mar-17F
15.0
N/A
N/A
1,939,610
98.8%
6,444.7
N/A
Mar-18F
15.6
N/A
N/A
1,939,610
98.8%
6,706.6
N/A
2,840
Mar-15A
5,350
0
0
5,350
125
1
11
1
138
76
274
45
395
1,710
122
1,833
3,260
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
180
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.52
S$1.66
S$1.66
9.2%
Reuters:
Bloomberg:
Market cap:
MAPI.SI
MINT SP
US$1,921m
S$2,713m
US$2.64m
S$3.72m
1,747m
69.7%
Gap between passing and new rent narrows, indicating limited scope for positive
rental reversions in the near term.
1.600
113.8
1.500
107.5
1.400
101.3
1.300
40
30
20
10
95.0
Vol m
1.700
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.3
4.2
3M
-1.0
-0.7
12M
2.0
14.8
Thanks to stringent cost management, the NPI margin in 2QFY16 came in at 73.7% vs.
72.1% in 2QFY15. However, going into 2HFY16, we anticipate continued cost pressure
on property expenses (i.e. maintenance), and we expect NPI margin to be dampened.
Maintain Hold
We expect cost pressures and limited rental reversion to weigh in the nearer term, and
only foresee stronger earnings growth from FY17 onwards with the completion of the
Hewlett Packard BTS project. Also, MINT is trading at a P/BV of 1.14x, on the higher
end of its peers trading range. Hence, we maintain our Hold rating, with an unchanged
DDM-based target price of S$1.66.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
299.3
214.7
314.3
166.1
0.10
10.8%
15.48
0.10
6.53%
34.4%
1.20
1.27
8.54%
Mar-15A
313.9
228.6
375.4
180.8
0.10
5.5%
14.68
0.10
6.86%
30.5%
1.32
1.15
8.20%
Mar-16F
319.4
232.7
178.4
182.8
0.10
(1.4%)
14.88
0.10
6.88%
33.3%
1.32
1.15
7.72%
0%
0.96
Mar-17F
331.9
241.7
186.5
190.1
0.11
4.5%
14.24
0.11
7.16%
33.9%
1.32
1.15
8.07%
0%
0.99
Mar-18F
397.2
287.5
230.7
234.6
0.13
23.7%
11.51
0.13
8.84%
33.9%
1.32
1.15
9.98%
0%
1.12
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
4.2
-0.7
14.8
Absolute
-0.3
-1.0
2.0
Major shareholders
Temasek Holdings
% held
30.3
Capital Research
5.8
Capital Group
5.6
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.140
9.00%
0.120
7.71%
0.100
6.43%
0.080
5.14%
0.060
3.86%
0.040
2.57%
0.020
1.29%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
DPS (lhs)
Mar-14A
299.3
0.0
299.3
(84.5)
214.7
0.0
(23.2)
(0.5)
(1.8)
189.3
0.0
189.3
(25.6)
0.0
0.0
150.7
314.3
(0.1)
0.0
0.0
314.3
166.1
Mar-15A
313.9
0.0
313.9
(85.3)
228.6
0.0
(24.8)
(0.5)
(1.8)
201.5
0.0
201.5
(23.6)
0.0
0.0
197.4
375.4
0.0
0.0
0.0
375.4
180.8
Mar-16F
319.4
0.0
319.4
(86.7)
232.7
0.0
(24.7)
(0.5)
(1.6)
205.8
0.0
205.8
(27.4)
0.0
0.0
0.0
178.4
0.0
0.0
0.0
178.4
182.8
Mar-17F
331.9
0.0
331.9
(90.3)
241.7
0.0
(25.0)
(0.5)
(1.6)
214.5
0.0
214.5
(28.0)
0.0
0.0
0.0
186.5
0.0
0.0
0.0
186.5
190.1
Mar-18F
397.2
0.0
397.2
(109.7)
287.5
0.0
(26.7)
(0.5)
(1.6)
258.6
0.0
258.6
(28.0)
0.0
0.0
0.0
230.7
0.0
0.0
0.0
230.7
234.6
Mar-14A
314.3
25.6
3.4
(1.1)
(152.2)
190.0
(90.2)
(47.6)
0.0
(137.9)
94.1
0.0
(97.3)
(25.5)
(28.7)
23.4
52.2
120.7
Mar-15A
375.4
23.6
7.1
(1.9)
(199.3)
204.9
(34.2)
(20.3)
0.0
(54.5)
(54.3)
0.0
(97.5)
(22.4)
(174.2)
(23.8)
150.4
73.7
Mar-16F
178.4
27.4
0.0
0.0
0.0
205.8
(125.0)
0.0
0.0
(125.0)
145.0
0.0
(182.8)
(106.2)
(144.0)
(63.2)
80.9
198.4
Mar-17F
186.5
28.0
0.0
0.0
0.0
214.5
0.0
0.0
0.2
0.2
31.3
0.0
(190.1)
(24.5)
(183.4)
31.3
214.7
217.8
Mar-18F
230.7
28.0
0.0
0.0
0.0
258.6
0.0
0.0
0.2
0.2
0.0
0.0
(234.6)
(24.2)
(258.8)
0.0
258.8
230.7
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
182
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
3,094
0
77
3,171
96
0
9
0
105
68
344
1
413
784
50
834
2,029
0
Mar-16F
3,267
0
369
3,636
9
0
16
0
25
70
139
0
209
1,081
59
1,140
2,312
0
Mar-17F
3,267
0
369
3,636
40
0
16
0
56
70
50
0
120
1,201
59
1,260
2,312
0
Mar-18F
3,267
0
369
3,636
40
0
16
0
56
70
125
0
195
1,126
59
1,185
2,312
0
2,312
2,312
2,312
2,312
Mar-14A
8.3%
9.9%
71.8%
7.1%
7.31
0.023%
53%
0.25
0.25
0.23
10.1%
Mar-15A
4.9%
6.5%
72.8%
5.1%
8.47
0.000%
48%
0.45
0.45
0.37
11.0%
Mar-16F
1.7%
1.8%
72.9%
0.3%
7.50
0.000%
102%
0.12
0.12
0.04
5.0%
Mar-17F
3.9%
3.9%
72.8%
4.0%
7.62
0.000%
102%
0.47
0.47
0.33
5.1%
Mar-18F
19.7%
19.0%
72.4%
23.4%
9.19
0.000%
102%
0.29
0.29
0.21
6.2%
Mar-14A
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-15A
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-16F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-17F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-18F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
2,029
Mar-15A
3,267
0
164
3,431
72
0
16
0
88
70
125
0
196
949
59
1,008
2,312
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
183
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.01
S$1.17
S$1.17
16.0%
Reuters:
Bloomberg:
Market cap:
MAPL.SI
MLT SP
US$1,767m
S$2,496m
US$2.56m
S$3.61m
2,474m
59.0%
No change.
1.200
104.0
1.100
100.0
1.000
96.0
0.900
20
15
10
5
92.0
Vol m
108.0
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-1.0
3.5
Inorganic growth to continue, keep our Add rating with an unchanged target price.
3M
-0.5
-0.2
YTD, MLT has completed three yield-accretive acquisitions of c.S$295m to scale up its
presence in growth markets. It acquired Dakonet Logistics Centre in South Korea
(S$21m), Mapletree Logistics Park Bac Ninh Phase 1 in Vietnam (S$21m) and Coles
Chilled Distribution Centre in Sydney (S$253m). With 100% occupancy at all three
properties and NPI yields of 8%, 10% and 5.6% respectively, these acquisitions are
expected to boost FY17 DPU by c.4%.
Sep-15
Source: Bloomberg
Price performance
We expect the higher income from the redevelopment of its older properties to more
than offset the higher expenses from asset conversion.
1.300
Dec-14
MLT has two assets to be converted to MTB (multi-tenanted building), another two
properties earmarked for redevelopment/divestment in Singapore in FY16 and nine
single-user leases that are expiring in FY17. However, we expect the higher income
from the redevelopment of its older properties to more than offset the higher expenses
from asset conversions. The first redeveloped property the enlarged 63,500 sq m Toh
Guan Estate is slated for completion in 1QFY17.
Price Close
12M
-13.4
-0.6
In the meantime, MLT continues to expand via inorganic means such as tapping on
third-party assets and its sponsors extensive pipeline. Its gearing stands at 38.8%,
giving it debt headroom of S$460m (based on maximum 45% gearing). We maintain our
Add call on the stock, with an unchanged DDM-based target price of S$1.17.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
310.7
267.6
292.7
179.7
0.078
16.7%
12.92
0.074
7.31%
33.1%
0.97
1.03
8.23%
Mar-15A
330.1
277.4
241.0
184.9
0.073
(6.4%)
13.80
0.075
7.46%
34.1%
1.03
0.98
7.29%
Mar-16F
362.3
300.4
175.0
191.2
0.077
5.1%
13.12
0.077
7.69%
39.6%
1.03
0.98
7.47%
0%
1.02
Mar-17F
377.7
313.9
179.6
195.7
0.078
2.4%
12.81
0.079
7.87%
39.8%
1.03
0.98
7.64%
0%
1.03
Mar-18F
381.8
317.2
182.7
198.8
0.080
1.6%
12.61
0.080
8.00%
39.8%
1.03
0.98
7.77%
0%
1.02
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
3.5
-0.2
Absolute
-1.0
-0.5
Major shareholders
12M
-0.6
-13.4
% held
Temasek Holdings
41.0
6.4
Columbia Wanger
5.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
45.0%
39.4%
33.8%
28.1%
22.5%
16.9%
11.3%
5.6%
0.0%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Mar-14A
310.7
0.0
310.7
(43.1)
267.6
0.0
(30.8)
(0.6)
13.2
249.4
0.0
249.4
(28.7)
0.0
0.0
108.5
329.2
(17.0)
(0.6)
(18.8)
292.7
179.7
Mar-15A
330.1
0.0
330.1
(52.7)
277.4
0.0
(32.7)
(0.6)
9.1
253.2
0.0
253.2
(32.3)
0.0
0.0
68.6
289.4
(29.1)
(0.5)
(18.8)
241.0
184.9
Mar-16F
362.3
0.0
362.3
(62.0)
300.4
0.0
(38.9)
(0.8)
0.0
260.7
0.0
260.7
(38.7)
0.0
0.0
(15.4)
206.6
(12.3)
(0.5)
(18.8)
175.0
191.2
Mar-17F
377.7
0.0
377.7
(63.7)
313.9
0.0
(39.0)
(0.8)
0.0
274.1
0.0
274.1
(47.3)
0.0
0.0
(15.4)
211.4
(12.6)
(0.5)
(18.8)
179.6
195.7
Mar-18F
381.8
0.0
381.8
(64.5)
317.2
0.0
(39.0)
(0.8)
0.0
277.4
0.0
277.4
(47.3)
0.0
0.0
(15.4)
214.7
(12.8)
(0.5)
(18.8)
182.7
198.8
Mar-14A
329.2
28.7
(24.9)
(8.8)
(109.5)
214.7
0.0
(100.3)
0.0
(100.3)
73.7
0.0
(176.0)
(27.2)
(129.5)
(15.0)
114.5
161.0
Mar-15A
289.4
32.3
(0.8)
(11.6)
(69.3)
240.0
0.0
(246.5)
0.0
(246.5)
206.8
0.0
(176.0)
(29.9)
0.9
(5.6)
(6.5)
170.3
Mar-16F
206.6
38.7
0.0
(12.3)
16.0
249.0
0.0
(434.1)
0.0
(434.1)
434.7
0.0
(210.0)
(39.3)
185.4
0.3
(185.1)
210.3
Mar-17F
211.4
47.3
0.0
(12.6)
16.0
262.2
0.0
(15.6)
0.0
(15.6)
16.2
0.0
(214.5)
(47.9)
(246.3)
0.3
246.6
214.9
Mar-18F
214.7
47.3
0.0
(12.8)
16.0
265.3
0.0
0.6
0.0
0.6
0.0
0.0
(217.7)
(47.9)
(265.6)
0.3
265.9
218.0
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
185
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
4,235
0
0
4,235
114
0
16
31
162
140
149
11
300
1,307
59
1,365
2,382
6
344
2,732
Mar-15A
4,631
0
0
4,631
107
0
21
29
156
164
57
24
245
1,575
80
1,655
2,538
6
344
2,888
Mar-16F
5,066
0
0
5,066
107
0
21
29
156
164
57
24
245
2,010
80
2,090
2,538
6
344
2,888
Mar-17F
5,082
0
0
5,082
107
0
21
29
156
164
57
24
245
2,026
80
2,106
2,538
6
344
2,888
Mar-18F
5,082
0
0
5,082
107
0
21
29
156
164
57
24
245
2,026
80
2,106
2,538
6
344
2,888
Mar-14A
0.95%
(0.16%)
86.1%
7.14%
8.50
5.2%
61%
0.54
0.54
0.38
6.78%
Mar-15A
6.25%
3.67%
84.0%
2.04%
7.63
10.1%
77%
0.64
0.64
0.44
5.25%
Mar-16F
9.76%
8.26%
82.9%
3.04%
6.64
5.9%
109%
0.64
0.64
0.44
3.50%
Mar-17F
4.24%
4.52%
83.1%
2.37%
5.72
5.9%
109%
0.64
0.64
0.44
3.43%
Mar-18F
1.09%
1.05%
83.1%
1.58%
5.79
5.9%
109%
0.64
0.64
0.44
3.49%
Mar-14A
N/A
N/A
N/A
N/A
98.3%
4,235.1
N/A
Mar-15A
N/A
N/A
N/A
N/A
98.3%
4,631.2
N/A
Mar-16F
N/A
N/A
N/A
N/A
97.0%
5,065.9
N/A
Mar-17F
N/A
N/A
N/A
N/A
97.0%
5,082.1
N/A
Mar-18F
N/A
N/A
N/A
N/A
97.0%
5,082.1
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
186
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.22
S$1.30
S$1.30
6.6%
Reuters:
Bloomberg:
Market cap:
NEPS.SI
NOL SP
US$2,246m
S$3,174m
US$10.94m
S$15.45m
2,596m
30.0%
Container shipping is likely to do poorly in the near future, barring short cyclical
bounces, and NOL is unprepared for the competitive future without 20k teu ships.
We maintain Hold, and upgrade the target price to the offer price of S$1.30. Our
previous target was based on trough P/BV valuation of 0.76x (1 s.d. below average).
If the acquisition gains the approval of the US, EU and Chinese regulators
(expected by mid-2016), the deal should be completed by August 2016.
1.100
140
0.900
114
0.700
80
60
40
20
87
Vol m
1.300
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
16.7
21.2
3M
41.9
42.2
12M
49.7
62.5
We expect the regulatory authorities to give the go-ahead for the CMA CGM acquisition
of NOL, as it will not disturb the competitive position of the alliances too greatly. The
Ocean Threes (O3) capacity share of the transpacific trade will rise from 14.5%
currently to 18.8% with NOL inside, while its share of the Asia-Europe trade will rise from
21% to 24.9% - still below the 30% threshold that would attract EU regulatory concern.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
E raymond.yap@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
8,831
110.2
(75.6)
(0.12)
(16.0%)
NA
0%
53.50
185.1
182%
1.08
(14.2%)
Dec-14A
8,617
280.2
(259.8)
(0.09)
(19.4%)
NA
0%
21.68
12.6
225%
1.28
(12.8%)
Dec-15F
5,829
310.6
692.6
(0.07)
(21.1%)
NA
0%
15.84
NA
116%
0.92
(9.3%)
(5.03)
Dec-16F
5,496
346.7
(119.9)
(0.05)
(38.4%)
NA
0%
13.76
7.4
115%
0.97
(5.0%)
9.21
Dec-17F
5,662
265.6
(175.9)
(0.07)
46.7%
NA
0%
17.19
8.1
115%
1.05
(7.9%)
(5.63)
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
21.2
42.2
62.5
Absolute
16.7
41.9
49.7
Major shareholders
Temasek Holdings
% held
67.4
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
15.0%
10.6%
6.3%
1.9%
-2.5%
-6.9%
-11.3%
-15.6%
-20.0%
ROE (rhs)
Dec-13A
8,831
850
110
(321)
(211)
(41)
8
0
(244)
229
(15)
(56)
Dec-14A
8,617
988
280
(393)
(112)
(106)
12
0
(207)
(14)
(221)
(35)
Dec-15F
5,829
779
311
(410)
(100)
(97)
7
0
(189)
887
698
0
Dec-16F
5,496
784
347
(390)
(43)
(79)
7
0
(115)
0
(115)
0
Dec-17F
5,662
724
266
(367)
(101)
(77)
7
0
(171)
0
(171)
0
(71)
(4)
0
(256)
(4)
0
698
(5)
0
(115)
(5)
0
(171)
(5)
0
(76)
(304)
(304)
(260)
(246)
(246)
693
(194)
(194)
(120)
(120)
(120)
(176)
(176)
(176)
Dec-13A
110
Dec-14A
280
Dec-15F
311
Dec-16F
347
Dec-17F
266
10
(11)
13
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
126
(96)
(51)
(58)
32
(1,305)
393
0
3
(910)
890
0
0
(3)
(19)
(126)
(69)
69
(350)
28
0
5
(317)
425
0
0
(4)
111
(111)
0
321
(105)
1,238
0
0
1,133
(1,676)
0
0
0
91
(91)
0
335
(105)
0
0
0
(105)
74
0
0
0
92
(92)
0
279
0
0
0
0
0
0
0
0
0
75
962
84
12
(827)
72
493
245
177
(122)
(97)
(1,773)
(319)
(222)
1,565
(79)
(6)
225
304
322
(77)
(77)
202
279
371
188
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
981
1,073
254
158
2,467
6,098
275
190
0
6,562
599
Dec-14A
1,226
1,080
175
128
2,610
6,012
288
189
0
6,490
615
Dec-15F
707
580
116
128
1,531
5,707
295
189
0
6,192
615
Dec-16F
932
547
108
128
1,715
5,423
302
189
0
5,914
615
Dec-17F
1,134
563
113
128
1,939
5,056
309
189
0
5,554
615
1,252
460
2,312
4,267
1,178
435
2,229
4,676
780
435
1,830
3,000
728
435
1,778
3,074
763
435
1,813
3,074
319
4,586
0
6,898
2,077
54
2,131
387
5,063
0
7,292
1,750
58
1,808
387
3,387
0
5,217
2,443
63
2,505
387
3,460
0
5,238
2,323
68
2,391
387
3,460
0
5,273
2,147
73
2,220
Dec-13A
(7.2%)
174%
1.25%
(1.50)
0.80
(4.15)
0%
NA
44.73
11.93
57.17
(3.29%)
(3.04%)
(2.43%)
Dec-14A
(2.4%)
154%
3.25%
(1.57)
0.67
(0.89)
0%
NA
45.61
10.27
58.14
(1.54%)
(1.32%)
(1.31%)
Dec-15F
(32.4%)
11%
5.33%
(1.12)
0.94
(0.89)
0%
NA
51.98
10.53
70.76
(1.38%)
(1.29%)
(1.30%)
Dec-16F
(5.7%)
12%
6.31%
(1.06)
0.89
(0.47)
0%
NA
37.51
8.71
58.55
(0.65%)
(0.50%)
(0.64%)
Dec-17F
3.0%
(23%)
4.69%
(0.98)
0.82
(1.10)
0%
NA
35.77
8.19
55.08
(1.60%)
(1.43%)
(1.42%)
Dec-13A
2,317.6
1,158.8
-7.6%
2.95
-2.5%
(0.05)
-278.0%
166.0
166
Dec-14A
2,264.6
1,132.3
-2.3%
2.83
-4.0%
(0.08)
64.9%
176.0
176
Dec-15F
1,917.8
958.9
-15.3%
2.43
-13.9%
(0.28)
245.0%
176.0
176
Dec-16F
1,955.9
978.0
2.0%
2.54
4.6%
0.09
-132.7%
176.0
176
Dec-17F
1,932.9
966.4
-1.2%
2.66
4.6%
0.09
0.4%
176.0
176
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Average Revenue (US$/FEU)
Average Revenue (US$/TEU)
Liner rates (yoy chg. %)
Cargo Carried (m FEU)
Cargo carried (FEU, yoy chg. %)
Cargo Carried (m TEU)
Cargo carried (TEU, yoy chg. %)
Fleet Size (no. Of Vessels)
No. Of Container Ships
189
Company Note
Singapore
OCBC
Current price:
Target price:
Previous target:
Up/downside:
S$8.75
S$10.88
S$10.88
24.3%
Reuters:
Bloomberg:
Market cap:
OCBC.SI
OCBC SP
US$25,487m
S$36,007m
US$36.60m
S$51.56m
3,993m
65.0%
Price Close
10.40
100.7
9.40
97.3
8.40
30
94.0
Vol m
20
10
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Maintained best-in-class credit quality even through the GFC; we expect the trend to
continue amid a deterioration in credit cycle.
Maintain Add, with a GGM-based target price of S$10.88 (1.22x CY16 P/BV).
Remains our sector top pick.
11.40
Dec-14
1M
-3.5
1.0
3M
-2.7
-2.4
12M
-14.2
-1.4
OCBC has built a stronger foothold in Greater China with the acquisition of Wing Hang
Bank (WHB). Its strategy of financing cross-border investments between Greater China
and ASEAN places it in a prime position to benefit from Chinas One Belt, One Road
(OBOR) policy as Chinese corporates look to finance infrastructure projects in ASEAN.
WHB has also become a funding base for US$ and renminbi, in preparation for greater
onshore-offshore loan demand in China.
Maintain Add
We maintain our Add rating on OCBC, with a GGM-based target price of S$10.88 (1.22x
CY16 P/BV). OCBC remains our top pick in the sector for its resilient credit quality and
best mix of exposure to ASEAN and China which allows it to benefit from both the AEC
and OBOR.
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Dec-13A
3,883
2,738
6,621
(266.0)
2,768
0.80
(2.1%)
10.87
0.34
3.89%
7.30
1.20
10.9%
Dec-14A
4,736
3,604
8,340
(357.0)
3,842
0.92
14.3%
9.16
0.36
4.11%
7.79
1.12
12.2%
Dec-15F
5,200
3,387
8,587
(467.8)
3,858
0.94
2.2%
8.99
0.36
4.11%
8.39
1.04
11.6%
0%
1.04
Dec-16F
5,646
3,398
9,044
(844.8)
3,787
0.95
0.9%
9.23
0.40
4.57%
8.94
0.98
10.9%
0%
1.00
Dec-17F
6,011
3,496
9,507
(631.7)
4,205
1.05
11.1%
8.31
0.39
4.46%
9.61
0.91
11.4%
0%
1.06
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
1.0
-2.4
-1.4
Absolute
-3.5
-2.7
-14.2
Major shareholders
Lee family
% held
25.8
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
12.50%
12.17%
11.83%
11.50%
11.17%
10.83%
10.50%
10.17%
9.83%
9.50%
14.0
50%
12.0
36%
10.0
21%
8.0
7%
6.0
-7%
4.0
-21%
2.0
-36%
0.0
Jan-11 Jan-12
-50%
Jan-13
ROE (rhs)
Dec-13A
3,883
2,738
6,621
(2,784)
3,837
(266)
3,571
54
3,625
(58)
3,567
0
3,567
(597)
Dec-14A
4,736
3,604
8,340
(3,258)
5,082
(357)
4,725
112
4,837
(74)
4,763
0
4,763
(687)
Dec-15F
5,200
3,387
8,587
(3,607)
4,981
(468)
4,513
386
4,899
(98)
4,801
0
4,801
(744)
Dec-16F
5,646
3,398
9,044
(3,789)
5,255
(845)
4,410
405
4,815
(98)
4,717
0
4,717
(731)
Dec-17F
6,011
3,496
9,507
(3,965)
5,543
(632)
4,911
426
5,337
(98)
5,239
0
5,239
(812)
2,970
(202)
0
0
2,768
2,768
4,076
(234)
0
0
3,842
3,419
4,057
(199)
0
0
3,858
3,753
3,986
(199)
0
0
3,787
3,787
4,427
(221)
0
0
4,205
4,205
Dec-13A
84.8%
85.8%
74.9%
100.0%
49.6%
77.2%
16.2%
44.4%
0.048%
0.026%
0.111%
Dec-14A
83.6%
84.7%
76.1%
100.0%
51.7%
78.0%
16.2%
46.9%
0.094%
0.053%
0.231%
Dec-15F
82.7%
84.0%
76.0%
100.0%
51.8%
76.8%
17.0%
49.9%
0.142%
0.075%
0.220%
Dec-16F
81.6%
83.3%
78.4%
100.0%
52.0%
76.3%
17.8%
53.2%
0.187%
0.099%
0.399%
Dec-17F
80.7%
82.7%
77.5%
100.0%
52.1%
75.8%
18.6%
56.5%
0.195%
0.104%
0.287%
191
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
205,677
40,212
Dec-14A
246,508
45,715
Dec-15F
255,166
49,785
Dec-16F
268,877
49,776
Dec-17F
276,983
49,771
245,889
1,750
247,639
3,741
67,727
71,468
19,341
0
338,448
195,974
21,549
33,276
250,799
0
59,570
310,369
25,115
2,964
28,079
292,223
2,247
294,470
5,157
76,285
81,442
25,314
0
401,226
245,519
20,503
36,492
302,514
0
64,527
367,041
31,097
3,088
34,185
304,951
2,715
307,666
7,773
76,864
84,636
24,001
0
416,303
257,795
23,328
34,199
315,322
0
64,152
379,475
33,517
3,287
36,804
318,653
3,560
322,213
7,675
77,219
84,894
24,396
0
431,502
270,685
23,445
34,015
328,144
0
64,152
392,296
35,707
3,486
39,193
326,754
4,191
330,945
7,577
77,595
85,171
31,707
0
447,824
284,219
23,562
33,793
341,574
0
64,152
405,726
38,355
3,708
42,062
Dec-13A
(16.8%)
(27.1%)
(28.1%)
58.6%
1.03%
2.60%
1.57%
1.98%
2.77%
6.9%
1.22%
16.7%
42.3%
0.87%
Dec-14A
26.0%
32.4%
33.5%
56.8%
1.07%
2.70%
1.63%
1.93%
2.80%
7.0%
1.28%
14.4%
37.4%
1.04%
Dec-15F
3.0%
(2.0%)
0.8%
60.6%
1.12%
2.76%
1.64%
2.02%
2.63%
9.4%
1.27%
15.5%
37.3%
0.94%
Dec-16F
5.3%
5.5%
(1.7%)
62.4%
1.13%
2.80%
1.67%
2.09%
2.58%
16.1%
1.33%
15.5%
42.2%
0.89%
Dec-17F
5.1%
5.5%
11.1%
63.2%
1.13%
2.88%
1.75%
2.11%
2.49%
11.4%
1.37%
15.5%
37.0%
0.96%
Dec-13A
18.0%
1.6%
-35.0%
42.0%
0.6%
141.2%
0.9%
14.6%
32.3%
18.7%
85.7%
0.7%
13.8%
Dec-14A
23.6%
1.7%
31.6%
39.1%
0.5%
175.7%
0.9%
13.8%
29.2%
25.3%
84.5%
0.6%
9.5%
Dec-15F
3.8%
1.7%
-6.0%
42.0%
0.6%
142.9%
1.0%
14.8%
28.1%
5.0%
83.7%
0.9%
9.7%
Dec-16F
3.7%
1.7%
0.3%
41.9%
0.5%
158.6%
1.1%
14.0%
25.9%
5.0%
82.9%
1.0%
0.0%
Dec-17F
3.8%
1.8%
2.9%
41.7%
0.5%
163.2%
1.1%
13.8%
24.5%
5.0%
82.1%
1.1%
3.9%
Key Ratios
Total Income Growth
Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio
Return On Average Assets
Key Drivers
Loan Growth (%)
Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)
192
Company Note
Singapore
OSIM International
Current price:
Target price:
Previous target:
Up/downside:
S$1.06
S$1.13
S$1.40
7.0%
Reuters:
Bloomberg:
Market cap:
OSIL.SI
OSIM SP
US$556.4m
S$786.1m
US$2.11m
S$2.97m
772.9m
37.1%
OSIM is going through some tough times at the moment. Sales of its core OSIM
massage equipment has declined yoy in all five key markets.
Part of the problem is currency. OSIM stuck to a same US$ pricing formula for all its
regions. Where the local currency has fallen, local prices have been jacked up.
The real problem is weak income growth and competition. Real income growth in
Asia is weak. In China, cheap copycats have spawned in online retail channels
2015 saw spending on TWG rollout and legal expenses. That should end in 2016.
Our target price is lowered to S$1.13, based on 13x CY17 P/E .
1.90
101.9
1.40
80.4
0.90
15
59.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-21.8
-17.3
3M
-28.1
-27.8
12M
-48.0
-35.2
The weak macro retail environment is the real challenge. 3Q group sales was -11% yoy,
Ex-TWG, core OSIM sales probably shrank 13-14% yoy. Management guided that North
Asia sales contracted double-digit (mostly China) while the markets that did even worse
were ASEAN (Singapore and Malaysia). Malaysias retail pricing jumped on the RM
crashed, so the effect of weak sales could last a while longer.
No short-term turnaround
Typically, the business model is to launch new products whenever sales of old ones
become tired. The touted blockbuster of the year, uMagic, was already launched in midyear. While it did show initial promise on launch, sales have come crashing down in 3Q.
There are new accessory products (uCrown3, uPamper2, uGallop2) slated for launch
ahead, we see these as necessary actions to fight a weak macro tide.
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
647.6
140.4
101.6
0.13
13.5%
8.60
0.060
5.66%
4.16
7.95
(69.2%)
2.83
41.7%
Dec-14A
691.1
151.6
102.2
0.13
(0.3%)
8.21
0.060
5.66%
3.96
16.15
(49.2%)
1.84
28.8%
Dec-15F
599.1
91.1
52.7
0.06
(51.6%)
16.17
0.060
5.66%
6.89
11.67
(53.9%)
1.95
12.0%
0%
0.80
Dec-16F
631.9
107.8
66.2
0.08
22.0%
13.19
0.065
6.13%
5.95
13.70
(54.7%)
1.95
14.8%
0%
0.84
Dec-17F
665.4
117.8
72.9
0.09
10.1%
12.16
0.065
6.13%
5.28
12.35
(56.3%)
1.87
15.7%
0%
0.83
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BY THE NUMBERS
1M
3M
12M
Relative
-17.3
-27.8
-35.2
Absolute
-21.8
-28.1
-48.0
Major shareholders
% held
62.9
P/BV vs ROE
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
60.0%
54.0%
48.0%
42.0%
36.0%
30.0%
24.0%
18.0%
12.0%
6.0%
0.0%
35.0
100%
30.0
77%
25.0
54%
20.0
31%
15.0
9%
10.0
-14%
5.0
-37%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-60%
ROE (rhs)
Dec-13A
647.6
455.1
140.4
(13.7)
126.7
(0.4)
2.9
0.0
129.2
Dec-14A
691.1
486.3
151.6
(21.8)
129.8
1.5
1.0
0.0
132.3
Dec-15F
599.1
421.7
91.1
(23.0)
68.1
1.7
1.6
0.0
71.4
Dec-16F
631.9
444.8
107.8
(23.5)
84.3
2.2
1.7
0.0
88.1
Dec-17F
665.4
468.4
117.8
(23.9)
93.9
2.4
1.7
0.0
98.0
129.2
(27.6)
132.3
(30.1)
71.4
(20.6)
88.1
(23.8)
98.0
(26.9)
101.6
(0.0)
102.2
(0.0)
50.9
1.9
64.3
1.9
71.0
1.9
101.6
97.4
97.4
102.2
102.2
102.2
52.7
52.7
52.7
66.2
66.2
66.2
72.9
72.9
72.9
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
140.4
7.3
(15.0)
Dec-14A
151.6
0.0
(16.0)
Dec-15F
91.1
0.0
18.9
Dec-16F
107.8
0.0
(5.3)
Dec-17F
117.8
0.0
(5.4)
7.4
(5.8)
(29.2)
105.2
(13.9)
2.7
(3.5)
(26.0)
108.9
(24.1)
2.0
(4.9)
(20.6)
86.6
(13.5)
3.5
(5.0)
(23.8)
77.3
(13.5)
5.1
(5.3)
(26.9)
85.2
(13.5)
(2.1)
11.7
(4.4)
4.5
0.4
(7.8)
(36.2)
1.6
(0.4)
(23.0)
(34.0)
0.0
(12.0)
(45.5)
0.0
0.0
(13.5)
0.0
0.0
0.0
(48.7)
0.0
0.0
(13.5)
0.0
0.0
0.0
(54.3)
0.0
0.0
(13.5)
0.0
0.0
0.0
(54.3)
(2.2)
(41.4)
59.4
105.3
106.6
164.9
73.4
159.4
51.9
89.4
0.0
(48.7)
24.3
73.1
78.0
0.0
(54.3)
9.4
63.8
68.7
0.0
(54.3)
17.4
71.7
77.1
194
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
267.3
42.0
72.5
36.0
417.8
25.2
18.5
189.9
28.6
262.1
29.5
Dec-14A
427.6
43.5
71.6
44.2
586.9
36.4
18.4
180.6
30.1
265.6
17.2
Dec-15F
451.9
38.1
58.2
44.2
592.3
36.0
18.4
177.9
30.1
262.4
17.2
Dec-16F
461.3
40.2
61.3
44.2
607.0
34.1
18.4
175.1
30.1
257.7
17.2
Dec-17F
478.7
42.3
64.6
44.2
629.8
30.8
18.4
172.3
30.1
251.6
17.2
101.6
165.7
296.9
0.0
0.0
39.2
39.2
0.0
336.0
271.2
72.7
343.9
96.5
42.9
156.6
0.0
168.3
35.7
204.0
0.0
360.5
438.4
53.6
491.9
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
442.5
51.7
494.2
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
454.3
49.8
504.2
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
472.9
48.0
520.9
Dec-13A
7.6%
10.9%
21.7%
0.33
0.37
21.89
21.3%
35.6%
23.09
119.7
50.5
104%
36.9%
17.7%
Dec-14A
6.7%
8.0%
21.9%
0.32
0.58
37.52
22.8%
44.7%
22.57
128.4
112.3
85%
25.7%
13.2%
Dec-15F
(13.3%)
(39.9%)
15.2%
0.33
0.54
13.85
28.8%
92.4%
24.86
133.6
198.6
21%
11.0%
5.8%
Dec-16F
5.5%
18.2%
17.1%
0.33
0.54
16.97
27.0%
82.1%
22.66
116.9
188.8
29%
13.4%
7.3%
Dec-17F
5.3%
9.3%
17.7%
0.35
0.57
17.65
27.5%
74.5%
22.62
116.7
178.8
32%
14.6%
7.9%
Dec-13A
N/A
7.6%
N/A
N/A
N/A
N/A
861
N/A
N/A
Dec-14A
N/A
6.7%
N/A
N/A
N/A
N/A
875
N/A
N/A
Dec-15F
N/A
-13.3%
N/A
N/A
N/A
N/A
891
N/A
N/A
Dec-16F
N/A
5.5%
N/A
N/A
N/A
N/A
911
N/A
N/A
Dec-17F
N/A
5.3%
N/A
N/A
N/A
N/A
931
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
Outlets #/POS (main prod./serv.)
Outlets #/POS (2ndary prod./serv.)
A&P As % Of Sales
195
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.69
S$0.81
S$0.81
17.7%
Reuters:
Bloomberg:
Market cap:
OUEC.SI
OUECT SP
US$628.0m
S$887.2m
US$0.13m
S$0.18m
1,292m
44.3%
Price Close
0.700
105.7
0.600
97.3
0.500
200
150
100
50
89.0
Vol m
0.800
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
OUE Bayfront and Lippo Plaza enjoyed positive rental reversions of 22.3% and
7.7%, respectively.
Robust balance sheet with no refinancing till 2017.
Maintain Add with unchanged target price of S$0.81.
No changes.
Dec-14
1M
0.7
5.2
3M
9.5
9.8
12M
-4.6
8.2
Portfolio occupancy crept up 1.8% pts to 97.1% as Lippo Plazas occupancy rose to
100% while, at OUE Bayfront, backfilling two-thirds of the space vacated by one tenant
earlier helped boost take-up at the property to 97.4%. In terms of lease expiries, the trust
has a minimal 0.1% of income to be renewed for FY15 and a further 21% in FY16,
largely from Lippo Plaza in Shanghai.
Maintain Add
Although FY15 DPU is affected by dilution from its recent rights issue, we expect the
income stream from ORP to impact positively and boost FY16 DPU. We retain our Add
call, with an FY16 DPU yield of 7.6%, and our DDM-based target price of S$0.81.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-15F
98.3
74.8
34.30
50.70
0.031
NA
22.71
0.046
6.67%
40.0%
1.30
0.53
2.60%
0.96
Dec-16F
164.1
124.1
51.08
68.43
0.039
26.4%
17.54
0.053
7.64%
39.4%
1.29
0.53
3.04%
1.05
Dec-17F
171.0
129.4
53.73
70.91
0.041
4.2%
16.84
0.054
7.84%
39.3%
1.28
0.54
3.18%
1.04
SOURCE: COMPANY DATA, CIMB FORECASTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
5.2
9.8
8.2
Absolute
0.7
9.5
-4.6
Major shareholders
% held
OUE
42.7
Gordon Tang
13.0
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
40.50%
39.94%
39.38%
38.81%
38.25%
37.69%
37.13%
36.56%
36.00%
0.0600
9.0%
0.0500
7.5%
0.0400
6.0%
0.0300
4.5%
0.0200
3.0%
0.0100
1.5%
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
DPS (lhs)
Dec-15F
98.3
0.0
98.3
(23.6)
74.8
0.0
(6.1)
(0.4)
(1.9)
66.2
(4.2)
62.0
(26.2)
Dec-16F
164.1
0.0
164.1
(39.9)
124.1
0.0
(9.2)
(0.4)
(1.9)
112.6
(3.4)
109.2
(34.5)
Dec-17F
171.0
0.0
171.0
(41.6)
129.4
0.0
(9.2)
(0.4)
(1.9)
117.8
(2.7)
115.1
(34.5)
8.9
0.0
44.7
(6.9)
(3.4)
3.1
0.0
77.8
(13.2)
(13.5)
1.0
0.0
81.6
(13.8)
(14.0)
34.3
50.7
51.1
68.4
53.7
70.9
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
Dec-15F
45
30
18
(7)
0
86
(1,286)
0
0
(1,286)
Dec-16F
78
38
41
(13)
0
143
0
0
0
0
Dec-17F
82
37
4
(14)
0
109
0
0
0
0
734
(51)
532
1,216
16
(1,200)
(1,226)
9
(68)
(35)
(94)
50
143
109
9
(71)
(35)
(96)
13
109
75
197
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-15F
2,917
0
10
2,927
47
Dec-16F
2,917
0
7
2,923
96
Dec-17F
2,917
0
4
2,921
110
2
49
38
0
4
42
1,191
63
1,254
1,679
3
100
65
0
4
69
1,191
78
1,269
1,685
4
113
68
0
4
72
1,191
80
1,271
1,691
1,679
1,685
1,691
Dec-15F
NA
NA
76.0%
NA
2.37
15.6%
151%
1.15
1.15
1.10
1.47%
Dec-16F
66.9%
66.1%
75.7%
14.6%
3.16
17.0%
143%
1.44
1.44
1.39
1.70%
Dec-17F
4.2%
4.2%
75.7%
2.6%
3.33
16.9%
141%
1.57
1.57
1.52
1.77%
Dec-15F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Dec-16F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Dec-17F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
198
Company Note
Singapore
Worth a revisit
Current price:
Target price:
Previous target:
Up/downside:
S$0.79
S$0.98
S$0.98
23.9%
Reuters:
Bloomberg:
Market cap:
OUER.SI
OUEHT SP
US$746.7m
S$1,055m
US$0.27m
S$0.39m
1,313m
58.0%
Price Close
0.900
99.9
0.800
96.4
0.700
6
93.0
Vol m
2
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
MOS and MG are quality assets which could offer resilience for RevPARs and
positive rental revisions.
Worth a revisit
1.000
Dec-14
1M
-4.3
0.2
3M
1.3
1.6
12M
-13.7
-0.9
MOS and Mandarin Gallery (MG) are strategically located at the heart of Orchard Road,
Singapores premier shopping belt. We believe that the location will give MOS RevPARs
more resilience vs. peers. Meanwhile, notwithstanding the challenging retail scene in
Singapore as well as more expected fit outs (as a result of tenancy changes), we expect
MG to achieve positive rental reversion for the remaining 21% of leases (by gross rent)
due later in the year. MG achieved rental reversion of +6% for 3Q15.
Acquisition of CPEX
OUE-HT is set to acquire the Crowne Plaza Extension (CPEX) for S$205m by Jun 16,
when the asset is expected to be completed. Given that OUE-HTs gearing level would
be able to fund 75% of the acquisition via debt (before hitting gearing level of 45%), we
have factored in a S$110m dilution. In addition, AEI for MOS which commenced in end2013 will continue into 2016. The remaining 270 out of 430 guest rooms would be
renovated in phases. The refurbishment is funded by the sponsor, OUE Ltd.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
50.6
44.8
80.46
38.2
0.023
0%
35.03
0.029
3.67%
31.7%
0.93
0.85
Dec-14A
115.9
103.2
78.58
89.0
0.060
166%
13.18
0.067
8.53%
32.5%
0.91
0.87
6.53%
Dec-15F
125.6
111.2
73.38
89.5
0.055
(8%)
14.26
0.068
8.55%
41.4%
0.90
0.88
6.13%
0%
1.04
Dec-16F
141.3
125.9
85.12
100.5
0.061
10%
13.01
0.072
9.08%
41.9%
0.89
0.89
6.82%
0%
1.07
Dec-17F
154.2
138.0
97.29
110.5
0.066
9%
11.99
0.067
8.53%
41.7%
0.88
0.89
7.45%
0%
1.04
Powered by
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BY THE NUMBERS
1M
3M
Relative
0.2
1.6
-0.9
Absolute
-4.3
1.3
-13.7
Major shareholders
OUE Ltd
Credit Suisse AG
12M
% held
40.3
9.5
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.0800
10.9%
0.0750
8.2%
0.0700
5.5%
0.0650
2.7%
0.0600
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
DPS (lhs)
Dec-13A
50.6
0.0
50.6
(5.8)
44.8
0.0
(4.2)
(0.1)
(0.9)
29.5
0.0
29.5
(10.1)
0.0
50.9
80.5
0.0
0.0
0.0
80.5
38.2
Dec-14A
115.9
0.0
115.9
(12.7)
103.2
0.0
(9.5)
(0.3)
(1.2)
78.7
0.0
78.7
(13.4)
0.0
(0.1)
78.6
0.0
0.0
0.0
78.6
89.0
Dec-15F
125.6
0.0
125.6
(14.4)
111.2
0.0
(12.8)
(0.4)
(1.2)
73.4
0.0
73.4
(23.4)
0.0
0.0
73.4
0.0
0.0
0.0
73.4
89.5
Dec-16F
141.3
0.0
141.3
(15.4)
125.9
0.0
(13.3)
(0.5)
(1.2)
85.1
0.0
85.1
(25.8)
0.0
0.0
85.1
0.0
0.0
0.0
85.1
100.5
Dec-17F
154.2
0.0
154.2
(16.3)
138.0
0.0
(12.3)
(0.5)
(1.2)
97.3
0.0
97.3
(26.7)
0.0
0.0
97.3
0.0
0.0
0.0
97.3
110.5
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
Dec-13A
80
10
9
0
(47)
53
0
(1,149)
0
(1,149)
587
600
0
(31)
1,156
61
(1,095)
(518)
Dec-14A
79
13
(14)
0
10
88
(0)
0
0
(0)
Dec-15F
73
23
24
0
13
133
(0)
(290)
0
(290)
Dec-16F
85
26
1
0
12
124
(0)
(205)
0
(205)
Dec-17F
97
27
1
0
10
135
(0)
0
0
(0)
0
(104)
(14)
(117)
(30)
89
74
0
(89)
265
175
19
(157)
(180)
0
(100)
179
79
(3)
(81)
(107)
0
(99)
(27)
(126)
8
134
108
200
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,756
0
0
1,756
61
0
17
0
78
1
0
8
9
581
32
613
1,212
Dec-14A
1,756
0
0
1,756
31
0
9
0
41
2
0
7
10
583
5
588
1,198
Dec-15F
2,046
0
0
2,046
50
0
9
0
59
2
0
7
9
871
30
901
1,195
Dec-16F
2,251
0
0
2,251
47
0
9
0
56
2
0
7
9
966
30
997
1,302
Dec-17F
2,252
0
0
2,252
55
0
9
0
64
2
0
7
9
966
31
997
1,309
1,212
1,198
1,195
1,302
1,309
Dec-13A
0%
0%
88.6%
0%
N/A
0%
47%
8.51
8.51
6.62
N/A
Dec-14A
129%
130%
89.0%
132%
N/A
0%
113%
4.16
4.16
3.21
4.33%
Dec-15F
8%
8%
88.5%
0%
N/A
0%
122%
6.44
6.44
5.43
3.76%
Dec-16F
12%
13%
89.1%
6%
N/A
0%
118%
6.11
6.11
5.10
3.86%
Dec-17F
9%
10%
89.5%
(6%)
N/A
0%
102%
6.96
6.96
5.96
4.21%
Dec-13A
24.7
N/A
254.0
N/A
N/A
N/A
N/A
Dec-14A
25.3
N/A
256.5
N/A
N/A
N/A
N/A
Dec-15F
25.9
N/A
238.7
N/A
N/A
N/A
N/A
Dec-16F
26.6
N/A
242.3
N/A
N/A
N/A
N/A
Dec-17F
27.3
N/A
245.9
N/A
N/A
N/A
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
201
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$2.26
S$2.56
S$2.56
13.3%
Reuters:
Bloomberg:
Market cap:
PWLR.SI
PREIT SP
US$967.8m
S$1,367m
US$0.59m
S$0.84m
605.0m
57.4%
2.400
108.8
2.300
102.5
2.200
96.3
2.100
10
90.0
Vol m
115.0
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-2.2
2.3
Resilient portfolio
3M
2.3
2.6
PREITs balance sheet remains healthy, with a net gearing of 35.2%. An estimated 78%
of its interest rate exposure is hedged and there are no refinancing requirements till
2017. Additionally, there is still room for inorganic growth given its debt headroom of
S$118m and S$281.4m, which correspond with gearing levels of 40% and 45%
respectively. Management had previously highlighted Malaysia, Australia, Japan and
China properties as potential targets.
Sep-15
Source: Bloomberg
Price performance
2.500
Dec-14
PREITs portfolio remains one of the most resilient among the S-REITs, with a long
weighted lease expiry of 9.39 years and downside protection for 93% of its leases by
gross revenue. While its revenue growth is relatively muted, c.1.05% for the Singapore
hospitals till Aug 16, due to lower inflation, this is compensated by the lower downside
risk.
No change.
Price Close
12M
-7.4
5.4
Management has successfully created value via its recent capital recycling in Dec 14.
The sale, at an exit yield of 5.9%, is 16% and 8% above the assets book values and
independent valuations respectively. Aside from financial gains, the portfolio also
benefited from reduced tenant concentration risks with an improved WALE. At the same
time, PREIT acquired seven other Japan nursing homes at 6.4% yield. This has
unlocked value for unitholders, while the new purchases added to income visibility.
Maintain Add
We maintain our Add call on PREIT, which offers an FY15 dividend yield of 5.9%. We
continue to like its resilient portfolio and managements ability to add value via asset
recycling despite the competitive acquisition landscape in Japan. Further yield accretive
acquisitions could catalyse the stock.
[X]
Financial Summary
Analyst(s)
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
93.7
87.6
98.3
65.05
0.11
(0.5%)
21.52
0.11
4.76%
32.8%
1.63
1.39
6.56%
Dec-14A
100.4
93.8
107.4
69.70
0.11
2.4%
21.02
0.12
5.10%
35.0%
1.71
1.32
6.44%
Dec-15F
109.4
102.0
73.0
80.95
0.12
12.2%
18.74
0.13
5.92%
38.6%
1.70
1.33
7.08%
1.05
Dec-16F
112.2
104.2
74.6
73.50
0.12
2.3%
18.32
0.12
5.38%
38.5%
1.70
1.33
7.26%
1.00
Dec-17F
114.3
106.1
76.4
75.32
0.13
2.4%
17.89
0.12
5.51%
38.5%
1.70
1.33
7.43%
1.01
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
2.3
2.6
Absolute
-2.2
2.3
Major shareholders
Parkway Pantai Limited
12M
5.4
-7.4
% held
35.7
9.9
6.4
1.800
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
39.0%
37.9%
36.8%
35.7%
34.6%
33.4%
32.3%
31.2%
30.1%
29.0%
0.1600
0.1400
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
7.00%
6.13%
5.25%
4.38%
3.50%
2.63%
1.75%
0.88%
0.00%
Dec-13A
93.7
0.0
93.7
(6.1)
87.6
0.0
(9.4)
(2.5)
0.0
75.8
0.0
75.8
(8.1)
0.0
0.0
37.0
104.6
(6.3)
0.0
0.0
98.3
65.1
Dec-14A
100.4
0.0
100.4
(6.6)
93.8
0.0
(10.1)
(2.7)
0.0
81.0
0.0
81.0
(8.2)
0.0
0.0
47.4
120.1
(12.7)
0.0
0.0
107.4
69.7
Dec-15F
109.4
0.0
109.4
(7.4)
102.0
0.0
(9.4)
(2.8)
0.0
89.9
0.0
89.9
(9.3)
0.0
0.0
0.0
80.6
(7.7)
0.0
0.0
73.0
81.0
Dec-16F
112.2
0.0
112.2
(8.0)
104.2
0.0
(9.5)
(2.8)
0.0
91.9
0.0
91.9
(9.3)
0.0
0.0
0.0
82.6
(8.0)
0.0
0.0
74.6
73.5
Dec-17F
114.3
0.0
114.3
(8.2)
106.1
0.0
(9.6)
(2.8)
0.0
93.8
0.0
93.8
(9.4)
0.0
0.0
0.0
84.5
(8.0)
0.0
0.0
76.4
75.3
Dec-13A
104.6
8.1
2.6
(3.6)
(35.3)
76.4
(3.8)
(86.3)
0.0
(90.0)
86.4
0.0
(64.3)
(7.0)
15.2
1.6
(13.6)
65.9
Dec-14A
120.1
8.2
0.5
(4.2)
(58.8)
66.0
(4.2)
8.8
0.0
4.6
115.6
0.0
(69.2)
(7.4)
39.0
109.6
70.6
178.8
Dec-15F
80.6
9.3
(7.6)
(7.7)
0.0
74.7
(3.4)
(86.8)
0.4
(89.7)
86.8
0.0
(81.0)
(9.7)
(3.9)
(18.9)
(14.6)
62.5
Dec-16F
82.6
9.3
0.1
(8.0)
0.0
84.1
(3.4)
0.0
0.4
(3.0)
0.0
0.0
(73.5)
(9.7)
(83.2)
(2.1)
81.5
71.8
Dec-17F
84.5
9.4
(0.1)
(8.0)
0.0
85.7
(3.4)
0.0
0.4
(3.0)
0.0
0.0
(75.3)
(9.7)
(85.0)
(2.3)
83.1
73.4
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
203
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
1,484
0
7
1,491
27
0
10
0
37
15
4
2
21
497
24
521
986
0
Dec-14A
1,501
0
11
1,512
146
0
10
0
157
21
81
1
104
503
27
530
1,035
0
Dec-15F
1,591
0
11
1,602
128
0
11
0
139
14
20
1
36
651
27
678
1,027
0
Dec-16F
1,594
0
11
1,605
125
0
11
0
137
15
20
1
36
651
27
678
1,029
0
Dec-17F
1,597
0
11
1,609
123
0
11
0
135
15
20
1
36
651
27
678
1,030
0
986
1,035
1,027
1,029
1,030
Dec-13A
(0.41%)
(0.01%)
93.5%
4.2%
9.31
6.0%
66%
1.77
1.77
1.30
6.56%
Dec-14A
7.14%
7.05%
93.4%
7.1%
9.81
10.6%
65%
1.52
1.52
1.41
6.72%
Dec-15F
9.03%
8.81%
93.2%
16.1%
9.24
9.5%
111%
3.89
3.89
3.58
4.28%
Dec-16F
2.53%
2.09%
92.8%
(9.2%)
9.45
9.6%
98%
3.80
3.80
3.48
4.29%
Dec-17F
1.89%
1.91%
92.8%
2.5%
9.64
9.5%
99%
3.73
3.73
3.40
4.39%
Dec-13A
N/A
N/A
N/A
2,265
100.0%
1,483.8
N/A
Dec-14A
N/A
N/A
N/A
2,265
100.0%
1,500.6
N/A
Dec-15F
N/A
N/A
N/A
2,265
100.0%
1,590.8
N/A
Dec-16F
N/A
N/A
N/A
2,265
100.0%
1,594.1
N/A
Dec-17F
N/A
N/A
N/A
2,265
100.0%
1,597.5
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
204
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.98
S$1.39
S$1.39
41.5%
Reuters:
Bloomberg:
Market cap:
PERE.SI
PREH SP
US$1,148m
S$1,622m
US$0.16m
S$0.22m
1,265m
21.4%
Price Close
1.400
106.0
1.200
94.3
1.000
82.7
0.800
30
71.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.0
2.5
3M
4.3
4.6
12M
-24.6
-11.8
PREHs properties in Singapore enjoy a high occupancy rate. CHIJMES is 88% preleased of which 77% of its tenants are operational. In addition, Capitol Piazza is over
80% pre-committed and most of the tenants, including a number of new concepts and
new-to-Singapore fashion and F&B names have commenced operations. Rental income
is expected to expand when more of its tenants become operational.
Reiterate Add
We reiterate our Add call with a target price of S$1.39, pegged at a 35% discount to
RNAV. A potential catalyst for the stock is the monetisation of its strata office space in
Singapore.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Jun-14A
19.3
(8.9)
(6.0)
(0.005)
(132%)
NA
0.00%
NA
NA
(202%)
1,147
(0.64%)
Jun-15A
58.6
15.0
22.0
0.001
NA
726.6
0.003
0.34%
134.1
NA
46%
1
0.16%
Jun-16F
87.2
44.0
39.4
0.018
1223%
54.9
0.006
0.61%
65.9
NA
57%
1
1.39%
Jun-17F
117.5
72.5
71.3
0.043
142%
22.7
0.011
1.10%
48.8
NA
73%
1
2.49%
0.72
Jun-18F
204.7
114.8
135.1
0.082
89%
12.0
0.020
2.09%
32.6
NA
78%
1
4.58%
1.06
Powered by
EFA
BY THE NUMBERS
1M
2.5
-2.0
3M
4.6
4.3
12M
P/BV vs ROE
2,500
3.50%
25,000
5,000%
2,000
2.60%
20,000
3,600%
% held
1,500
1.70%
15,000
2,200%
59.2
1,000
0.80%
10,000
800%
-0.10%
5,000
-600%
-11.8
-24.6
500
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-1.00%
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-2,000%
ROE (rhs)
Jun-14A
19.3
13.0
(8.9)
0.0
(8.9)
(0.0)
(0.2)
3.2
(6.0)
0.0
(6.0)
0.1
Jun-15A
58.6
32.3
15.0
0.0
15.0
(17.4)
9.2
8.3
15.0
23.0
38.0
(5.0)
Jun-16F
87.2
68.3
44.0
0.0
44.0
(26.8)
24.3
8.5
50.0
11.6
61.6
(8.1)
Jun-17F
117.5
106.9
72.5
0.0
72.5
(45.5)
66.4
8.7
102.1
0.0
102.1
(13.4)
Jun-18F
204.7
156.1
114.8
0.0
114.8
(60.4)
120.9
8.7
184.0
0.0
184.0
(24.1)
(5.9)
(0.1)
0.0
33.0
(11.0)
0.0
53.5
(14.1)
0.0
88.7
(17.4)
0.0
159.9
(24.8)
0.0
(6.0)
(6.0)
(6.0)
22.0
2.0
2.0
39.4
29.3
29.3
71.3
71.3
71.3
135.1
135.1
135.1
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Jun-14A
(8.9)
0.2
0.9
Jun-15A
15.0
(9.2)
(17.9)
Jun-16F
44.0
(24.3)
(157.2)
Jun-17F
72.5
(66.4)
(157.5)
Jun-18F
114.8
(120.9)
5.3
3.3
(0.1)
(0.1)
(4.6)
(0.5)
(12.5)
(17.6)
(1.4)
(43.5)
(37.0)
(26.0)
(26.9)
(3.3)
(193.9)
(314.3)
(66.4)
(45.6)
(8.2)
(271.5)
(540.7)
(120.9)
(60.5)
(13.4)
(195.7)
(345.1)
0.0
0.5
0.0
(1.3)
(91.1)
0.1
(128.0)
134.7
(45.9)
0.1
(360.2)
490.6
0.0
0.0
(540.7)
675.3
0.0
0.0
(345.1)
524.8
(4.1)
(11.2)
(17.8)
0.0
664.0
0.0
507.0
0.0
0.0
(0.2)
(1.5)
(37.2)
97.5
(18.8)
467.7
206
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
3
0
2
1
0
5
2
2
0
0
4
0
Jun-15A
64
1,139
81
0
0
1,284
2
2,781
60
0
2,843
158
Jun-16F
90
1,713
107
0
0
1,910
2
4,498
90
0
4,589
237
Jun-17F
86
1,713
94
0
0
1,893
2
5,105
90
0
5,196
237
Jun-18F
306
1,713
164
0
0
2,182
2
5,571
90
0
5,662
237
5
0
5
0
261
4
422
1,085
227
8
472
2,055
56
13
307
2,731
131
24
393
3,255
2
2
0
7
1
0
1
57
1,142
0
1,564
1,863
700
2,562
84
2,139
0
2,612
2,827
1,061
3,888
84
2,815
0
3,122
2,889
1,078
3,968
84
3,340
0
3,732
3,009
1,103
4,112
Jun-14A
(77%)
(140%)
(46.1%)
0.00
0.00
(106.0)
0.0%
NA
386.8
25.47
7,924
(3%)
(0.50%)
(0.29%)
Jun-15A
203%
NA
25.6%
(0.71)
1.13
0.9
13.1%
NA
258.3
8.22
1,848
(1308%)
0.60%
1.00%
Jun-16F
49%
194%
50.4%
(1.33)
1.71
1.6
13.1%
35.4%
395.6
2.87
4,710
4%
0.98%
1.43%
Jun-17F
35%
65%
61.7%
(1.74)
1.75
1.6
13.1%
25.0%
312.8
0.00
4,896
4%
1.11%
1.98%
Jun-18F
74%
58%
56.1%
(1.93)
1.82
1.9
13.1%
25.0%
229.9
0.00
704
6%
1.58%
2.95%
Jun-14A
N/A
N/A
N/A
N/A
67.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
59.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
72.6%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
91.0%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
80.9%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
207
Company Note
Singapore
Petra Foods
Current price:
Target price:
Previous target:
Up/downside:
S$2.23
S$1.79
S$1.79
-19.8%
Reuters:
Bloomberg:
Market cap:
PEFO.SI
PETRA SP
US$964.7m
S$1,363m
US$0.31m
S$0.44m
611.2m
37.3%
Quarterly core profit has slumped to its worst since the Asian Crisis.
Management has moved to reclaim its traditional 30% gross margins, by hiking
selling prices to pass on the higher costs. A stable or rising Rp would help greatly.
We have a Reduce rating with target price based on 25x CY17 P/E.
Chief blame lies in the Rps plunge. Inflation rose, impacting consumer sentiment.
Shops thinned out inventory on poor sales. Margins was hit by rising US$ costs
No change.
Price Close
4.00
99.0
3.50
91.0
3.00
83.0
2.50
75.0
2.00
10
67.0
Vol m
4.50
Dec-14
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-10.8
-6.3
Sep-15
Source: Bloomberg
Price performance
3Q gross margins have fallen to 28% vs. a more normal 31-32% usually. Petra initially
resisted passing on higher US$ costs and suffered in the quarter, before it implemented
3-4% price hikes in late August. We expect margins to improve, post-price hikes and
especially as the Rp has rebounded and looks more stable recently. Other costs that
add up were higher SG&A costs, as higher logistics costs and more trade promotion
costs weighed in.
3M
-19.5
-19.2
12M
-39.7
-26.9
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
508.8
91.65
59.31
0.10
16.9%
15.30
0.081
5.14%
8.81
5.33
(54.2%)
3.32
20.4%
Dec-14A
504.0
80.87
48.73
0.08
(20.6%)
19.27
0.075
4.75%
10.72
98.76
(33.0%)
3.25
17.0%
Dec-15F
399.8
37.00
7.98
0.04
(54.4%)
42.28
0.030
1.93%
24.05
NA
(29.9%)
3.84
8.3%
0%
0.62
Dec-16F
441.0
50.51
31.80
0.05
39.4%
30.33
0.034
2.19%
17.48
42.21
(31.0%)
3.64
12.3%
0%
1.04
Dec-17F
520.7
67.79
44.11
0.07
38.7%
21.87
0.048
3.06%
13.09
57.26
(27.1%)
3.38
16.0%
0%
0.96
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-6.3
-19.2
-26.9
Absolute
-10.8
-19.5
Major shareholders
Chuang family
-39.7
% held
50.5
Tiger Global
6.4
5.8
P/BV vs ROE
30.0
900%
25.0
750%
20.0
600%
15.0
450%
10.0
300%
5.0
150%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0%
Growth
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
60%
44%
29%
13%
-2%
-18%
-33%
-49%
-64%
-80%
ROE (rhs)
Dec-13A
508.8
162.8
91.7
(8.7)
82.9
(1.7)
(0.1)
6.9
88.1
(5.2)
82.9
(23.5)
Dec-14A
504.0
160.8
80.9
(9.8)
71.1
(3.1)
0.5
3.6
72.0
(1.9)
70.1
(21.3)
Dec-15F
399.8
117.2
37.0
(8.2)
28.8
(4.1)
0.5
5.7
30.9
(20.1)
10.8
(2.8)
Dec-16F
441.0
131.9
50.5
(8.5)
42.0
(4.1)
0.5
6.0
44.4
0.0
44.4
(12.5)
Dec-17F
520.7
158.8
67.8
(8.8)
59.0
(4.1)
0.5
6.3
61.7
0.0
61.7
(17.6)
59.3
(0.0)
0.0
48.8
(0.0)
0.0
8.0
(0.0)
0.0
31.8
(0.0)
0.0
44.1
(0.0)
0.0
59.3
63.1
63.1
48.7
50.1
50.1
8.0
22.8
22.8
31.8
31.8
31.8
44.1
44.1
44.1
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
91.7
Dec-14A
80.9
Dec-15F
37.0
Dec-16F
50.5
Dec-17F
67.8
32.1
(33.9)
36.0
4.4
(14.7)
(109.2)
(3.3)
(18.5)
(7.3)
(35.4)
0.0
0.0
645.4
610.0
(421.8)
0.0
0.0
(25.6)
5.8
(6.2)
(24.2)
22.2
(29.0)
0.0
0.0
0.0
(29.0)
16.5
0.0
0.0
(38.4)
(2.3)
(8.2)
(2.8)
59.7
(30.0)
0.0
0.0
(38.8)
(68.8)
0.0
0.0
0.0
(13.8)
18.7
(8.2)
(12.5)
52.9
(30.0)
0.0
0.0
0.0
(30.0)
0.0
0.0
0.0
(15.6)
19.5
(8.2)
(17.6)
46.8
(30.0)
0.0
0.0
0.0
(30.0)
0.0
0.0
0.0
(21.9)
0.0
(447.4)
155.4
180.9
604.4
0.0
(21.9)
(28.6)
9.8
(3.6)
0.0
(13.8)
(22.9)
(9.1)
(5.0)
0.0
(15.6)
7.2
22.9
27.0
0.0
(21.9)
(5.0)
16.8
21.0
209
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
196.7
110.8
65.5
0.0
373.0
81.8
0.0
5.0
5.7
92.5
39.0
Dec-14A
172.0
103.1
72.8
0.0
347.8
111.1
0.0
4.9
6.6
122.7
64.8
Dec-15F
149.1
75.8
64.6
0.0
289.5
139.3
0.0
4.9
6.6
150.8
64.8
Dec-16F
156.3
81.4
57.6
0.0
295.3
156.5
0.0
4.9
6.6
168.1
64.8
Dec-17F
151.3
92.4
67.4
0.0
311.1
172.8
0.0
4.9
6.6
184.3
64.8
122.7
0.0
161.7
0.4
85.2
0.0
150.0
9.2
101.1
0.0
165.9
9.2
109.9
0.0
174.7
9.2
121.7
0.0
186.5
9.2
8.1
8.5
5.0
175.2
290.2
0.2
290.4
9.6
18.8
4.3
173.2
297.2
0.1
297.3
9.6
18.8
4.3
189.0
251.0
0.2
251.2
9.6
18.8
4.3
197.8
265.4
0.2
265.6
9.6
18.8
4.3
209.7
285.5
0.2
285.7
Dec-13A
6.5%
8.1%
18.0%
0.26
0.47
50.21
28.4%
57.0%
51.74
66.94
40.25
6.3%
11.4%
7.8%
Dec-14A
(0.9%)
(11.8%)
16.0%
0.16
0.49
22.78
30.4%
69.8%
57.50
73.51
39.40
40.4%
20.0%
11.4%
Dec-15F
(20.7%)
(54.2%)
9.3%
0.12
0.41
7.00
26.0%
49.2%
62.46
88.70
41.62
11.2%
8.2%
6.9%
Dec-16F
10.3%
36.5%
11.5%
0.13
0.43
10.22
28.3%
49.1%
47.79
72.33
40.31
18.3%
12.5%
7.8%
Dec-17F
18.1%
34.2%
13.0%
0.13
0.47
14.36
28.5%
49.6%
46.17
63.05
38.94
24.8%
16.7%
9.9%
Dec-13A
N/A
4.7%
N/A
N/A
N/A
N/A
N/A
11.7%
N/A
N/A
N/A
N/A
Dec-14A
N/A
-1.2%
N/A
N/A
N/A
N/A
N/A
-0.2%
N/A
N/A
N/A
N/A
Dec-15F
N/A
-24.4%
N/A
N/A
N/A
N/A
N/A
-10.7%
N/A
N/A
N/A
N/A
Dec-16F
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
11.0%
N/A
N/A
N/A
N/A
Dec-17F
N/A
19.0%
N/A
N/A
N/A
N/A
N/A
16.0%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)
210
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.72
S$0.84
S$0.84
16.9%
Reuters:
Bloomberg:
Market cap:
QMDT.SI
QNM SP
US$394.9m
S$557.9m
US$0.80m
S$1.12m
778.6m
39.0%
2015 has been a great year for Q&M as it executed its M&A strategy and earnings
flowed through from the China acquisitions in 2H14.
3Q15 showed signs of slowing domestic growth, but earnings growth will likely
remain robust after an active year of acquisitions in 2015.
Inorganic growth remains the theme for Q&M. Upside to our numbers exists as
profit guarantees/targets only form base-case earnings.
Q&M is our top small/mid-cap healthcare pick. Maintain Add with a target price of
S$0.84 (based on 34.5x CY17 P/E, 1 s.d. below average 12m forward).
0.90
203
0.70
163
0.50
123
0.30
80
60
40
20
83
Vol m
1.10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.5
-2.0
3M
0.7
1.0
12M
70.2
83.0
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
71.2
9.09
6.46
0.008
(1.0%)
87.62
0.013
1.82%
52.09
1,597
(42.4%)
10.76
14.4%
Dec-14A
100.3
15.06
8.56
0.012
56.1%
57.81
0.007
1.02%
34.27
462
(4.1%)
6.67
14.2%
Dec-15F
131.0
24.26
13.59
0.015
19.9%
46.16
0.008
1.18%
24.72
10
10.4%
5.58
13.1%
0%
1.12
Dec-16F
146.0
23.85
15.53
0.019
31.7%
37.16
0.010
1.35%
26.04
NA
24.3%
5.19
14.5%
0%
0.92
Dec-17F
161.9
28.05
19.56
0.024
26.0%
29.50
0.012
1.69%
21.77
22
12.0%
4.77
16.8%
0%
0.93
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-2.0
1.0
83.0
Absolute
-6.5
0.7
70.2
Major shareholders
Quan Min Holdings
% held
47.1
Heritas Helios
8.2
4.3
P/BV vs ROE
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
60.0
60.0%
50.0
50.0%
40.0
40.0%
30.0
30.0%
20.0
20.0%
10.0
10.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
ROE (rhs)
Dec-13A
71.2
19.5
9.1
(2.0)
7.1
(0.3)
0.1
0.0
7.0
Dec-14A
100.3
30.2
15.1
(2.8)
12.2
(0.5)
0.0
0.0
11.8
Dec-15F
131.0
42.4
24.3
(4.9)
19.4
(1.4)
0.2
0.0
18.2
Dec-16F
146.0
45.8
23.9
(5.3)
18.5
(3.0)
0.2
0.0
15.7
Dec-17F
161.9
51.0
28.1
(5.2)
22.8
(3.0)
0.2
0.0
20.0
7.0
(0.5)
11.8
(1.3)
18.2
(2.5)
15.7
(2.1)
20.0
(2.7)
6.5
(0.0)
10.5
(1.9)
15.7
(2.7)
13.5
(3.1)
17.3
(3.5)
6.5
5.4
5.4
8.6
8.7
8.7
0.6
13.6
11.8
11.8
5.1
15.5
15.5
15.5
5.8
19.6
19.6
19.6
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
9.09
Dec-14A
15.06
Dec-15F
24.26
Dec-16F
23.85
Dec-17F
28.05
(3.48)
(4.16)
(2.86)
(0.18)
(0.19)
(1.15)
0.26
(0.49)
4.23
(3.43)
(0.46)
0.47
(0.61)
10.30
(17.20)
(0.75)
1.38
(2.49)
19.53
(11.90)
2.03
3.04
(2.15)
26.59
(4.30)
2.73
3.04
(2.74)
30.89
(4.30)
(5.44)
5.22
(3.64)
(0.29)
16.78
(21.57)
0.33
(38.43)
29.23
12.78
(28.85)
14.10
(26.65)
60.00
0.00
(30.00)
0.10
(34.20)
0.00
0.00
0.00
0.10
(4.20)
0.00
0.00
(6.15)
(6.54)
(6.79)
(7.76)
(9.78)
(0.66)
9.68
10.26
0.30
0.22
(0.40)
35.07
6.93
1.09
(28.65)
(1.48)
51.73
44.61
52.88
(8.60)
(3.14)
(10.90)
(18.51)
(7.61)
(10.75)
(3.14)
(12.92)
13.78
26.70
23.56
212
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
28.7
7.7
4.1
1.5
42.1
15.4
3.5
5.5
1.3
25.6
0.2
Dec-14A
35.7
16.3
8.6
6.2
66.9
37.4
0.0
35.3
1.1
73.8
3.7
Dec-15F
80.3
16.2
9.5
6.2
112.2
30.4
0.2
55.3
30.0
115.9
3.7
Dec-16F
61.8
18.0
11.2
6.2
97.2
29.4
0.4
55.3
60.0
145.1
3.7
Dec-17F
75.6
20.0
13.0
6.2
114.7
28.5
0.6
55.3
60.0
144.4
3.7
10.8
0.1
11.1
8.7
21.2
1.0
25.8
28.5
19.0
1.0
23.7
88.5
22.4
1.0
27.1
88.5
25.9
1.0
30.6
88.5
0.0
8.7
1.2
20.9
46.1
0.6
46.7
0.0
28.5
1.3
55.6
76.6
8.4
85.0
0.0
88.5
1.3
113.5
103.5
11.1
114.6
0.0
88.5
1.3
116.8
111.2
14.2
125.5
0.0
88.5
1.3
120.4
121.0
17.7
138.7
Dec-13A
24.7%
30.6%
12.8%
0.029
0.07
19.47
7.0%
122%
34.22
19.83
73.10
40.5%
15.1%
11.6%
Dec-14A
40.9%
65.8%
15.0%
0.005
0.11
23.72
10.8%
66%
43.76
33.19
83.19
49.7%
14.1%
10.5%
Dec-15F
30.6%
61.1%
18.5%
(0.015)
0.13
13.13
13.7%
50%
45.22
37.34
82.71
23.4%
12.0%
9.6%
Dec-16F
11.5%
(1.7%)
16.3%
(0.038)
0.14
5.90
13.7%
50%
42.80
37.78
75.57
14.5%
8.7%
9.2%
Dec-17F
10.9%
17.6%
17.3%
(0.021)
0.15
7.28
13.7%
50%
42.79
39.74
79.48
14.6%
10.2%
10.4%
Dec-13A
N/A
0.3
N/A
N/A
235.6
N/A
N/A
Dec-14A
N/A
0.3
N/A
N/A
322.8
N/A
N/A
Dec-15F
N/A
0.3
N/A
N/A
336.0
N/A
N/A
Dec-16F
N/A
0.3
N/A
N/A
349.2
N/A
N/A
Dec-17F
N/A
0.3
N/A
N/A
362.4
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
No. Of Patient Admissions (m P.a.)
Revenue Per Patient Bed (S$)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load
213
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$4.24
S$4.67
S$4.67
10.2%
Reuters:
Bloomberg:
Market cap:
RAFG.SI
RFMD SP
US$1,725m
S$2,437m
US$1.69m
S$2.37m
574.3m
47.7%
A more measured pace of topline growth and margin pressure as the group
increases headcount for its expansion projects will likely be a drag on earnings.
Maintain Hold with a SOP-based target price of S$4.67. We prefer IHH in the
hospital space.
4.70
124.7
4.20
106.9
3.70
3
89.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.9
3.6
3M
-3.6
-3.3
12M
8.7
21.5
The hospital extension (S$310m cost, ~40% paid) will add 220k sq ft (+73%) of space to
its existing hospital wing. This is expected to underpin topline growth and improve its
hospital margins as the group is better able to allocate facilities and wards across the old
and new wings. Management sees this as the runway for the next 10 years. The
dampener here is waning medical tourism numbers (medical tourists typically account
for 1/3 of total patient load), exacerbated by the weakening ASEAN currencies.
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
341.0
78.3
84.89
0.11
11.3%
38.43
0.050
1.18%
26.48
13.93
(55.1%)
4.97
14.1%
Dec-14A
374.6
85.7
67.64
0.12
4.9%
36.67
0.055
1.30%
26.00
NA
(26.6%)
4.44
12.8%
Dec-15F
405.8
91.3
67.77
0.12
0.0%
36.37
0.055
1.30%
26.11
NA
(9.1%)
4.23
11.9%
0%
0.96
Dec-16F
461.1
103.7
77.41
0.13
16.6%
31.45
0.055
1.30%
23.53
NA
0.8%
3.92
12.9%
0%
0.97
Dec-17F
522.6
118.1
85.84
0.15
10.9%
28.37
0.055
1.30%
20.62
64.20
(0.2%)
3.61
13.2%
0%
0.93
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
3.6
-3.3
Absolute
-0.9
-3.6
Major shareholders
12M
21.5
8.7
% held
38.3
10.0
Aberdeen
5.0
P/BV vs ROE
6.00
18.00%
5.00
15.00%
4.00
12.00%
3.00
9.00%
2.00
6.00%
1.00
3.00%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
60%
49%
38%
26%
15%
4%
-8%
-19%
-30%
ROE (rhs)
Dec-13A
341.0
341.0
78.3
(8.3)
70.0
0.9
0.0
24.3
95.2
Dec-14A
374.6
374.6
85.7
(9.6)
76.1
1.0
0.0
4.2
81.3
Dec-15F
405.8
405.8
91.3
(12.1)
79.2
1.0
0.0
1.4
81.5
Dec-16F
461.1
461.1
103.7
(13.2)
90.5
1.0
0.0
0.0
91.5
Dec-17F
522.6
522.6
118.1
(17.7)
100.4
1.0
0.0
0.0
101.4
95.2
(9.9)
81.3
(13.3)
81.5
(13.5)
91.5
(13.7)
101.4
(15.2)
85.3
(0.4)
68.0
(0.3)
68.1
(0.3)
77.7
(0.3)
86.2
(0.3)
84.9
60.6
60.6
67.6
64.6
64.6
67.8
66.4
66.4
77.4
77.4
77.4
85.8
85.8
85.8
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
78.3
Dec-14A
85.7
Dec-15F
91.3
Dec-16F
103.7
Dec-17F
118.1
4.1
0.3
13.1
(2.2)
3.7
3.0
(0.0)
(10.4)
71.2
(8.2)
4.6
0.0
(10.0)
93.5
(17.7)
1.4
1.0
(13.5)
78.0
(38.0)
0.0
1.0
(13.7)
94.6
(88.0)
0.0
1.0
(15.2)
107.9
(30.0)
119.3
111.2
(15.2)
6.1
(188.3)
(206.0)
1.4
7.8
(100.0)
(138.0)
(0.4)
0.0
(32.0)
(120.0)
0.0
0.0
(40.0)
(70.0)
0.0
0.0
(10.0)
(12.6)
(31.6)
(31.6)
(31.6)
(19.0)
163.4
167.2
182.4
(3.3)
(115.8)
(111.1)
(112.4)
(32.0)
(91.9)
(60.4)
(59.9)
(31.6)
(56.9)
(25.4)
(25.3)
(31.6)
6.3
37.9
38.0
215
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
265.9
44.2
9.1
0.0
319.2
153.7
100.4
0.2
0.0
254.2
4.8
Dec-14A
150.2
37.0
8.5
0.0
195.7
228.2
228.3
0.2
2.7
459.4
6.4
Dec-15F
58.2
44.5
9.8
0.0
112.5
254.1
294.3
0.2
36.7
585.2
6.0
Dec-16F
1.3
50.5
11.1
0.0
62.9
328.8
326.3
0.2
36.7
692.0
6.0
Dec-17F
7.6
57.3
12.6
0.0
77.5
341.1
366.3
0.2
36.7
744.3
6.0
72.7
20.1
97.5
0.0
74.5
24.0
104.9
0.0
81.1
24.0
111.1
0.0
92.1
24.0
122.1
0.0
104.4
24.0
134.4
0.0
0.0
0.0
2.1
99.6
472.5
1.3
473.8
6.9
6.9
3.0
114.8
538.8
1.5
540.3
6.9
6.9
3.0
121.0
575.0
1.8
576.8
6.9
6.9
3.0
132.0
620.8
2.1
622.9
6.9
6.9
3.0
144.3
675.1
2.4
677.5
Dec-13A
9.4%
11.4%
23.0%
0.47
0.85
1,428
10.4%
32.6%
44.10
N/A
N/A
51.0%
15.9%
15.8%
Dec-14A
9.9%
9.6%
22.9%
0.25
0.96
1,312
16.4%
45.9%
39.55
N/A
N/A
55.2%
15.0%
10.9%
Dec-15F
8.3%
6.5%
22.5%
0.09
1.00
1,584
16.5%
46.6%
36.62
N/A
N/A
36.9%
14.1%
10.0%
Dec-16F
13.6%
13.6%
22.5%
(0.01)
1.08
1,810
15.0%
40.8%
37.71
N/A
N/A
31.3%
15.0%
10.6%
Dec-17F
13.3%
13.8%
22.6%
0.00
1.18
2,008
15.0%
36.8%
37.65
N/A
N/A
26.8%
15.4%
10.8%
Dec-13A
N/A
N/A
60.0%
N/A
180.0
N/A
N/A
Dec-14A
N/A
N/A
65.0%
N/A
190.0
N/A
N/A
Dec-15F
N/A
N/A
68.0%
N/A
200.0
N/A
N/A
Dec-16F
N/A
N/A
68.0%
N/A
220.0
N/A
N/A
Dec-17F
N/A
N/A
68.0%
N/A
240.0
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
No. Of Patient Admissions (m P.a.)
Revenue Per Patient Bed (S$)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load
216
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.99
S$1.06
S$1.06
7.6%
Reuters:
Bloomberg:
Market cap:
RELI.SI
RHT SP
US$556.3m
S$785.9m
US$0.51m
S$0.72m
790.0m
72.0%
110.7
0.900
105.1
0.800
99.6
0.700
8
6
4
2
94.0
Vol m
116.2
1.000
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1.100
Dec-14
In 2QFY16, portfolio occupancy averaged a higher 80% (vs. 74% a year ago) while
ARPOB grew 2.2% yoy. At the same time, the number of operational bed capacity rose
3.7% to 2,644. This helped to underpin revenue growth of 10% to S$35.6m while net
service fee and hospital income improved a better 6.5% yoy. At the bottomline,
distributable income rose a higher 8.8% yoy, thanks to a more favourable Rs/S$
exchange rate of 50.27.
No change.
Price Close
1M
-4.8
-0.3
3M
7.1
7.4
12M
-1.0
11.8
Maintain Hold
We like RHTs growth profile and healthy balance sheet with a gearing of 23.9%
(estimated including the latest Mohali acquisition). However, its projected FY16 DPU
yield of 7.9% is in line with the S-REIT average. Hence, we maintain our Hold rating with
a DDM-based target price of S$1.06.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Mar-14A
108.5
77.4
41.47
46.69
0.053
NA
18.49
0.082
8.31%
6.7%
0.89
1.10
5.92%
Mar-15A
136.4
92.2
37.42
58.17
0.052
(1.7%)
18.81
0.073
7.43%
11.2%
0.97
1.02
5.63%
Mar-16F
140.1
94.7
45.63
62.12
0.057
9.4%
17.19
0.078
7.92%
15.9%
0.95
1.04
5.98%
0.99
Mar-17F
165.8
112.1
59.02
70.37
0.074
29.0%
13.34
0.088
8.94%
16.3%
0.93
1.05
7.85%
1.00
Mar-18F
180.7
122.1
66.92
78.35
0.083
13.0%
11.80
0.093
9.43%
16.3%
0.92
1.07
8.98%
0.97
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
-0.3
7.4
Absolute
-4.8
7.1
Major shareholders
Fortis Healthcare
Mitsubishi UFJ Financial Group
12M
11.8
-1.0
% held
28.0
6.2
1.200
18.0%
1.000
15.0%
0.800
12.0%
0.600
9.0%
0.400
6.0%
0.200
3.0%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
0.100
0.090
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
DPS (lhs)
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Mar-14A
108.5
0.0
108.5
(31.2)
77.4
0.0
(5.2)
(0.9)
0.0
71.2
(12.7)
58.5
(1.6)
Mar-15A
136.4
0.0
136.4
(44.2)
92.2
0.0
(6.7)
(3.4)
0.0
82.2
(13.9)
68.3
(5.4)
Mar-16F
140.1
0.0
140.1
(45.4)
94.7
0.0
(6.2)
(1.3)
0.0
87.2
(13.4)
73.8
(8.4)
Mar-17F
165.8
0.0
165.8
(53.7)
112.1
0.0
(6.7)
(1.3)
0.0
104.1
(13.4)
90.7
(8.2)
Mar-18F
180.7
0.0
180.7
(58.5)
122.1
0.0
(6.9)
(1.3)
0.0
114.0
(13.4)
100.6
(8.1)
0.0
(0.8)
56.2
(14.7)
0.0
0.0
41.5
46.7
0.0
(6.2)
56.7
(19.3)
0.0
0.0
37.4
58.2
0.0
0.0
65.4
(19.8)
0.0
0.0
45.6
62.1
0.0
0.0
82.5
(23.4)
0.0
0.0
59.0
70.4
0.0
0.0
92.5
(25.5)
0.0
0.0
66.9
78.3
Mar-14A
56.16
14.26
(19.32)
(19.35)
3.66
35.42
0.00
(4.60)
8.60
4.00
(0.89)
0.00
(43.18)
(1.97)
(46.04)
(6.62)
39.42
36.56
Mar-15A
56.72
19.28
(2.69)
(20.45)
2.84
55.69
0.00
(68.55)
5.37
(63.18)
58.49
0.00
(52.24)
(3.09)
3.16
(4.33)
(7.49)
47.91
Mar-16F
65.44
21.74
9.26
(19.82)
0.00
76.63
Mar-17F
82.47
21.67
2.97
(23.45)
0.00
83.67
Mar-18F
92.47
21.52
1.72
(25.55)
0.00
90.15
(55.54)
0.08
(55.46)
61.89
3.37
(62.12)
(8.46)
(5.32)
15.86
21.17
74.61
(3.86)
0.40
(3.46)
3.96
2.67
(70.37)
(8.64)
(72.38)
7.83
80.21
75.53
0.00
0.56
0.56
0.10
2.75
(74.43)
(8.64)
(80.22)
10.49
90.71
82.17
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
218
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
0
136
723
858
8
0
22
70
100
6
3
79
87
62
105
166
705
0
0
705
Mar-15A
0
141
885
1,026
4
0
25
69
98
7
62
88
158
64
133
197
769
0
0
769
Mar-16F
0
141
927
1,068
20
0
25
69
114
16
8
88
113
180
133
313
756
0
0
756
Mar-17F
0
141
918
1,058
28
0
25
69
122
19
9
88
116
183
133
317
747
0
0
747
Mar-18F
0
141
904
1,045
38
0
25
69
132
21
9
88
118
183
133
317
743
0
0
743
Mar-14A
119%
115%
71.3%
131%
22.99
26.2%
113%
1.15
1.15
0.09
4.32%
Mar-15A
26%
19%
67.6%
(11%)
11.23
34.0%
155%
0.62
0.62
0.03
3.59%
Mar-16F
3%
3%
67.6%
7%
8.73
30.3%
136%
1.01
1.01
0.18
3.96%
Mar-17F
18%
18%
67.6%
13%
10.50
28.4%
119%
1.05
1.05
0.24
5.00%
Mar-18F
9%
9%
67.6%
5%
11.64
27.6%
117%
1.12
1.12
0.33
5.68%
Mar-14A
N/A
N/A
N/A
N/A
77.3%
0.7
N/A
Mar-15A
N/A
N/A
N/A
N/A
75.3%
0.8
N/A
Mar-16F
N/A
N/A
N/A
N/A
75.1%
0.9
N/A
Mar-17F
N/A
N/A
N/A
N/A
73.1%
0.9
N/A
Mar-18F
N/A
N/A
N/A
N/A
74.1%
0.8
N/A
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
219
Company Note
Singapore
Riverstone Holdings
Expansion is on track
Current price:
Target price:
Previous target:
Up/downside:
S$2.20
S$2.15
S$2.15
-2.4%
Reuters:
Bloomberg:
Market cap:
RVHL.SI
RSTON SP
US$577.0m
S$815.2m
US$0.39m
S$0.55m
370.5m
33.2%
The phase II expansions 1bn pieces p.a. has been fully taken up by new customer
orders and another 1bn pieces from phase III are slated to come on stream in 3Q16.
Price Close
Riverstones phase II capacity expansion of 1bn pieces was completed in Nov 15,
raising the groups total production capacity to 5.2bn pieces p.a. (FY14: 4.2bn pieces).
We understand that the phase II capacity has been fully taken up by new customer
orders. There have also been indications of commitment for phase III capacity of another
1bn pieces which management expects to complete by 3Q16.
330
2.20
268
1.70
205
1.20
143
0.70
4
3
2
1
80
We expect revenue growth to be mainly led by the more generic healthcare glove
segment. In terms of dollar value, cleanroom gloves formed c.40% of sales in 3Q15
while healthcare gloves comprised c.60% of sales in the same period (FY14: c.50%
each). We expect c.10% yoy sales growth for cleanroom gloves and 17-27% yoy growth
for healthcare gloves in FY16-18, driven by increasing demand and supported by
expanded capacity.
Vol m
2.70
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.8
7.3
3M
33.3
33.6
12M
128.0
140.8
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
357.9
87.0
54.0
0.14
17.1%
47.83
0.07
1.02%
26.31
52.57
(35.3%)
7.62
17.8%
Dec-14A
399.3
95.4
66.6
0.16
9.3%
42.69
0.07
1.04%
24.94
NA
(21.4%)
6.62
16.6%
Dec-15F
577.9
161.0
112.5
0.28
77.0%
24.12
0.15
2.25%
14.60
55.78
(23.1%)
5.24
24.3%
0%
0.96
Dec-16F
714.3
195.0
135.1
0.33
21.5%
19.85
0.17
2.49%
11.84
37.17
(25.8%)
4.25
23.6%
0%
0.99
Dec-17F
822.3
216.2
147.8
0.37
10.3%
18.00
0.18
2.72%
10.59
28.13
(25.8%)
3.73
22.0%
0%
0.95
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
7.3
2.8
3M
33.6
33.3
12M
140.8
128.0
% held
50.8
11.7
4.0
P/BV vs ROE
6.00
30.0%
25.0
100%
5.00
25.0%
20.0
72%
4.00
20.0%
15.0
44%
3.00
15.0%
2.00
10.0%
10.0
16%
1.00
5.0%
5.0
-12%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-40%
ROE (rhs)
Dec-13A
357.9
97.8
87.0
(19.0)
68.0
0.7
0.0
0.0
68.6
Dec-14A
399.3
108.9
95.4
(19.4)
76.0
0.8
0.0
0.0
76.8
Dec-15F
577.9
179.1
161.0
(25.7)
135.3
0.6
0.0
0.0
135.9
Dec-16F
714.3
213.5
195.0
(30.5)
164.5
0.6
0.0
0.0
165.2
Dec-17F
822.3
234.1
216.2
(34.8)
181.4
0.7
0.0
0.0
182.1
68.6
(14.6)
76.8
(10.2)
135.9
(23.5)
165.2
(30.0)
182.1
(34.3)
54.0
66.6
112.5
135.1
147.8
54.0
51.5
51.5
66.6
57.6
57.6
112.5
102.0
102.0
135.1
123.9
123.9
147.8
136.6
136.6
Cash Flow
(RMm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
87.0
Dec-14A
95.4
Dec-15F
161.0
Dec-16F
195.0
Dec-17F
216.2
(2.1)
(25.2)
(19.1)
(24.5)
(20.2)
1.0
0.0
0.7
(10.3)
76.2
(29.5)
2.3
0.0
0.8
(14.8)
58.5
(73.7)
0.0
0.0
0.6
(23.5)
119.1
(75.0)
0.0
0.0
0.6
(30.0)
141.2
(75.0)
0.0
0.0
0.7
(34.3)
162.4
(75.0)
0.1
(29.4)
0.0
31.0
(0.7)
(22.5)
0.2
(73.5)
0.0
0.0
0.0
(25.4)
0.0
(75.0)
0.0
0.0
0.0
(25.4)
0.0
(75.0)
0.0
0.0
0.0
(25.8)
0.0
(75.0)
0.0
0.0
0.0
(67.8)
0.0
7.9
54.7
46.8
46.8
1.0
(24.4)
(39.4)
(15.0)
(15.0)
0.0
(25.4)
18.7
44.1
44.1
0.0
(25.8)
40.4
66.2
66.2
0.0
(67.8)
19.7
87.4
87.4
221
BY THE NUMBERS
Balance Sheet
(RMm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
114.0
64.1
35.7
0.9
214.7
153.4
0.0
0.0
12.4
165.8
0.0
Dec-14A
79.4
88.2
42.1
0.3
210.1
227.6
0.0
0.0
0.0
227.6
0.0
Dec-15F
108.4
115.6
54.6
0.3
279.0
276.9
0.0
0.0
0.0
276.9
0.0
Dec-16F
149.6
142.9
68.6
0.3
361.4
321.4
0.0
0.0
0.0
321.4
0.0
Dec-17F
170.1
164.5
80.6
0.3
415.5
361.6
0.0
0.0
0.0
361.6
0.0
39.3
5.6
44.9
0.0
50.4
5.7
56.1
0.0
71.2
5.7
76.9
0.0
88.1
5.7
93.7
0.0
101.4
5.7
107.1
0.0
0.0
0.0
13.0
57.8
322.7
0.0
322.7
0.0
0.0
10.0
66.1
371.5
0.0
371.6
0.0
0.0
10.0
86.9
468.9
0.0
468.9
0.0
0.0
10.0
103.7
579.1
0.0
579.1
0.0
0.0
10.0
117.0
660.0
0.0
660.0
Dec-13A
15.5%
35.8%
24.3%
0.31
0.87
N/A
21.3%
46.7%
61.49
46.35
61.18
27.8%
22.8%
15.3%
Dec-14A
11.6%
9.7%
23.9%
0.21
1.00
N/A
13.2%
38.4%
68.21
48.87
56.37
28.5%
21.4%
16.1%
Dec-15F
44.7%
68.8%
27.9%
0.29
1.27
N/A
17.3%
49.1%
62.39
44.28
55.70
37.2%
31.6%
22.5%
Dec-16F
23.6%
21.1%
27.3%
0.40
1.56
N/A
18.2%
45.3%
63.49
45.02
58.21
36.9%
30.9%
21.7%
Dec-17F
15.1%
10.9%
26.3%
0.46
1.78
N/A
18.8%
45.2%
65.41
46.29
58.78
34.3%
28.9%
20.2%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
N/A
21.7%
N/A
N/A
34.1%
N/A
N/A
N/A
Dec-16F
N/A
10.0%
N/A
N/A
27.3%
N/A
N/A
N/A
Dec-17F
N/A
10.0%
N/A
N/A
21.2%
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (RM)
BVPS (RM)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
Unit raw mat ASP (%chg,main)
Unit raw mat ASP (%chg,2ndary)
222
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.34
S$1.77
S$1.77
32.8%
Reuters:
Bloomberg:
Market cap:
SARI.SI
SARINE SP
US$329.8m
S$465.9m
US$0.33m
S$0.47m
349.1m
58.5%
No change.
On the demand front, Sarine sees no indications of lower consumer demand for
diamond jewellery from any significant market. The company expects normalcy to return
in 2016 given that polished diamond inventories are expected to be whittled off by early
2016 and that rough diamond pricing will ease further.
Price Close
3.10
105.0
2.60
92.5
2.10
80.0
1.60
67.5
1.10
6
55.0
Sarine Profile, targeted at diamond retailers, has commenced trials with leading brick
and mortar and online retailers in the US and the Far East. Targeted at smaller stones,
Meteor has also been commercially launched. Targeted at non-diamond gemstones,
Allegro will be launched at a service centre in India, with additional service centres in
Israel, South America and Thailand slated for 2016.
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.5
-8.0
3M
1.5
1.8
12M
-51.5
-38.7
Sarine remains entrenched as the market leader. The company has no new
developments to report on its competitors and the current industry conditions do not
favour new competing product introductions and launches. At the same time, Sarine has
the most complete and compelling solutions for the industry.
Maintain Hold
The companys willingness to exercise some flexibility in its operating expenses and
guidance of lower R&D expense into FY16 will help improve profitability. Our target price
of S$1.77 is perched on 12.5x CY17 earnings.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
77.67
24.88
0.071
15%
13.6
4.18
0.057
6.08%
8.28
19.58
(49.1%)
5.07
39.4%
Dec-14A
87.70
27.14
0.078
10%
12.3
3.75
0.050
5.29%
7.50
18.54
(57.1%)
4.13
36.9%
Dec-15F
46.83
1.90
0.005
(93%)
173.4
7.04
0.030
3.17%
33.16
21.84
(70.5%)
4.64
2.5%
0%
Dec-16F
80.81
25.44
0.073
1240%
13.0
4.08
0.040
4.23%
7.60
15.79
(69.1%)
3.99
33.1%
0%
Dec-17F
97.11
34.12
0.098
34%
9.7
3.40
0.040
4.23%
5.54
10.43
(72.7%)
3.21
36.8%
0%
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-8.0
1.8
-38.7
Absolute
-12.5
1.5
Major shareholders
-51.5
% held
Mondrian Investments
9.2
FIL Limited
8.8
Harel Ehud
7.4
P/BV vs ROE
12.0
45.0%
10.0
37.5%
8.0
30.0%
6.0
22.5%
4.0
15.0%
2.0
7.5%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
400
350
300
250
200
150
100
50
0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
1,400%
1,200%
1,000%
800%
600%
400%
200%
0%
-200%
ROE (rhs)
(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-13A
77.67
55.53
35.20
(4.41)
30.79
0.02
0.00
0.00
30.81
Dec-14A
87.70
61.88
37.77
(4.91)
32.86
(0.21)
0.00
0.00
32.65
Dec-15F
46.83
30.18
8.43
(6.25)
2.18
0.10
0.00
0.00
2.28
Dec-16F
80.81
59.48
35.88
(5.41)
30.48
0.10
0.00
0.00
30.58
Dec-17F
97.11
70.91
46.01
(5.10)
40.91
0.10
0.00
0.00
41.01
30.81
(5.93)
32.65
(5.51)
2.28
(0.38)
30.58
(5.14)
41.01
(6.89)
24.88
0.00
27.14
0.00
1.90
0.00
25.44
0.00
34.12
0.00
24.88
24.30
24.30
27.14
27.14
27.14
1.90
1.90
1.90
25.44
25.44
25.44
34.12
34.12
34.12
Cash Flow
Limited capex
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
35.20
Dec-14A
37.77
Dec-15F
8.43
Dec-16F
35.88
Dec-17F
46.01
(8.85)
(1.16)
10.49
(5.78)
(3.41)
1.41
0.23
0.79
(7.45)
21.33
(7.30)
2.80
(0.14)
0.08
(4.96)
34.38
(3.14)
0.00
(0.20)
0.10
0.44
19.26
(1.50)
0.00
0.00
0.10
(5.14)
25.06
(1.50)
0.00
0.00
0.10
(6.89)
35.81
(1.50)
4.10
(1.25)
(4.46)
(12.10)
(1.06)
(16.31)
0.00
(2.69)
(4.19)
0.00
(2.69)
(4.19)
0.00
(2.69)
(4.19)
1.45
0.97
0.00
0.00
0.00
(18.10)
(17.40)
(10.47)
(13.96)
(13.96)
1.48
(15.17)
1.71
16.88
16.88
(1.03)
(17.47)
0.61
18.08
18.40
0.00
(10.47)
4.61
15.07
15.07
0.00
(13.96)
6.92
20.87
20.87
0.00
(13.96)
17.67
31.62
31.62
224
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
33.1
19.6
8.5
0.0
61.2
10.7
0.0
8.4
1.4
20.4
Dec-14A
45.5
16.0
10.1
0.0
71.6
11.5
0.0
6.8
2.2
20.5
Dec-15F
50.1
8.4
5.9
0.0
64.4
9.7
0.0
6.8
2.2
18.6
Dec-16F
57.0
13.1
7.6
0.0
77.7
8.5
0.0
6.8
2.2
17.4
Dec-17F
74.7
15.3
9.3
0.0
99.3
7.5
0.0
6.8
2.2
16.5
13.1
0.8
13.9
11.7
0.6
12.3
10.4
1.4
11.9
11.0
1.4
12.4
11.5
1.4
12.9
0.3
0.3
0.0
14.3
67.3
0.2
0.2
0.0
12.4
79.6
0.2
0.2
0.0
12.0
71.1
0.2
0.2
0.0
12.5
82.5
0.2
0.2
0.0
13.1
102.7
67.3
79.6
71.1
82.5
102.7
Dec-13A
21.8%
26%
45.3%
0.09
0.19
N/A
19.2%
83%
54.52
126.8
44.09
116%
49.9%
33.3%
Dec-14A
12.9%
7%
43.1%
0.13
0.23
N/A
16.9%
64%
61.02
131.6
43.61
71%
44.7%
31.4%
Dec-15F
(46.6%)
(78%)
18.0%
0.14
0.20
N/A
16.8%
551%
77.55
175.4
52.10
5%
2.9%
2.1%
Dec-16F
72.5%
326%
44.4%
0.16
0.24
N/A
16.8%
55%
39.60
116.1
37.49
108%
39.7%
28.5%
Dec-17F
20.2%
28%
47.4%
0.21
0.29
N/A
16.8%
41%
45.80
117.9
38.10
119%
44.2%
32.3%
Dec-13A
N/A
45.8%
N/A
N/A
N/A
12.2%
N/A
N/A
Dec-14A
N/A
35.7%
N/A
N/A
N/A
6.5%
N/A
N/A
Dec-15F
N/A
6.3%
N/A
N/A
N/A
-51.3%
N/A
N/A
Dec-16F
N/A
24.8%
N/A
N/A
N/A
50.0%
N/A
N/A
Dec-17F
N/A
19.8%
N/A
N/A
N/A
10.0%
N/A
N/A
Key Ratios
Revenue growth to resume once
industry conditions normalise
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Growth drive by Galaxy
ASP Change (%, Main Product)
Unit sales growth (%, main prod)
No. Of Lines (main Product)
Rev per line (US$, main prod)
ASP chg (%, 2ndary prod)
Unit sales grth (%, 2ndary prod)
No. Of Lines (secondary Product)
Rev per line (US$, 2ndary prod)
225
Company Note
Singapore
SATS Ltd
As good as it gets
Current price:
Target price:
Previous target:
Up/downside:
S$3.80
S$3.98
S$3.98
4.7%
Reuters:
Bloomberg:
Market cap:
SATS.SI
SATS SP
US$2,989m
S$4,222m
US$5.46m
S$7.69m
1,107m
56.0%
135.8
3.20
113.9
2.70
8
6
4
2
92.0
Vol m
157.6
3.70
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.5
0.0
4.20
Dec-14
The effects of sharp qoq margin expansion may not repeat post de-consolidating
BRFs costs to JV. EBIT margin is likely, in our view, to be capped at 12-13%.
No change
Price Close
3M
2.7
3.0
12M
30.6
43.4
Maintain Hold
The stock has outperformed by 32% in the past 12 months, and we believe the positives
from its volume growth are in the price. Cost transfer to the BRF JV may be a one-off
benefit, and further improvements from its automation process will be gradual. We
maintain our Hold recommendation. Potential re-rating catalysts include earningsaccretive M&As and stronger-than-expected pick up in aviation travel.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
1,787
248.0
180.4
0.16
(2.6%)
24.15
0.13
3.42%
16.54
46.29
(15.0%)
2.99
12.8%
Mar-15A
1,753
246.2
195.7
0.18
10.5%
21.92
0.14
3.69%
16.15
15.81
(20.1%)
2.92
13.8%
Mar-16F
1,774
294.4
226.3
0.20
14.5%
19.08
0.16
4.31%
13.54
29.81
(18.6%)
2.78
15.3%
0%
1.02
Mar-17F
1,851
307.2
235.3
0.21
4.0%
18.36
0.17
4.48%
13.00
24.26
(17.7%)
2.68
15.3%
0%
0.99
Mar-18F
1,954
324.3
247.7
0.22
5.3%
17.44
0.18
4.71%
12.31
22.50
(17.3%)
2.59
15.5%
0%
0.99
Powered by
EFA
BY THE NUMBERS
1M
0.0
-4.5
3M
3.0
2.7
12M
43.4
30.6
P/BV vs ROE
3.50
18.00%
3.00
15.43%
2.50
12.86%
25.0
25.0%
20.0
17.0%
9.0%
% held
2.00
10.29%
15.0
44.0
1.50
7.71%
10.0
1.0%
1.00
5.14%
5.0
-7.0%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-15.0%
0.50
2.57%
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
ROE (rhs)
Mar-14A
1,787
619
248
(77)
171
0
47
0
218
(3)
216
(33)
Mar-15A
1,753
603
246
(68)
178
1
48
0
227
(2)
225
(34)
Mar-16F
1,774
623
294
(72)
222
1
52
0
275
0
275
(47)
Mar-17F
1,851
650
307
(77)
230
1
55
0
286
0
286
(49)
Mar-18F
1,954
686
324
(83)
242
1
58
0
301
0
301
(51)
182
(2)
0
191
5
0
228
(2)
0
237
(2)
0
250
(2)
0
180
180
180
196
198
198
226
226
226
235
235
235
248
248
248
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
248.0
(47.2)
35.0
Mar-15A
246.2
(48.1)
21.3
Mar-16F
294.4
(51.9)
(34.5)
Mar-17F
307.2
(55.1)
(2.1)
Mar-18F
324.3
(58.4)
(2.8)
50.5
(2.9)
(38.5)
244.9
(57.1)
0.0
(117.7)
27.8
(147.0)
(4.0)
5.8
(1.0)
34.4
0.5
(35.3)
218.0
(61.3)
27.9
0.0
89.9
56.5
(0.5)
0.3
0.2
52.8
(0.2)
(46.7)
214.2
(70.0)
0.0
0.0
0.7
(69.3)
0.0
(0.0)
56.0
(0.1)
(48.6)
257.4
(80.0)
0.0
0.0
0.7
(79.3)
0.0
0.0
59.3
(0.0)
(51.1)
271.3
(80.0)
0.0
0.0
0.7
(79.3)
0.0
0.0
(169.3)
(146.5)
(155.0)
(181.1)
(188.2)
4.9
(162.6)
(64.7)
93.9
100.8
(52.9)
(199.6)
74.9
274.0
275.6
0.0
(155.0)
(10.1)
144.9
146.5
0.0
(181.1)
(3.0)
178.1
179.6
0.0
(188.2)
3.8
192.0
193.6
227
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
341
288
46
50
725
568
0
185
542
1,295
18
Mar-15A
411
283
19
81
793
552
0
166
510
1,227
16
Mar-16F
401
286
53
81
820
549
0
166
562
1,276
16
Mar-17F
398
298
56
81
832
551
0
166
617
1,333
16
Mar-18F
401
315
59
81
855
547
0
166
675
1,388
16
267
45
330
97
287
43
346
90
291
43
349
90
303
43
362
90
320
43
379
90
79
176
0
505
1,417
98
1,514
67
156
0
502
1,441
77
1,518
67
156
0
505
1,512
78
1,591
67
156
0
518
1,567
80
1,647
67
156
0
535
1,626
82
1,708
Mar-14A
(1.78%)
(13.0%)
13.9%
0.20
1.27
58.9
15.5%
79.1%
60.08
15.50
78.78
10.8%
10.7%
9.2%
Mar-15A
(1.87%)
(0.7%)
14.0%
0.28
1.30
148.3
15.2%
78.2%
59.34
10.32
88.02
10.8%
11.1%
9.5%
Mar-16F
1.17%
19.6%
16.6%
0.27
1.37
140.8
17.0%
80.0%
58.65
11.43
91.88
14.4%
13.5%
11.1%
Mar-17F
4.34%
4.3%
16.6%
0.26
1.42
145.7
17.0%
80.0%
57.61
16.52
90.25
14.0%
13.5%
11.1%
Mar-18F
5.55%
5.6%
16.6%
0.27
1.47
153.0
17.0%
80.0%
57.29
16.43
89.74
14.1%
13.7%
11.3%
Mar-14A
N/A
N/A
9.0%
N/A
N/A
N/A
-6.8%
Mar-15A
N/A
N/A
-6.0%
N/A
N/A
N/A
1.3%
Mar-16F
N/A
N/A
3.0%
N/A
N/A
N/A
5.6%
Mar-17F
N/A
N/A
4.5%
N/A
N/A
N/A
7.0%
Mar-18F
N/A
N/A
5.0%
N/A
N/A
N/A
7.0%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
(S$)
Int'l Passenger Traffic Growth (%)
Domestic Pax Traffic Growth (%)
International Flight Traffic Growth (%)
Domestic Flight Traffic Growth (%)
Int'l Pax Service Charge
Dom Pax Serv Charge
Unit Meals Produced (% Change)
228
Company Note
Singapore
Sembcorp Industries
Current price:
Target price:
Previous target:
Up/downside:
S$3.03
S$3.85
S$3.85
26.9%
Reuters:
Bloomberg:
Market cap:
SCIL.SI
SCI SP
US$3,829m
S$5,410m
US$11.33m
S$15.96m
1,784m
50.0%
India will dominate 20% of utilities earnings by 2017 of our forecast with two coalfired plants.
We maintain our Add rating and target price based on SOP valuations. Re-rating
catalysts could come from stronger-than-expected profitability in India and Singapore.
NCCPP on track
The second power plant, NCC Power Projects Limited (NCCPP), is a 1,320MW unit that
will achieve phase 1 completion by 2H16. Given the learning curve encountered in
TPCIL, we deem the targeted completion for NCCPP achievable. SCI is bidding for a
500MW long-term PPA in Andhra Pradesh, securing baseload ahead of the completion
of NCCPPs first unit.
5.30
116.0
4.80
109.0
4.30
102.0
3.80
95.0
3.30
88.0
2.80
20
15
10
5
81.0
Vol m
Dec-14
We expect spark spread to remain stable in 2016 despite a lower vesting contract level
of 20%, as gencos may behave rationally to preserve cash profits. We see potential for
earnings upside in FY16-17, as we have factored in wider losses of S$7m-8m
losses/quarter. However, pending the ongoing restructuring of JAC, there might be a
need for further provision for doubtful debts in 4Q15 and 1Q16.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-13.4
-8.9
3M
-11.2
-10.9
Excluding SMMs contribution to SCIs SOP valuation, its utilities business is trading at
an implied 6x CY17 P/E, below its historical average of 7x forward. It is also trading at
0.6x P/BV or -2 s.d of its historical average, suggesting that market is discounting the
utilities for the potential share price overhang from SMM.
12M
-26.8
-14.0
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
10,798
1,463
820.4
0.46
8.9%
6.56
0.17
5.67%
3.06
7.9
(5.5%)
1.03
16.9%
Dec-14A
10,895
1,436
801.1
0.45
(3.6%)
6.76
0.16
5.31%
5.62
453.1
42.5%
0.96
14.8%
Dec-15F
8,828
1,194
922.5
0.30
(31.6%)
9.95
0.16
5.25%
7.66
NA
50.2%
0.87
9.2%
1.47
Dec-16F
10,037
1,532
626.0
0.35
14.2%
8.71
0.13
4.13%
6.25
8.8
48.3%
0.81
9.7%
0.95
Dec-17F
10,562
1,697
704.0
0.39
12.5%
7.75
0.14
4.65%
5.66
5.6
41.9%
0.76
10.2%
1.03
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
-8.9
-10.9
Absolute
-13.4
-11.2
Major shareholders
Temasek Holdings
12M
-14.0
-26.8
% held
49.5
P/BV vs ROE
3.00
25.0%
2.50
20.8%
2.00
16.7%
1.50
12.5%
1.00
8.3%
0.50
4.2%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
30%
21%
12%
3%
-6%
-14%
-23%
-32%
-41%
-50%
ROE (rhs)
Dec-13A
10,798
1,287
1,463
(303)
1,160
(101)
155
0
1,214
0
1,214
(117)
Dec-14A
10,895
1,415
1,436
(297)
1,139
(51)
158
0
1,246
0
1,246
(162)
Dec-15F
8,828
1,022
1,194
(357)
837
(94)
106
0
849
422
1,271
(145)
Dec-16F
10,037
1,360
1,532
(383)
1,149
(111)
120
0
1,158
0
1,158
(195)
Dec-17F
10,562
1,520
1,697
(399)
1,298
(124)
127
0
1,300
0
1,300
(216)
1,097
(277)
0
1,084
(283)
0
1,127
(204)
0
963
(337)
0
1,084
(380)
0
820
820
820
801
801
801
923
548
548
626
626
626
704
704
704
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
1,463
141
Dec-14A
1,436
Dec-15F
1,194
Dec-16F
1,532
Dec-17F
1,697
(1,414)
(869)
(206)
(89)
(111)
(195)
1,020
(1,000)
0
0
0
(1,000)
600
0
0
(225)
(124)
(216)
1,267
(800)
0
0
0
(800)
500
0
0
(253)
207
69
(12)
(125)
1,743
(1,189)
41
(296)
(9)
(1,453)
392
3
(49)
(268)
65
59
(119)
27
(1,306)
0
(249)
(31)
(1,587)
1,571
4
(32)
(393)
(94)
(145)
86
(1,200)
0
0
0
(1,200)
900
0
0
(286)
(109)
(31)
260
683
397
(186)
963
(596)
12
(1,497)
0
614
(500)
(214)
(1,012)
0
375
395
620
141
0
247
714
967
602
230
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
2,256
1,140
2,241
53
5,689
5,127
2,217
308
412
8,064
414
Dec-14A
1,661
1,200
3,205
64
6,130
7,725
2,413
391
517
11,046
1,086
Dec-15F
1,584
1,236
3,531
64
6,415
8,568
2,519
391
517
11,995
1,086
Dec-16F
1,979
1,405
4,015
64
7,462
9,186
2,639
391
517
12,733
1,086
Dec-17F
2,693
1,479
4,225
64
8,460
9,586
2,766
391
517
13,260
1,086
4,140
347
4,902
1,485
3,774
497
5,357
3,649
3,266
497
4,850
4,549
3,714
497
5,297
5,149
3,908
497
5,491
5,649
364
1,849
473
7,224
5,230
1,300
6,530
419
4,068
519
9,944
5,616
1,616
7,232
419
4,968
519
10,336
6,253
1,820
8,073
419
5,568
519
11,384
6,653
2,158
8,811
419
6,068
519
12,078
7,104
2,538
9,642
Dec-13A
6.0%
5.7%
13.6%
0.20
2.95
9.84
9.6%
37.2%
39.14
79.2
106.0
19.1%
13.7%
8.87%
Dec-14A
0.9%
(1.9%)
13.2%
(1.72)
3.14
16.24
13.0%
36.1%
39.21
104.8
104.7
19.7%
10.9%
7.28%
Dec-15F
(19.0%)
(16.9%)
13.5%
(2.27)
3.50
8.17
11.4%
57.2%
50.36
157.5
122.0
7.9%
6.4%
4.39%
Dec-16F
13.7%
28.3%
15.3%
(2.38)
3.73
9.48
16.8%
36.0%
48.15
159.1
111.4
9.0%
7.8%
5.47%
Dec-17F
5.2%
10.8%
16.1%
(2.26)
3.98
9.62
16.6%
36.0%
49.83
166.3
116.4
9.5%
8.1%
5.66%
Dec-13A
4.7%
24.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
1.1%
5.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
3.7%
-27.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
3.7%
7.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
0.0%
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
231
Company Note
Singapore
Sembcorp Marine
Current price:
Target price:
Previous target:
Up/downside:
S$1.82
S$1.88
S$1.88
3.2%
Reuters:
Bloomberg:
Market cap:
SCMN.SI
SMM SP
US$2,691m
S$3,801m
US$3.84m
S$5.41m
2,088m
37.2%
117.0
3.10
105.8
2.60
94.5
2.10
83.3
1.60
15
72.0
Vol m
Maintain Reduce, with unchanged target price, still based on a CY17F P/E of 11x
Reiterate Reduce
We are keeping our Reduce recommendation, given the uncertainty surrounding the
Sete Brasil contracts (50% of its order book). Our worst-case scenario (all seven units
are cancelled) shows possible 20-30% downside to our FY16-17 net profit estimates.
10
5
Jun-15
SMMs reputation could be at stake, affecting future orders (if rig cycle returns) as
attention is drawn to recent allegation about the quality of its proprietary jack-up legs.
Lower-margin contracts
3.60
Mar-15
Rigbuilding capex will likely remain anemic as the industry faces a supply glut, lower
utilisation and rates over the next two years. We expect operating leverage to be
stretched as SMM struggles to fill up sufficient work for its two mega yards in Singapore
and Brazil. Depreciation had only begun in 2015 for Singapore integrated yard phase 1
(S$900m capex).
No changes.
Dec-14
No re-rating catalysts in sight as SMM struggles with litigation, profit reversals and
more deferral of deliveries in 4Q15 and 1H16.
Price Close
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-21.6
-17.1
3M
-22.6
-22.3
12M
-37.5
-24.7
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
5,526
741.7
556.0
0.27
2.6%
6.84
0.13
7.16%
3.45
4.44
(33.1%)
1.42
21.7%
Dec-14A
5,833
817.9
560.1
0.27
0.8%
6.79
0.13
7.14%
5.09
NA
21.2%
1.28
19.9%
Dec-15F
4,251
527.0
223.1
0.11
(57.6%)
16.01
0.06
3.03%
10.95
NA
67.9%
1.23
7.8%
0%
0.76
Dec-16F
4,551
619.4
331.6
0.16
39.7%
11.46
0.08
4.19%
9.61
7.44
68.4%
1.16
10.4%
0%
0.93
Dec-17F
4,821
657.5
356.5
0.17
7.5%
10.66
0.08
4.50%
9.08
8.04
64.5%
1.10
10.6%
0%
0.98
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-17.1
-22.3
-24.7
Absolute
-21.6
-22.6
-37.5
Major shareholders
% held
SembCorp Industries
61.0
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
40.0%
36.0%
32.0%
28.0%
24.0%
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%
35.0
60%
30.0
40%
25.0
20%
20.0
0%
15.0
-20%
10.0
-40%
5.0
-60%
0.0
Jan-11 Jan-12
-80%
Jan-13 Jan-14 Jan-15 Jan-16
ROE (rhs)
Dec-13A
5,526
805
742
(97)
644
2
16
3
665
0
665
(77)
Dec-14A
5,833
844
818
(111)
707
(10)
10
0
707
0
707
(106)
Dec-15F
4,251
483
527
(131)
396
(39)
(43)
(17)
297
(17)
279
(44)
Dec-16F
4,551
575
619
(137)
482
(58)
(10)
0
415
0
415
(62)
Dec-17F
4,821
581
658
(143)
515
(69)
0
0
446
0
446
(67)
589
(33)
0
601
(41)
0
235
(12)
0
352
(21)
0
379
(22)
0
556
556
556
560
560
560
223
237
237
332
332
332
357
357
357
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
742
243
3
(0)
(54)
933
(815)
0
0
0
(815)
738
0
0
(272)
467
585
857
129
Dec-14A
818
Dec-15F
527
Dec-16F
619
Dec-17F
658
(1,267)
(1,128)
(188)
(49)
25
(9)
(83)
(516)
(739)
0
(30)
0
(768)
964
1
(12)
(285)
(39)
(44)
(685)
(739)
0
0
0
(739)
700
0
0
(115)
(58)
(62)
311
(300)
0
0
0
(300)
500
0
0
(159)
(69)
(67)
473
(300)
0
0
0
(300)
300
0
0
(171)
668
(616)
(320)
(1,264)
585
(839)
(724)
(1,374)
341
352
511
79
129
302
473
252
233
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
1,695
442
2,084
0
4,221
2,394
553
30
52
3,029
166
Dec-14A
1,079
469
3,005
14
4,567
3,009
561
53
49
3,671
434
Dec-15F
223
1,063
2,952
14
4,252
3,617
518
53
49
4,236
434
Dec-16F
574
1,264
3,161
14
5,014
3,780
508
53
49
4,389
434
Dec-17F
876
1,607
3,080
14
5,577
3,937
508
53
49
4,546
434
1,813
1,551
3,530
600
1,888
1,127
3,449
1,308
1,480
948
2,861
2,008
1,580
1,069
3,083
2,508
1,669
1,192
3,296
2,808
187
787
123
4,441
2,677
132
2,810
220
1,527
130
5,106
2,965
167
3,132
220
2,227
130
5,219
3,090
179
3,269
220
2,727
130
5,941
3,262
199
3,462
220
3,027
130
6,453
3,448
222
3,670
Dec-13A
24.7%
15.8%
13.4%
0.44
1.28
79.81
11.5%
49.0%
30.1
147.5
134.1
57.5%
19.5%
8.99%
Dec-14A
5.6%
10.3%
14.0%
(0.32)
1.42
33.73
15.0%
48.5%
28.5
186.2
131.9
43.2%
16.5%
7.89%
Dec-15F
(27.1%)
(35.6%)
12.4%
(1.06)
1.48
7.96
15.9%
48.0%
65.7
288.5
157.0
11.0%
7.5%
3.48%
Dec-16F
7.1%
17.5%
13.6%
(1.13)
1.56
7.12
15.0%
48.0%
93.6
281.3
135.0
9.1%
8.0%
4.58%
Dec-17F
5.9%
6.2%
13.6%
(1.13)
1.65
6.46
15.0%
48.0%
108.7
268.7
134.5
9.1%
7.7%
4.59%
Dec-13A
12,300
5,000.0
4,845
N/A
N/A
N/A
Dec-14A
11,432
4,200.0
5,210
N/A
N/A
N/A
Dec-15F
11,450
2,800.0
3,722
N/A
N/A
N/A
Dec-16F
9,706
1,800.0
4,023
N/A
N/A
N/A
Dec-17F
7,736
2,500.0
4,180
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Outstanding Orderbook (S$m)
Order Book Wins (S$m)
Order Book Depletion (S$m)
Average Day Rate Per Ship (US$)
No. Of Ships (unit)
Average Utilisation Rate (%)
234
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.85
S$0.95
S$0.95
11.6%
Reuters:
Bloomberg:
Market cap:
SHEN.SI
SSG SP
US$904.6m
S$1,278m
US$1.21m
S$1.71m
1,504m
28.0%
After two years of zero new stores, SSG secured six stores since Dec 14, adding
~7% to existing GFA. This should drive growth for FY16.
Store growth typically come in spurts and during market downturns when rents
come off. We are hopeful of more new stores in 2016.
With the investment in China capped at S$6m (SSG has net cash of S$126m), risks
are tilted to the upside.
Maintain Add with a target price of S$0.95 (based on 22x CY17 P/E, average 12m
forward). The stock offers attractive yields of 4%.
0.900
146.4
0.800
129.3
0.700
112.1
0.600
20
15
10
5
95.0
Vol m
Dec-14
Another feature of 2015 has been other income. In 9M15, SSGs other income close to
doubled yoy, and formed 17% of net profit. Other income in 9M15 was supplemented by
1) rental income (37% of other income) from the leasing of excess space at its Tampines
store, 2) government grants (32% of other income), and 3) a one-off advertising event
for suppliers (11% of other income). Apart from the one-off event, other components of
other income are likely to continue in FY16 but may taper off in FY17.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
1.2
5.7
3M
1.8
2.1
12M
28.8
41.6
There have been investor concerns over managements plans to enter China which
could possibly burn a capital hole. We understand the concerns given a slowing Chinese
economy and intense competition in the supermarket space. However, management has
assured us that they will be cautious and are still looking for suitable sites with the
possibility of opening 1-2 stores in FY16, while maintaining its asset-light stance. With
the investment in China capped at S$6m, risks are tilted to the upside, in our view.
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
687.4
51.70
38.91
0.028
17.8%
30.23
0.026
3.06%
20.82
58.49
(66.6%)
7.85
25.8%
Dec-14A
726.0
63.09
47.65
0.033
19.0%
25.75
0.030
3.53%
17.11
NA
(55.2%)
5.41
24.7%
Dec-15F
769.5
77.38
55.52
0.037
10.3%
23.02
0.033
3.91%
14.97
32.57
(49.5%)
5.28
23.2%
0%
0.97
Dec-16F
854.6
85.85
61.28
0.041
10.4%
20.85
0.037
4.32%
13.40
20.17
(51.6%)
5.15
25.0%
0%
0.99
Dec-17F
930.6
92.43
64.86
0.043
5.8%
19.70
0.039
4.57%
12.40
20.61
(51.7%)
5.02
25.8%
0%
0.98
Powered by
EFA
BY THE NUMBERS
1M
5.7
1.2
3M
2.1
1.8
12M
41.6
28.8
P/BV vs ROE
7.00
40.0%
6.00
34.3%
5.00
28.6%
25.0
25.0%
20.0
14.0%
3.0%
% held
4.00
22.9%
15.0
SS Holdings
36.6
3.00
17.1%
10.0
-8.0%
12.3
2.00
11.4%
5.0
-19.0%
12.3
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-30.0%
Major shareholders
1.00
5.7%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
ROE (rhs)
Dec-13A
687.4
158.2
51.7
(10.1)
41.6
1.1
0.0
4.9
47.6
0.0
47.6
(8.7)
Dec-14A
726.0
175.7
63.1
(10.9)
52.2
0.9
0.0
4.7
57.8
0.0
57.8
(10.1)
Dec-15F
769.5
188.5
77.4
(19.3)
58.1
0.8
0.0
8.4
67.3
0.0
67.3
(11.8)
Dec-16F
854.6
211.9
85.8
(18.8)
67.1
0.6
0.0
6.6
74.3
0.0
74.3
(13.0)
Dec-17F
930.6
231.7
92.4
(18.9)
73.5
0.6
0.0
4.5
78.6
0.0
78.6
(13.8)
38.9
0.0
0.0
47.6
0.0
0.0
55.5
0.0
0.0
61.3
0.0
0.0
64.9
0.0
0.0
38.9
38.9
38.9
47.6
47.6
47.6
55.5
55.5
55.5
61.3
61.3
61.3
64.9
64.9
64.9
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
51.70
Dec-14A
63.09
Dec-15F
77.38
Dec-16F
85.85
Dec-17F
92.43
(3.79)
10.56
(20.66)
2.21
2.04
4.88
1.05
(8.73)
45.11
(26.30)
0.00
0.00
1.29
(25.00)
0.00
0.00
0.00
(40.81)
4.63
0.92
(7.48)
71.72
(80.94)
0.00
0.00
1.08
(79.87)
0.00
79.02
0.00
(40.12)
8.40
0.80
(11.68)
54.24
(15.00)
0.00
0.00
0.00
(15.00)
0.00
0.00
0.00
(49.97)
6.60
0.60
(11.90)
83.36
(20.00)
0.00
0.00
0.00
(20.00)
0.00
0.00
0.00
(55.16)
4.50
0.60
(17.55)
82.02
(20.00)
0.00
0.00
0.00
(20.00)
0.00
0.00
0.00
(58.37)
(1.05)
(41.87)
(21.76)
20.11
20.11
(0.92)
37.99
29.84
(8.15)
(8.15)
(0.80)
(50.77)
(11.53)
39.24
39.24
(0.60)
(55.76)
7.61
63.36
63.36
(0.60)
(58.97)
3.05
62.02
62.02
236
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
99.7
12.2
45.6
0.0
157.5
90.8
0.0
0.0
0.0
90.8
0.0
Dec-14A
130.5
10.7
43.1
0.0
184.4
160.7
0.0
0.0
0.0
160.7
0.0
Dec-15F
119.7
10.5
47.8
0.0
178.0
156.4
0.0
0.0
0.0
156.4
0.0
Dec-16F
127.9
11.7
52.8
0.0
192.5
157.6
0.0
0.0
0.0
157.6
0.0
Dec-17F
131.6
12.7
57.4
0.0
201.8
158.7
0.0
0.0
0.0
158.7
0.0
88.2
7.9
96.2
0.0
95.8
10.7
106.5
0.0
79.6
10.6
90.2
0.0
88.0
11.7
99.7
0.0
95.7
8.7
104.4
0.0
0.0
0.0
2.3
98.5
149.8
0.0
149.8
0.0
0.0
2.2
108.7
236.3
0.0
236.3
0.0
0.0
2.4
92.6
241.8
0.0
241.8
0.0
0.0
2.4
102.1
248.0
0.0
248.0
0.0
0.0
1.6
106.0
254.4
0.0
254.4
Dec-13A
7.9%
19.6%
7.5%
0.072
0.11
N/A
18.2%
92.5%
5.03
29.51
57.92
105%
27.9%
15.5%
Dec-14A
5.6%
22.0%
8.7%
0.087
0.16
N/A
17.6%
90.9%
5.78
29.42
61.05
83%
27.2%
15.8%
Dec-15F
6.0%
22.6%
10.1%
0.080
0.16
N/A
17.5%
90.0%
5.05
28.55
55.11
45%
24.4%
16.1%
Dec-16F
11.0%
10.9%
10.0%
0.085
0.16
N/A
17.5%
90.0%
4.76
28.64
47.73
45%
27.4%
17.8%
Dec-17F
8.9%
7.7%
9.9%
0.088
0.17
N/A
17.5%
90.0%
4.80
28.79
47.99
50%
29.3%
18.1%
Dec-13A
N/A
7.9%
N/A
3.0%
N/A
N/A
N/A
N/A
Dec-14A
N/A
5.6%
N/A
0.0%
N/A
N/A
N/A
N/A
Dec-15F
N/A
6.0%
N/A
3.3%
N/A
N/A
N/A
N/A
Dec-16F
N/A
11.0%
N/A
1.5%
N/A
N/A
N/A
N/A
Dec-17F
N/A
8.9%
N/A
1.5%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)
237
Company Note
Singapore
SIA Engineering
Current price:
Target price:
Previous target:
Up/downside:
S$3.57
S$4.02
S$4.02
12.5%
Reuters:
Bloomberg:
Market cap:
SIAE.SI
SIE SP
US$2,836m
S$4,007m
US$0.90m
S$1.27m
1,091m
19.0%
Structural headwinds could last for the next two years before heavy checks return
for aircraft and engines as the aviation is seeing more durable equipment.
Airlines are also milking the low oil price in the near term to increase flying hours
and profitability, deferring heavy checks but split minor checks into smaller parcels.
We maintain our Hold call and target price DCF valuation (WACC: 6.7%).
With an uncertain aviation outlook (terrorists attacks and slowing global economy), many
airlines are also extending flying hours of aircraft as much as possible, with the low-oilprice environment helping to boost profitability in an industry ravaged by losses.
No change.
4.10
107.9
3.60
98.9
3.10
3
90.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.6
-5.1
3M
2.0
2.3
12M
-9.6
3.2
Even with more checks shifted from hangars to apron, SIE is challenged by the space
constraints in Changi airport as there is a limit to the number of aircraft being allowed to
be grounded for overnight checks. Therefore, we see moderate growth of line
maintenance growth in the near term, in line with traffic growth in Changi. The next stepup will only kick in by 2018 with the new Terminal 4.
Maintain Hold
Re-rating catalysts could come from earlier-than-expected return of engines overhaul
and heavy airframe MRO. In the near term, SIE could benefit from a stronger US$ trend
as engine MRO contracts are priced in US$.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Mar-14A
1,178
153.1
265.5
0.24
(2.1%)
14.87
0.25
7.00%
19.78
15.43
(37.0%)
2.90
19.9%
Mar-15A
1,121
126.8
183.3
0.17
(31.0%)
21.54
0.15
4.12%
24.29
20.05
(31.9%)
2.98
13.6%
Mar-16F
1,192
134.5
184.5
0.17
0.7%
21.40
0.15
4.16%
23.64
20.49
(34.0%)
2.93
13.8%
0.94
Mar-17F
1,238
143.5
198.3
0.18
7.5%
19.92
0.16
4.52%
21.94
19.90
(35.6%)
2.86
14.5%
1.09
Mar-18F
1,286
150.4
210.7
0.19
6.3%
18.74
0.17
4.80%
20.66
17.69
(37.8%)
2.79
15.1%
1.04
Powered by
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BY THE NUMBERS
1M
3M
12M
Relative
-5.1
2.3
3.2
Absolute
-9.6
2.0
-9.6
Major shareholders
SIA
% held
80.7
P/BV vs ROE
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
25.0%
22.2%
19.4%
16.7%
13.9%
11.1%
8.3%
5.6%
2.8%
0.0%
35.0
10.0%
30.0
3.6%
25.0
-2.9%
20.0
-9.3%
15.0
-15.7%
10.0
-22.1%
5.0
-28.6%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-35.0%
ROE (rhs)
Mar-14A
1,178
933
153
(37)
116
1
163
14
294
0
294
(23)
Mar-15A
1,121
944
127
(43)
84
1
106
14
205
0
205
(20)
Mar-16F
1,192
989
135
(45)
90
1
108
8
207
0
207
(21)
Mar-17F
1,238
1,028
144
(47)
96
1
117
8
223
0
223
(22)
Mar-18F
1,286
1,068
150
(49)
101
1
126
8
237
0
237
(24)
271
(5)
0
185
(2)
0
187
(2)
0
201
(2)
0
213
(2)
0
266
266
266
183
183
183
185
185
185
198
198
198
211
211
211
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
153.1
Mar-15A
126.8
Mar-16F
134.5
Mar-17F
143.5
Mar-18F
150.4
(20.0)
(19.4)
1.3
0.8
0.9
34.2
172.4
(31.9)
307.8
(67.9)
0.0
0.0
0.0
(67.9)
16.1
0.0
0.0
(243.4)
40.0
1.3
(23.3)
125.4
(49.5)
0.0
0.0
112.3
62.8
8.8
0.0
0.0
(269.0)
9.3
(20.7)
124.3
(40.0)
0.0
0.0
108.4
68.4
0.0
9.3
(22.3)
131.3
(50.0)
0.0
0.0
117.1
67.1
0.0
9.3
(23.7)
136.8
(40.0)
0.0
0.0
126.5
86.5
0.0
(162.6)
(164.2)
(178.4)
(227.3)
12.6
256.0
240.1
(260.2)
(72.0)
197.0
188.5
(162.6)
30.1
192.8
193.1
(164.2)
34.2
198.4
198.8
(178.4)
44.9
223.3
223.6
239
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
536
97
107
125
865
337
451
54
0
842
8
Mar-15A
464
83
125
101
773
344
479
62
0
884
9
Mar-16F
494
101
132
89
816
341
478
60
0
879
2
Mar-17F
528
104
138
89
859
345
478
59
0
882
2
Mar-18F
573
108
143
89
912
337
478
57
0
873
2
242
26
276
14
227
20
257
24
242
27
271
24
251
27
280
24
261
27
290
24
27
40
0
317
1,361
30
1,391
27
51
0
307
1,325
25
1,350
27
51
0
321
1,347
27
1,374
27
51
0
331
1,381
29
1,410
27
51
0
341
1,413
32
1,445
Mar-14A
2.73%
(6.4%)
13.0%
0.46
1.23
580.5
7.83%
104%
26.14
159.5
363.0
24.4%
8.56%
16.2%
Mar-15A
(4.87%)
(17.2%)
11.3%
0.39
1.20
280.0
9.74%
89%
29.35
239.1
484.8
15.4%
6.69%
11.0%
Mar-16F
6.33%
6.1%
11.3%
0.42
1.22
256.2
10.00%
89%
26.24
232.7
424.8
15.9%
6.55%
11.1%
Mar-17F
3.90%
6.7%
11.6%
0.45
1.25
275.6
10.00%
90%
26.47
234.6
428.4
17.6%
6.91%
11.6%
Mar-18F
3.90%
4.8%
11.7%
0.49
1.28
288.8
10.00%
90%
26.47
234.6
428.4
18.4%
7.06%
12.0%
Mar-14A
3.6%
8.2%
Mar-15A
1.3%
-17.9%
Mar-16F
2.0%
6.1%
Mar-17F
3.0%
2.9%
Mar-18F
3.0%
2.9%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
Rev. growth (%, 2ndary biz.)
240
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.70
S$0.65
S$0.65
-7.0%
Reuters:
Bloomberg:
Market cap:
SLVX.SI
SILV SP
US$1,321m
S$1,866m
US$1.57m
S$2.21m
639.3m
33.2%
Price Close
Maintain Hold.
1.10
108.0
0.90
94.0
0.70
80.0
0.50
66.0
0.30
100
52.0
Vol m
In the longer term, Silverlake believes that the previously expected large order win from
RHB is still a possibility. The company also sees opportunities in the region as banks
invest in digital technologies to drive revenue growth, manage costs and provide easy
banking access to customers. China also presents a huge opportunity for Silverlake
though it is a challenging market.
1.30
50
Mar-15
No change.
Dec-14
Jun-15
Absolute (%)
Relative (%)
1M
1.4
5.9
3M
28.4
28.7
Sep-15
Source: Bloomberg
Price performance
12M
-32.8
-20.0
The market is also awaiting the findings of the Deloitte study commissioned by
Silverlake in response to a previous short-seller report. This report is expected to be out
by end-Nov 2015 at the earliest. The findings and suggestions which Silverlake may
adopt will help investors better assess how to value the company.
Maintain Hold
The Deloitte report could be a short-term catalyst. Our numbers will have upside risk as
we are less bullish than consensus on new order wins and we have also yet to factor in
contributions from Silverlakes new acquisition. Our target price is DCF-derived
(WACC:11.7%). Dividend yields of 4.1-4.8% in FY15-17 are backed by strong free
cashflow (minimal capex) and a net cash balance sheet. Unless there are changes to its
business structure, Silverlakes high dividend payout ratio should continue.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Jun-14A
500.7
240.5
0.10
34.1%
20.33
9.46
0.12
5.54%
15.86
32.56
(56.1%)
9.23
38.7%
Jun-15A
516.0
282.6
0.10
1.0%
20.12
11.02
0.10
4.77%
18.18
15.23
(51.4%)
8.90
45.0%
Jun-16F
578.7
274.4
0.10
(2.6%)
20.66
9.80
0.09
4.37%
17.41
23.63
(48.8%)
8.84
42.9%
0%
0.87
Jun-17F
565.2
255.3
0.10
(6.7%)
22.15
10.00
0.09
4.06%
17.85
23.18
(48.2%)
8.50
39.1%
0%
0.74
Jun-18F
760.6
363.1
0.14
42.2%
15.57
7.43
0.12
5.78%
12.64
23.58
(46.8%)
8.06
53.1%
0%
0.92
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BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
14.0
70.0%
35.0
60.0%
12.0
60.0%
30.0
50.0%
Relative
5.9
28.7
-20.0
Absolute
1.4
28.4
-32.8
10.0
50.0%
25.0
40.0%
% held
8.0
40.0%
20.0
30.0%
66.3
6.0
30.0%
15.0
20.0%
4.0
20.0%
10.0
10.0%
2.0
10.0%
5.0
0.0%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-10.0%
Major shareholders
Goh Peng Ooi
Artemis Investment Management
1.0
RBS Luxembourg
0.9
ROE (rhs)
(RMm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Jun-14A
500.7
306.7
272.3
(13.5)
258.7
(0.4)
7.4
0.0
265.8
0.0
265.8
(25.2)
Jun-15A
516.0
337.1
287.6
(13.2)
274.4
1.5
5.5
25.4
306.8
0.0
306.8
(24.2)
Jun-16F
578.7
352.8
300.0
(13.4)
286.7
1.4
4.0
12.9
305.0
0.0
305.0
(30.5)
Jun-17F
565.2
345.5
290.9
(13.6)
277.3
1.4
5.0
0.0
283.7
0.0
283.7
(28.4)
Jun-18F
760.6
466.0
409.8
(13.8)
396.0
1.4
6.0
0.0
403.4
0.0
403.4
(40.3)
240.6
(0.0)
0.0
282.7
(0.0)
0.0
274.5
(0.0)
0.0
255.3
(0.0)
0.0
363.1
(0.0)
0.0
240.5
233.1
233.1
282.6
282.6
282.6
274.4
274.4
274.4
255.3
255.3
255.3
363.1
363.1
363.1
Cash Flow
(RMm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Jun-14A
272.3
0.0
26.1
0.0
0.0
5.1
1.9
(22.6)
282.8
(1.9)
1.4
(45.5)
(68.3)
(114.3)
(23.0)
0.0
0.0
(223.6)
Jun-15A
287.6
(5.5)
29.3
0.0
0.0
16.4
3.5
(25.7)
305.5
(3.0)
0.0
(46.6)
119.1
69.5
(1.6)
0.0
(7.9)
(285.8)
Jun-16F
300.0
(4.0)
(17.2)
0.0
0.0
58.4
1.4
(23.4)
315.3
(4.0)
0.0
0.0
(72.8)
(76.8)
1.5
0.0
0.0
(271.2)
Jun-17F
290.9
(5.0)
1.7
0.0
0.0
37.7
1.4
(30.5)
296.2
(4.0)
0.0
0.0
(48.3)
(52.3)
0.0
0.0
0.0
(247.0)
Jun-18F
409.8
(6.0)
(9.2)
0.0
0.0
(31.6)
1.4
(28.4)
336.1
(4.0)
0.0
0.0
(92.3)
(96.3)
0.0
0.0
0.0
(229.8)
(0.6)
(247.3)
(78.7)
145.5
169.1
0.0
(295.2)
79.7
373.3
374.8
0.0
(269.7)
(31.2)
239.9
240.4
0.0
(247.0)
(3.1)
243.9
245.8
0.0
(229.8)
10.0
239.8
241.7
242
BY THE NUMBERS
Balance Sheet
(RMm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
349.8
163.5
Jun-15A
330.9
146.3
Jun-16F
316.2
159.0
Jun-17F
324.9
156.8
Jun-18F
332.2
188.9
3.1
516.4
13.1
74.1
161.5
1.7
250.4
1.3
0.0
477.2
12.9
130.5
156.4
2.1
301.8
0.8
0.0
475.2
12.9
134.5
168.0
1.7
317.0
1.3
0.0
481.7
12.9
139.5
181.5
1.7
335.5
1.3
0.0
521.2
12.9
145.5
195.3
1.7
355.3
1.3
72.3
41.4
115.0
2.6
117.3
115.7
115.2
138.1
118.0
1.6
117.0
2.6
116.5
2.6
139.4
2.6
20.4
23.0
12.4
150.4
616.3
0.1
616.4
19.9
21.6
0.0
139.6
639.3
0.1
639.4
32.8
35.4
0.0
152.4
639.7
0.1
639.8
32.8
35.4
0.0
151.8
665.2
0.1
665.3
32.8
35.4
0.0
174.8
701.5
0.1
701.6
Jun-14A
25.6%
25.4%
54.4%
0.13
0.23
78.7
9.48%
109%
74.22
98.8
117%
41.7%
31.9%
Jun-15A
3.1%
5.6%
55.7%
0.12
0.24
147.0
7.88%
96%
66.52
123.9
120%
43.6%
36.4%
Jun-16F
12.1%
4.3%
51.8%
0.12
0.24
150.9
10.00%
90%
57.11
100.0
143%
45.1%
34.8%
Jun-17F
(2.3%)
(3.1%)
51.5%
0.12
0.25
145.9
10.00%
90%
60.72
106.7
123%
42.7%
31.6%
Jun-18F
34.6%
40.9%
53.9%
0.12
0.26
208.4
10.00%
90%
52.29
92.2
167%
58.1%
42.7%
Jun-14A
N/A
11.4%
N/A
N/A
N/A
21.2%
N/A
N/A
Jun-15A
N/A
-10.8%
N/A
N/A
N/A
-16.7%
N/A
N/A
Jun-16F
N/A
-31.7%
N/A
N/A
N/A
67.6%
N/A
N/A
Jun-17F
N/A
-44.4%
N/A
N/A
N/A
-50.1%
N/A
N/A
Jun-18F
N/A
100.0%
N/A
N/A
N/A
100.0%
N/A
N/A
Key Ratios
MES sales to increase.
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (RM)
BVPS (RM)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Software licensing sales to decline on
lack of order wins.
243
Company Note
Singapore
Singapore Airlines
Current price:
Target price:
Previous target:
Up/downside:
S$10.98
S$12.83
S$12.83
16.8%
Reuters:
Bloomberg:
Market cap:
SIAL.SI
SIA SP
US$9,041m
S$12,773m
US$9.37m
S$13.19m
1,169m
44.0%
Although SIAs 1H16 results disappointed, investors need not be overly pessimistic,
as a cyclical upturn may yet arrive and structural reforms are being implemented.
European passenger weakness, and the air freight slowdown were the key cyclical
drags, but it would be unusual for the weakness to last beyond the next six months.
Long-term initiatives like SilkAirs and Scoots expansion are bearing fruit, while the
privatisation of Tiger Airways would yield even more group-wide synergies.
We stay Add as we see upside surprises given the depressed share price, with our
target still based on P/BV of 1.1x (average since 2001).
13.30
116.0
12.30
109.8
11.30
103.5
10.30
97.3
9.30
6
91.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.4
3.1
3M
8.0
8.3
12M
-0.2
12.6
In contrast, the intra-Asia market was stable, and SilkAir benefitted from an improved
competitive standing after excessive regional LCC expansion in 2012-13 was partially
reversed in 2014. Both SilkAir and Scoot saw significant 4-7% yoy unit cost reductions
for 1HFY16 on the back of their 9-10% yoy ASK growth (which spread out fixed costs)
and improved fleet efficiencies as their older aircraft were replaced with new ones.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
E raymond.yap@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Mar-14A
15,118
1,711
359.5
0.22
(24.5%)
49.76
0.46
4.19%
5.45
4.61
(28.9%)
0.98
1.97%
Mar-15A
15,500
1,883
367.9
0.28
25.5%
39.64
0.22
2.00%
5.10
3.56
(28.9%)
1.03
2.53%
Mar-16F
15,515
2,169
710.5
0.45
61.6%
24.54
0.25
2.28%
4.54
4.81
(25.9%)
0.98
4.10%
1.10
Mar-17F
15,450
2,533
701.6
0.56
24.4%
19.72
0.25
2.28%
4.06
4.57
(22.1%)
0.94
4.88%
0.84
Mar-18F
16,213
2,690
701.7
0.60
7.8%
18.30
0.25
2.28%
4.58
4.98
(7.9%)
0.90
5.04%
0.78
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
1.400
6.00%
60.0
80%
1.200
5.14%
50.0
50%
40.0
20%
30.0
-10%
Relative
3.1
8.3
12.6
Absolute
-1.4
8.0
-0.2
1.000
4.29%
% held
0.800
3.43%
55.4
0.600
2.57%
0.400
1.71%
20.0
-40%
0.200
0.86%
10.0
-70%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
Major shareholders
Temasek Holdings
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-100%
ROE (rhs)
Mar-14A
15,118
2,178
1,711
(1,576)
135
25
93
22
275
100
375
49
Mar-15A
15,500
2,413
1,883
(1,539)
344
25
17
13
400
43
443
(36)
Mar-16F
15,515
2,717
2,169
(1,595)
574
16
(13)
115
693
187
880
(118)
Mar-17F
15,450
3,091
2,533
(1,691)
843
12
(3)
25
877
50
927
(149)
Mar-18F
16,213
3,263
2,690
(1,815)
876
(5)
46
25
941
0
941
(160)
424
(65)
0
407
(39)
0
762
(52)
0
778
(76)
0
781
(79)
0
359
259
259
368
325
325
711
523
523
702
651
651
702
702
702
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
1,711
Mar-15A
1,883
Mar-16F
2,169
Mar-17F
2,533
Mar-18F
2,690
(55)
(79)
47
(198)
1,521
650
0
(65)
2,098
0
420
0
332
752
(53)
27
0
(375)
(1,220)
0
(116)
2,067
0
998
0
(3)
995
552
39
0
(553)
0
0
(118)
1,996
0
672
0
0
672
0
0
0
(117)
0
0
(149)
2,305
0
504
0
0
504
0
0
0
(117)
0
0
(160)
2,577
0
0
0
0
0
0
0
0
(117)
(35)
(436)
2,414
2,797
2,850
(175)
(137)
2,925
3,614
3,062
131
15
2,683
2,668
2,668
37
(80)
2,730
2,809
2,809
20
(97)
2,480
2,577
2,577
245
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
4,884
1,605
243
579
7,311
13,027
2,082
223
0
15,332
61
Mar-15A
5,254
1,487
202
522
7,465
13,523
2,435
498
0
16,456
147
Mar-16F
5,037
1,488
198
522
7,245
14,223
2,423
498
0
17,143
147
Mar-17F
4,666
1,482
192
522
6,862
15,179
2,419
498
0
18,096
147
Mar-18F
2,696
1,555
201
522
4,974
17,814
2,465
498
0
20,777
147
2,978
2,353
5,391
904
2,907
3,729
6,783
1,370
2,849
3,729
6,725
1,370
2,757
3,729
6,633
1,370
2,887
3,729
6,763
1,370
2,772
3,677
0
9,068
13,237
337
13,575
2,839
4,209
0
10,991
12,464
467
12,930
2,839
4,209
0
10,933
13,057
518
13,575
2,839
4,209
0
10,842
13,642
594
14,236
2,839
4,209
0
10,971
14,227
674
14,901
Mar-14A
0.13%
(5.9%)
11.3%
3.33
11.26
3.60
0.0%
209%
38.43
7.30
87.14
1.33%
1.37%
1.33%
Mar-15A
2.52%
10.1%
12.1%
3.20
10.66
6.94
8.2%
79%
36.40
6.21
82.06
3.33%
2.89%
1.45%
Mar-16F
0.10%
15.2%
14.0%
3.01
11.17
9.46
13.4%
56%
35.09
5.72
82.29
5.98%
4.41%
2.31%
Mar-17F
(0.42%)
16.8%
16.4%
2.69
11.67
13.89
16.1%
45%
35.09
5.75
82.77
8.14%
5.94%
2.90%
Mar-18F
4.94%
6.2%
16.6%
1.01
12.17
14.43
17.0%
42%
34.19
5.53
79.53
7.69%
5.79%
3.10%
Mar-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Av. Seat Km (ASK, Yoy Chg %)
Rev. Psg Km (RPK, Yoy Chg %)
Passenger Load Factor (%)
Pax yld per RPK (S$)
Pax rev. per ASK (S$)
Total Cost Per ATK (S$)
Fuel Cost Per ATK (S$)
Non-fuel Cost Per ATK (S$)
Jet Fuel Price (US$/barrel)
Fleet Size (no. Of Planes)
246
Company Note
Singapore
Singapore Exchange
Current price:
Target price:
Previous target:
Up/downside:
S$7.54
S$7.98
S$7.98
5.8%
Reuters:
Bloomberg:
Market cap:
SGXL.SI
SGX SP
US$5,719m
S$8,080m
US$12.88m
S$18.14m
1,074m
63.0%
112.0
7.80
104.0
6.80
15
96.0
Vol m
10
5
Jun-15
Absolute (%)
Relative (%)
Aims to attract new listings in the digital and consumer sectors, which could drive
listing revenue after the recent dry spell.
1M
-1.1
3.4
3M
1.8
2.1
Sep-15
Source: Bloomberg
Price performance
Derivatives volume growth to slow as demand for China A50 futures moderates,
partially offset by ramp-up in new products volume.
FY15 saw a record 42% yoy growth rate in derivative revenue, driven by a surge in
demand for the China A50 index futures amid an A-share market boom and bust. We
expect growth in derivatives to slow in FY16 given falling traded volume of the China
A50 product, albeit partially offset by growth in new derivative products (e.g. FX futures).
8.80
Mar-15
Price Close
Dec-14
12M
2.6
15.4
Singapores IPO market was dreary in 2015. Market conditions aside, SGXs inability to
attract new listings has to do with poor liquidity. It introduced initiatives such as the
MMLP and reduction in board lot sizes to improve liquidity, and will continue to roll out
more programmes. For new listings, SGX is targeting companies in the digital and
consumer sectors, in addition to its niche in REITs and healthcare.
Maintain Hold
SGX is trading at 20x forward P/E (0.5 s.d. below mean), which we believe is a fair
valuation for flat securities ADVT, moderating derivative volumes and a weak IPO
market in FY16. We maintain our Hold rating, with an unchanged DDM-based target
price of S$7.98.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Jun-14A
686.9
417.3
320.4
0.30
(8.10%)
25.23
0.28
3.71%
17.39
29.33
(87.6%)
8.78
35.4%
Jun-15A
778.9
459.5
348.6
0.32
8.72%
23.22
0.28
3.71%
15.77
23.86
(86.1%)
8.29
36.7%
Jun-16F
854.4
494.6
377.3
0.35
8.22%
21.46
0.30
3.98%
14.42
19.53
(90.8%)
7.69
37.2%
0%
1.03
Jun-17F
898.0
519.3
398.2
0.37
5.54%
20.33
0.31
4.11%
13.76
25.93
(83.8%)
7.20
36.6%
0%
1.01
Jun-18F
939.5
541.1
416.9
0.39
4.70%
19.42
0.31
4.11%
13.22
25.01
(77.3%)
6.70
35.7%
0%
0.95
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
3.4
2.1
15.4
Absolute
-1.1
1.8
2.6
Major shareholders
SEL Holdings
% held
23.4
Temasek Holdings
5.6
Nomura Securities
5.0
P/BV vs ROE
12.00
41.0%
30.0
20.0%
10.00
39.5%
25.0
15.0%
8.00
38.0%
20.0
10.0%
6.00
36.5%
15.0
5.0%
4.00
35.0%
10.0
0.0%
2.00
33.5%
5.0
-5.0%
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
32.0%
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-10.0%
ROE (rhs)
Jun-14A
686.9
686.9
417.3
(45.6)
371.7
4.9
2.4
0.0
379.0
0.0
379.0
(58.6)
Jun-15A
778.9
778.9
459.5
(57.3)
402.2
5.7
1.9
1.7
411.5
0.0
411.5
(62.9)
Jun-16F
854.4
854.4
494.6
(57.3)
437.3
8.6
1.4
1.3
448.6
0.0
448.6
(71.3)
Jun-17F
898.0
898.0
519.3
(57.3)
462.0
9.0
1.5
1.0
473.5
0.0
473.5
(75.3)
Jun-18F
939.5
939.5
541.1
(57.3)
483.8
9.4
1.5
1.0
495.7
0.0
495.7
(78.8)
320.4
0.0
0.0
348.6
0.0
0.0
377.3
0.0
0.0
398.2
0.0
0.0
416.9
0.0
0.0
320.4
320.4
320.4
348.6
348.6
348.6
377.3
377.3
377.3
398.2
398.2
398.2
416.9
416.9
416.9
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Jun-14A
417.3
Jun-15A
459.5
Jun-16F
494.6
Jun-17F
519.3
Jun-18F
541.1
15.6
11.7
63.1
(61.0)
(68.7)
1.0
(10.8)
(4.7)
(74.7)
343.6
(71.8)
0.0
0.0
3.9
(67.9)
0.0
0.0
0.0
(299.5)
8.6
6.1
(5.7)
(63.7)
416.4
(82.4)
0.0
0.0
5.2
(77.2)
0.0
(8.0)
0.0
(299.9)
10.7
0.0
(8.6)
(71.3)
488.5
(82.4)
0.0
0.0
8.6
(73.9)
0.0
0.0
0.0
(322.6)
10.7
1.0
(9.0)
(75.3)
385.7
(82.4)
0.0
0.0
9.0
(73.4)
0.0
0.0
0.0
(332.9)
10.7
2.0
(9.4)
(78.8)
396.7
(82.4)
0.0
0.0
9.4
(73.0)
0.0
0.0
0.0
(332.9)
0.0
(299.5)
(23.8)
275.7
275.7
0.0
(307.9)
31.3
339.2
339.2
0.0
(322.6)
92.1
414.7
414.7
0.0
(332.9)
(20.6)
312.3
312.3
0.0
(332.9)
(9.1)
323.8
323.8
248
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
808
572
0
60
1,440
173
27
0
0
201
0
Jun-15A
841
654
0
60
1,555
201
9
0
36
247
0
Jun-16F
957
770
0
60
1,787
226
9
0
36
272
0
Jun-17F
943
881
0
60
1,885
251
9
0
36
297
0
Jun-18F
934
998
0
60
1,992
277
9
0
36
322
0
616
83
699
0
718
86
805
0
890
96
986
0
935
102
1,037
0
978
107
1,085
0
5
5
15
719
922
0
922
2
2
19
825
976
0
976
2
2
19
1,006
1,053
0
1,053
2
2
19
1,057
1,125
0
1,125
2
2
19
1,106
1,209
0
1,209
Jun-14A
(4.0%)
(8.2%)
60.7%
0.75
0.86
N/A
15.5%
93.8%
353.1
N/A
N/A
535%
40.9%
18.4%
Jun-15A
13.4%
10.1%
59.0%
0.78
0.91
N/A
15.3%
86.3%
287.2
N/A
N/A
376%
42.2%
19.9%
Jun-16F
9.7%
7.6%
57.9%
0.89
0.98
N/A
15.9%
85.5%
304.9
N/A
N/A
298%
43.1%
19.1%
Jun-17F
5.1%
5.0%
57.8%
0.88
1.05
N/A
15.9%
83.6%
335.7
N/A
N/A
429%
42.5%
18.4%
Jun-18F
4.6%
4.2%
57.6%
0.87
1.13
N/A
15.9%
79.9%
365.0
N/A
N/A
251%
41.6%
18.1%
Jun-14A
286,292
249
1,150
178.4
0.06%
104
209
2.00
300
Jun-15A
274,331
249
1,102
163.5
0.06%
160
296
1.84
320
Jun-16F
304,507
249
1,223
177.2
0.06%
187
339
1.82
338
Jun-17F
322,778
249
1,296
187.9
0.06%
200
357
1.79
353
Jun-18F
342,145
249
1,374
199.1
0.06%
212
372
1.76
368
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Total Traded Value (S$m)
Trading Days In The Period
Avg Daily Traded Value (S$m)
Securities Clearing Fees (S$m)
Effective Clearing Rate (%)
Derivatives Contracts Traded (S$m)
Derivatives Clearing Revenue (S$m)
Avg Fees Per Contract (S$)
Other Revenue (S$m)
249
Company Note
Singapore
Game face on
Current price:
Target price:
Previous target:
Up/downside:
S$1.79
S$2.04
S$2.04
14.3%
Reuters:
Bloomberg:
Market cap:
SPOS.SI
SPOST SP
US$2,728m
S$3,854m
US$3.97m
S$5.58m
2,147m
74.0%
2.000
106.7
1.800
98.3
1.600
20
15
10
5
90.0
Vol m
2.200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-5.8
-1.3
We see stronger earnings growth in the medium term as SPOST moves on from the
startup phase to executing its strategy of being a global ecommerce logistics player.
No change.
Price Close
3M
1.4
1.7
12M
-7.0
5.8
With the acquisitions of TradeGlobal and Jagged Peak, SPOST will have more than 100
customers of monobrands, including the likes of fashion brands Calvin Klein, Hugo Boss
and Tory Burch, and brands of FMCG companies Nestle and Kimberly Clark. We think a
key growth area for SPOST would be to help these brands execute an end-to-end
ecommerce logistics strategy in Australasia. Its bigger scale will also allow it to have an
edge over startups trying to compete in the same space in ASEAN.
Reiterate Add
We reiterate Add, with a DCF-based target price of S$2.04 (7% WACC). As SPOST
transitions from the startup phase to executing its strategy of becoming a global
ecommerce logistics player, we think earnings will finally see better growth momentum
in the medium term. That said, we acknowledge that near-term earnings may still be
under some pressure as it completes the tail end of its investments. The stock offers 4%
yield while waiting for earnings to re-rate.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Normalised EPS (S$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Mar-14A
821
215.8
104.9
0.055
(26.1%)
42.32
0.063
3.50%
14.50
21
(15.9%)
3.06
11.8%
Mar-15A
920
219.6
152.0
0.071
28.6%
30.34
0.063
3.50%
15.31
1,816
(25.1%)
2.62
11.8%
Mar-16F
1,062
248.4
157.9
0.073
3.4%
26.15
0.070
3.92%
14.31
NA
(13.5%)
2.62
10.8%
0%
0.92
Mar-17F
1,174
235.9
160.8
0.071
(3.0%)
25.69
0.070
3.92%
15.38
36
(19.6%)
2.46
10.3%
0%
0.83
Mar-18F
1,305
271.9
183.7
0.081
14.2%
22.49
0.070
3.92%
13.50
27
(17.5%)
2.46
11.2%
0%
0.89
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-1.3
1.7
5.8
Absolute
-5.8
1.4
-7.0
Major shareholders
Singapore Telecommunications Ltd
% held
25.9
Deutsche Bank AG
3.0
Aberdeen
2.9
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
35.0%
30.6%
26.3%
21.9%
17.5%
13.1%
8.8%
4.4%
0.0%
35.0
50%
30.0
36%
25.0
21%
20.0
7%
15.0
-7%
10.0
-21%
5.0
-36%
0.0
Jan-12 Jan-13
-50%
Jan-14
ROE (rhs)
Mar-14A
866
866
216
(30)
185
(7)
4
0
183
Mar-15A
970
970
220
(35)
185
(4)
7
0
187
Mar-16F
1,146
1,146
248
(26)
222
(10)
7
0
220
Mar-17F
1,220
1,220
236
(30)
206
(10)
8
0
204
Mar-18F
1,367
1,367
272
(38)
234
(10)
9
0
233
183
(34)
187
(33)
220
(36)
204
(35)
233
(40)
149
(2)
154
(2)
183
(3)
170
(9)
193
(10)
(43)
(0)
(22)
105
149
105
152
154
152
158
183
158
161
170
161
184
193
184
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
215.8
Mar-15A
219.6
Mar-16F
248.4
Mar-17F
235.9
Mar-18F
271.9
55.6
49.9
(0.3)
19.3
22.4
8.7
8.7
(18.9)
6.5
6.2
(6.7)
(29.2)
244.2
(37.8)
(4.4)
(35.5)
238.5
(104.4)
(10.0)
(36.2)
183.1
(201.8)
(10.0)
(34.7)
216.9
(105.7)
(10.0)
(39.6)
250.9
(104.4)
(1.1)
1.3
(37.6)
(119.8)
(11.7)
(235.9)
0.0
3.0
(198.8)
0.0
3.5
(102.2)
0.0
3.8
(100.6)
14.8
0.0
(118.8)
330.8
0.0
(128.1)
187.1
0.0
(128.1)
0.0
0.0
(151.0)
0.0
0.0
(158.6)
(324.2)
(428.2)
(221.5)
206.6
213.3
(22.1)
180.6
183.2
2.5
6.9
(24.1)
34.9
19.1
(15.7)
(5.8)
(24.8)
(175.9)
(61.1)
114.7
124.7
(24.8)
(183.4)
(33.1)
150.3
160.2
251
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
411
127
5
13
556
255
98
184
649
1,185
14
Mar-15A
606
164
6
21
798
330
105
303
662
1,400
17
Mar-16F
438
175
8
21
641
506
105
303
662
1,576
18
Mar-17F
564
193
8
21
787
582
105
303
662
1,652
18
Mar-18F
531
215
9
21
776
648
105
303
662
1,719
18
294
43
352
220
352
46
415
221
364
46
427
221
402
46
466
221
447
46
511
221
33
253
21
626
1,112
2
1,114
11
232
83
730
1,464
4
1,468
11
232
83
742
1,468
7
1,475
11
232
83
781
1,642
16
1,658
11
232
83
826
1,643
25
1,669
Mar-14A
24.6%
0.4%
26.3%
0.09
0.58
27.80
18.6%
113%
57.15
N/A
N/A
35.7%
14.3%
6.86%
Mar-15A
12.0%
1.8%
23.9%
0.17
0.68
42.35
17.6%
84%
57.78
N/A
N/A
20.7%
11.9%
8.04%
Mar-16F
15.5%
13.1%
23.4%
0.09
0.68
22.32
16.5%
81%
58.35
N/A
N/A
20.4%
12.8%
7.76%
Mar-17F
10.6%
(5.0%)
20.1%
0.14
0.72
20.70
17.0%
94%
57.13
N/A
N/A
16.3%
11.3%
7.71%
Mar-18F
11.2%
15.3%
20.8%
0.13
0.73
23.50
17.0%
86%
56.99
N/A
N/A
17.7%
12.2%
8.24%
Mar-14A
N/A
0.0%
1.1
Mar-15A
N/A
0.0%
119.8
Mar-16F
N/A
0.0%
-
Mar-17F
N/A
0.0%
-
Mar-18F
N/A
0.0%
-
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
(S$)
Volumes Moved (% Change)
Rates Charged (% Change)
Acquisitions (m)
252
Company Note
Efforts to boost topline through investments in new media and hosting one-off
events are unlikely to offset the decline in traditional media revenue.
SPRM.SI
SPH SP
US$4,353m
S$6,150m
US$10.37m
S$14.61m
1,597m
90.0%
We see risk of further DPS cuts in FY16-17 as earnings continue to come under
pressure.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Average daily turnover:
Current shares o/s
Free float:
Key changes in this note
No change.
4.300
116.0
4.200
111.8
4.100
107.7
4.000
103.5
3.900
99.3
3.800
95.2
3.700
15
91.0
10
Vol m
The property segment (20% of revenue, 38% of core PBT) remains the stable earnings
contributor, with FY15 seeing maiden contributions from The Seletar Mall, which opened
on 28 Nov 2014. We expect FY16 property revenue and PBT to see a small uplift of 6%
and 4% respectively, mainly due to full-year contributions from The Seletar Mall vs. 9M
in FY15. AEIs at Paragon will also increase NLA by 7,000 sq ft progressively from FY1618, though this could be partially offset by the challenging outlook for retail sales.
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.5
0.0
3M
-1.5
-1.2
12M
-7.2
5.6
FY15 saw some positives that are unlikely to repeat: 1) The newsprint charge-out price
has contracted by 6% CAGR in FY12-15 and helped to alleviate cost pressures, but
guidance was for prices to trough close to current levels. 2) SPH has also derived other
income by hosting events (e.g. ST Run, Jubilee Walk) to buffer the fall in earnings, but
some of these are linked to SG50 festivities and are unlikely to repeat ahead. In view of
this, we expect a 3-5% decline in operating profit in FY16-17.
Maintain Reduce
We maintain our Reduce call on SPH, with a SOP-based target price of S$3.85. We
prefer SPOST, which offers a slightly lower yield of 4% but has earnings re-rating
potential.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Aug-14A
1,215
438.4
404.3
0.22
(17.1%)
17.43
0.21
5.45%
16.40
17.11
7.6%
1.69
9.89%
Aug-15A
1,177
436.7
321.7
0.20
(9.9%)
19.35
0.20
5.19%
16.93
7.27
11.9%
1.72
8.81%
Aug-16F
1,154
417.1
265.7
0.16
(17.4%)
23.43
0.19
4.94%
17.89
19.51
12.5%
1.77
7.45%
0%
0.91
Aug-17F
1,140
403.1
261.0
0.16
(1.7%)
23.85
0.18
4.68%
18.66
20.76
12.8%
1.82
7.53%
0%
0.87
Aug-18F
1,138
398.4
263.7
0.16
1.0%
23.61
0.18
4.68%
19.00
21.02
12.7%
1.86
7.79%
0%
0.82
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
2.500
18.0%
30.0
60%
2.000
14.4%
25.0
45%
10.8%
20.0
30%
% held
1.500
15.0
15%
DBSN Services
3.6
1.000
7.2%
10.0
0%
Daiwa
1.1
0.500
3.6%
5.0
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
0.0
Jan-12 Jan-13
Relative
Absolute
Major shareholders
0.0
-4.5
-1.2
-1.5
5.6
-7.2
-15%
-30%
Jan-14
ROE (rhs)
Aug-14A
1,231
1,231
438
(54)
384
(35)
(31)
157
476
53
528
(58)
Aug-15A
1,205
1,205
437
(50)
387
(34)
(11)
88
430
0
430
(60)
Aug-16F
1,186
1,186
417
(47)
370
(33)
(14)
50
372
0
372
(57)
Aug-17F
1,176
1,176
403
(44)
359
(33)
(10)
51
367
0
367
(55)
Aug-18F
1,178
1,178
398
(40)
358
(33)
(6)
51
371
0
371
(55)
471
(66)
370
(49)
315
(50)
312
(51)
315
(52)
404
357
357
322
322
322
266
266
266
261
261
261
264
264
264
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Aug-14A
438.4
3.8
Aug-15A
436.7
15.4
Aug-16F
417.1
Aug-17F
403.1
Aug-18F
398.4
6.2
(0.9)
(0.1)
17.9
(35.1)
(65.9)
359.0
(18.9)
797.5
(852.9)
18.0
(56.4)
61.3
0.6
(4.0)
(390.0)
28.3
(33.6)
(58.3)
388.4
(13.6)
710.1
(275.0)
(30.4)
391.2
76.2
0.0
(18.0)
(380.6)
0.0
(33.2)
(57.2)
333.0
(13.9)
0.0
0.0
0.0
(13.9)
0.0
0.0
0.0
(339.3)
0.0
(33.2)
(55.5)
313.6
(13.7)
0.0
0.0
0.0
(13.7)
0.0
0.0
0.0
(307.2)
0.0
(33.2)
(55.3)
309.8
(13.7)
0.0
0.0
0.0
(13.7)
0.0
0.0
0.0
(291.1)
(37.9)
(370.0)
(67.3)
363.9
337.7
(640.0)
(962.3)
(182.7)
855.8
813.2
(33.2)
(372.5)
(53.4)
319.1
352.3
(33.2)
(340.4)
(40.5)
299.9
333.1
(33.2)
(324.2)
(28.0)
296.2
329.3
254
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Aug-14A
1,472
144
24
0
1,640
286
4,549
173
4
5,011
926
Aug-15A
767
192
12
0
972
250
4,650
189
4
5,093
337
Aug-16F
747
158
22
0
927
216
4,650
189
4
5,060
337
Aug-17F
740
156
22
0
918
186
4,650
189
4
5,030
337
Aug-18F
745
156
22
0
923
160
4,650
189
4
5,003
337
298
61
1,286
879
271
69
677
947
253
69
659
947
250
69
656
947
249
69
655
947
44
923
47
2,255
3,687
709
4,396
48
995
51
1,723
3,619
728
4,347
48
995
51
1,705
3,509
777
4,287
48
995
51
1,702
3,422
828
4,250
48
995
51
1,702
3,350
880
4,229
Aug-14A
(1.96%)
(4.57%)
36.1%
(0.21)
2.28
10.95
10.9%
101%
43.89
N/A
N/A
104%
7.06%
6.96%
Aug-15A
(3.14%)
(0.38%)
37.1%
(0.32)
2.24
11.51
13.9%
105%
52.19
N/A
N/A
143%
7.36%
6.35%
Aug-16F
(1.94%)
(4.48%)
36.1%
(0.33)
2.17
11.15
15.4%
116%
55.53
N/A
N/A
120%
7.42%
5.78%
Aug-17F
(1.25%)
(3.36%)
35.4%
(0.34)
2.12
10.84
15.1%
112%
50.32
N/A
N/A
134%
7.32%
5.78%
Aug-18F
(0.19%)
(1.17%)
35.0%
(0.33)
2.07
10.81
14.9%
110%
50.05
N/A
N/A
151%
7.35%
5.87%
Aug-14A
-6.8%
N/A
-5.1%
N/A
N/A
N/A
N/A
N/A
N/A
-4.2%
Aug-15A
-5.4%
N/A
-5.7%
N/A
N/A
N/A
N/A
N/A
N/A
-11.7%
Aug-16F
-4.8%
N/A
-5.0%
N/A
N/A
N/A
N/A
N/A
N/A
-3.0%
Aug-17F
-2.7%
N/A
-4.0%
N/A
N/A
N/A
N/A
N/A
N/A
-2.0%
Aug-18F
-1.6%
N/A
-3.0%
N/A
N/A
N/A
N/A
N/A
N/A
-2.0%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Adex rev. grth (%, main newsppr)
ASP (% chg, main newsppr)
Circulation grth (%, main newsppr)
Adex rev. grth (%, 2ndary newsppr)
ASP (% chg, 2ndary newsppr)
Circulation grth (%, 2ndary newsppr)
Adex rev. grth (%, tertiary newsppr)
ASP (% chg, tertiary ppr)
Circulation grth (%, tertiary newsppr)
Newsprint Cost (% Change)
255
Company Note
Singapore
SingTel
Diversification pays
Current price:
Target price:
Previous target:
Up/downside:
S$3.85
S$4.50
S$4.50
16.9%
Reuters:
Bloomberg:
Market cap:
STEL.SI
ST SP
US$43,448m
S$61,383m
US$61.16m
S$86.22m
15,944m
43.6%
SingTel is the least at risk among its local peers of being negatively impacted by the
entry of a fourth mobile operator in Singapore due to its diversified operations.
We are longer-term positive on Trustwave due to growing demand for cyber security
services. But Trustwave will be EPS-dilutive in FY16-18.
Optus should gain further market traction as its network coverage/quality gap
narrows vs Telstra. Service revenue is expected to grow, but at a measured pace.
3.90
103.3
3.40
100
95.0
Vol m
4.40
50
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.8
2.7
3M
5.5
5.8
12M
-0.3
12.5
Optus is starting to gain greater market traction with its My Plan packages and better
coverage from its new 4G-700MHz network. With higher capex to upgrade the network,
we believe Optus will further narrow the network coverage/quality gap with Telstra and
gain market share. We expect Optuss service revenue growth to be better but
measured, at 1.8% p.a. in FY16-17 (FY15: +1.1%, FY14: -4.1%), as network
improvements take time and rivals could react to defend their market share.
Financial Summary
Analyst
FOONG Choong Chen, CFA
T (60) 3 2261 9081
E choongchen.foong@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Operating EBITDA Margin
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
16,848
5,155
30.6%
3,652
0.23
(0.05%)
16.99
0.17
4.36%
11.38
25.64
31.0%
15.1%
Mar-15A
17,223
5,090
29.6%
3,782
0.24
4.66%
16.24
0.17
4.52%
11.58
23.58
34.0%
15.6%
Mar-16F
16,748
4,968
29.7%
3,727
0.23
(1.39%)
16.46
0.17
4.54%
11.97
22.24
36.7%
14.8%
0%
0.95
Mar-17F
17,667
5,104
28.9%
3,950
0.25
5.99%
15.53
0.19
4.82%
11.51
21.31
34.8%
15.0%
0%
0.95
Mar-18F
17,873
5,172
28.9%
4,170
0.26
5.57%
14.71
0.20
5.08%
11.12
20.97
31.6%
15.2%
0%
0.94
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
2.7
5.8
12.5
Absolute
-1.8
5.5
Major shareholders
Temasek Hldgs
-0.3
% held
54.3
P/BV vs ROE
3.00
15.80%
2.50
15.57%
2.00
15.33%
1.50
15.10%
1.00
14.87%
0.50
14.63%
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
14.40%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
8.0%
6.8%
5.6%
4.4%
3.2%
2.0%
0.8%
-0.4%
-1.6%
-2.8%
-4.0%
ROE (rhs)
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Mar-14A
16,848
5,155
5,155
(2,132)
3,023
(181)
2,201
0
5,043
42
5,085
(1,428)
Mar-15A
17,223
5,090
5,090
(2,161)
2,929
(216)
2,579
0
5,291
3
5,294
(1,510)
Mar-16F
16,748
4,968
4,968
(2,194)
2,774
(255)
2,815
0
5,334
0
5,334
(1,604)
Mar-17F
17,667
5,104
5,104
(2,288)
2,816
(271)
3,124
0
5,670
0
5,670
(1,717)
Mar-18F
17,873
5,172
5,172
(2,322)
2,851
(259)
3,405
0
5,996
0
5,996
(1,823)
3,657
(5)
3,785
(3)
3,730
(3)
3,953
(3)
4,173
(3)
3,652
3,610
3,610
3,782
3,779
3,779
3,727
3,727
3,727
3,950
3,950
3,950
4,170
4,170
4,170
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
5,155
1,157
(305)
Mar-15A
5,090
1,215
86
Mar-16F
4,968
1,346
0
Mar-17F
5,104
1,445
0
Mar-18F
5,172
1,529
0
(148)
(660)
(518)
4,681
(2,102)
7
(362)
(37)
(2,494)
205
0
(1)
(1,306)
(598)
4,487
(2,238)
15
(451)
52
(2,621)
737
0
(1)
(352)
(665)
5,296
(2,268)
0
(1,269)
0
(3,537)
1,000
0
(1)
(463)
(684)
5,401
(2,523)
0
0
0
(2,523)
0
0
(1)
(356)
(703)
5,641
(2,215)
0
0
0
(2,215)
(500)
0
(2,678)
(2,678)
(2,789)
(2,788)
(2,955)
(2,473)
(285)
2,393
2,540
(1,940)
(75)
2,602
2,235
(1,789)
(30)
2,759
2,154
(2,788)
91
2,879
3,292
(3,455)
(29)
2,926
3,830
257
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
623
3,556
170
3
4,351
11,096
10,420
10,740
2,713
34,969
814
Mar-15A
563
3,885
290
30
4,768
10,683
11,115
11,949
3,553
37,299
174
Mar-16F
533
3,351
156
30
4,070
10,757
11,644
12,307
3,553
38,261
174
Mar-17F
624
4,282
319
30
5,255
10,991
12,290
12,772
3,553
39,607
174
Mar-18F
595
3,440
161
30
4,226
10,885
13,046
13,155
3,553
40,639
174
4,442
435
5,690
7,227
5,078
504
5,757
8,804
3,499
504
4,178
9,804
5,324
504
6,002
9,804
3,595
504
4,274
9,304
2,066
9,293
445
15,428
23,868
24
23,893
2,216
11,020
522
17,299
24,733
35
24,768
2,119
11,923
522
16,622
25,671
38
25,709
1,660
11,464
522
17,988
26,833
41
26,874
2,674
11,978
522
16,774
28,048
44
28,092
Mar-14A
(7.34%)
(0.87%)
30.6%
(0.47)
1.50
9.88
28.1%
75.2%
78.38
5.98
145.8
9.73%
9.51%
9.46%
Mar-15A
2.23%
(1.26%)
29.6%
(0.53)
1.55
9.47
28.5%
74.4%
78.85
6.91
143.2
9.32%
8.93%
9.69%
Mar-16F
(2.76%)
(2.41%)
29.7%
(0.59)
1.61
8.05
30.1%
75.0%
79.06
6.93
133.2
8.23%
7.99%
9.28%
Mar-17F
5.49%
2.75%
28.9%
(0.59)
1.68
7.77
30.3%
75.0%
78.85
6.90
128.2
7.88%
7.78%
9.52%
Mar-18F
1.17%
1.34%
28.9%
(0.56)
1.76
8.06
30.4%
75.0%
78.85
6.90
128.2
7.95%
7.68%
9.72%
Mar-14A
13.85
1.62
1.09
0.41
38.2
1.0
66
99.1
Mar-15A
14.26
1.57
1.11
0.42
38.9
1.0
67
104.1
Mar-16F
14.66
1.53
1.12
0.43
39.0
1.0
67
109.3
Mar-17F
15.05
1.49
1.14
0.44
38.9
0.9
68
114.8
Mar-18F
15.05
1.49
1.14
0.44
38.9
0.9
68
114.8
Key Ratios
Dividend policy is 60-75% payout ratio
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Group Mobile Subscribers (m)
Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)
258
Company Note
Singapore
SMRT Corporation
Current price:
Target price:
Previous target:
Up/downside:
S$1.50
S$1.37
S$1.37
-8.6%
Reuters:
Bloomberg:
Market cap:
SMRT.SI
MRT SP
US$1,618m
S$2,286m
US$2.26m
S$3.18m
1,522m
38.0%
FY16-17F earnings outlook further subdued by 1.9% fare cut effective Dec 15.
While the potential rail reform is a positive, market views that the government will
grant favourable terms to SMRT are unwarranted.
The operation of the Downtown Line (DTL) stage II (starting in Dec 2015) may add
further downside risk to our FY16-17F EPS.
1.60
104.3
1.40
96.6
1.20
88.8
1.00
10
81.0
Vol m
1.80
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.3
4.8
3M
23.0
23.3
12M
-6.0
6.8
Apart from lifted MRE, SMRTs FY16-17 EPS are also likely to be adversely affected by
the LTAs 1.9% fare cut, effective from Dec 2015. In FY15, 53% of group revenue was
derived from rail fare business and 28% from bus fare business. Given SMRTs largely
fixed operating cost structure, we believe most of the fare cut will flow to the groups
bottom line.
Rail reform is good but one should not hope for too much
While we acknowledge that SMRT should benefit from potential capital-unlocking if a rail
reform materialises, we doubt if the company will receive favourable terms for the asset
transfer. Two issues that must be taken into consideration are the authoritys treatment
of SMRTs asset purchase obligation under the old rail regime and the governments
balancing of public and operator interests. Such issues point to the risk of an
undesirable outcome for SMRT.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
1,164
265.4
61.9
0.041
(25.8%)
36.85
0.022
1.47%
10.21
NA
60.0%
2.85
7.9%
Mar-15A
1,236
324.0
91.0
0.060
47.0%
25.08
0.033
2.17%
8.93
44.37
77.5%
2.66
11.0%
Mar-16F
1,293
322.4
80.8
0.053
(11.3%)
28.26
0.027
1.77%
9.35
NA
88.2%
2.54
9.2%
0%
0.95
Mar-17F
1,294
306.8
80.7
0.053
(0.0%)
28.28
0.027
1.77%
8.86
6.14
53.4%
2.43
8.8%
0%
0.87
Mar-18F
1,336
323.3
104.1
0.068
28.9%
21.93
0.034
2.28%
8.25
14.92
45.7%
2.30
10.8%
0%
0.90
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
4.8
23.3
6.8
Absolute
0.3
23.0
Major shareholders
Temasek Holdings
Invesco
-6.0
% held
54.4
0.7
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
18.0%
15.8%
13.5%
11.3%
9.0%
6.8%
4.5%
2.3%
0.0%
Growth
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
60%
49%
38%
27%
16%
4%
-7%
-18%
-29%
-40%
ROE (rhs)
Mar-14A
1,164
300
265
(181)
84
(9)
(0)
0
75
0
75
(13)
Mar-15A
1,236
344
324
(203)
121
(11)
1
0
111
0
111
(20)
Mar-16F
1,293
344
322
(216)
107
(13)
4
0
98
0
98
(18)
Mar-17F
1,294
344
307
(200)
107
(13)
4
0
98
0
98
(18)
Mar-18F
1,336
376
323
(188)
136
(14)
4
0
126
0
126
(23)
61
0
0
90
1
0
80
1
0
80
1
0
104
1
0
62
62
62
91
91
91
81
81
81
81
81
81
104
104
104
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
265.4
Mar-15A
324.0
Mar-16F
322.4
Mar-17F
306.8
Mar-18F
323.3
(12.8)
(10.0)
(166.6)
0.1
4.9
26.9
(10.2)
(4.5)
264.8
(651.9)
7.6
0.0
1.8
(642.6)
28.7
0.0
0.0
(30.4)
25.5
(12.0)
(9.0)
318.5
(462.5)
6.6
(1.5)
1.6
(455.8)
188.8
0.0
0.0
(41.1)
30.9
(14.0)
(4.9)
167.8
(215.5)
0.0
0.0
1.3
(214.3)
0.0
0.0
0.0
(40.4)
31.3
(14.4)
(17.6)
306.3
(199.9)
264.3
0.0
1.3
65.6
0.0
0.0
0.0
(40.4)
43.5
(14.8)
(17.6)
339.3
(187.5)
0.0
0.0
1.3
(186.3)
0.0
0.0
0.0
(52.1)
18.9
17.2
(360.6)
(349.1)
(367.5)
30.5
178.2
40.9
51.4
(125.4)
0.0
(40.4)
(86.8)
(46.4)
(32.5)
0.0
(40.4)
331.6
372.0
386.3
0.0
(52.1)
101.0
153.1
167.8
260
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
156
99
84
5
344
1,642
53
14
21
1,729
156
Mar-15A
156
168
81
0
405
2,042
56
14
21
2,132
9
Mar-16F
29
106
95
0
230
2,042
59
23
21
2,146
9
Mar-17F
320
106
95
0
522
1,778
63
32
21
1,894
9
Mar-18F
369
110
98
0
577
1,778
67
41
21
1,907
9
355
54
566
480
568
63
640
813
354
76
439
813
355
75
439
813
366
81
456
813
69
549
156
1,271
802
(0)
802
60
873
166
1,678
860
(1)
859
60
873
166
1,477
900
(1)
899
60
873
166
1,477
940
(2)
939
60
873
166
1,494
992
(2)
990
Mar-14A
3.97%
(2.2%)
22.8%
(0.32)
0.53
8.08
17.6%
54.1%
29.01
30.47
197.0
7.01%
5.49%
3.22%
Mar-15A
6.16%
22.1%
26.2%
(0.44)
0.56
9.64
18.4%
54.4%
39.38
33.82
189.0
6.89%
7.12%
4.32%
Mar-16F
4.66%
(0.5%)
24.9%
(0.52)
0.59
7.65
18.0%
50.0%
38.77
33.91
177.9
5.23%
5.79%
3.69%
Mar-17F
0.10%
(4.8%)
23.7%
(0.33)
0.62
7.44
18.0%
50.0%
29.99
36.50
136.2
4.78%
5.68%
3.80%
Mar-18F
3.21%
5.4%
24.2%
(0.30)
0.65
9.18
18.0%
50.0%
29.53
36.71
137.0
7.03%
7.02%
4.68%
Mar-14A
-0.3%
2.9%
-1.1%
4.5%
Mar-15A
0.5%
2.8%
4.0%
5.1%
Mar-16F
1.8%
1.8%
1.3%
3.0%
Mar-17F
-0.9%
0.0%
-0.9%
3.0%
Mar-18F
1.5%
2.5%
1.5%
3.0%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Avg fare/trip (%chg,main prod/serv)
Ridership grth (%,main prod/serv)
Avg fare/trip (%chg,2ndary prod/serv)
Ridership grth (%,2ndary prod/serv)
261
Company Note
Singapore
SPH REIT
Limited catalysts
Current price:
Target price:
Previous target:
Up/downside:
S$0.94
S$1.07
S$1.07
14.0%
Reuters:
Bloomberg:
Market cap:
SPHR.SI
SPHREIT SP
US$1,686m
S$2,382m
US$0.46m
S$0.65m
2,514m
24.9%
No change.
1.000
102.3
0.900
97.7
0.800
10
93.0
Vol m
1.100
Dec-14
In terms of operations, Paragon saw a 2% yoy rise in visitor traffic for FY15 but tenant
sales dipped by 3.2% yoy. Hence, occupancy costs rose to 19% in FY15. Meanwhile,
the Clementi Mall saw a 3.6% yoy rise in FY15 tenant sales and a corresponding 4.7%
rise in shopper traffic, with occupancy costs at 14.6%. Businesses in the latter that
continue to do well include the supermarket, F&B and lifestyle sectors.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.5
4.0
3M
0.5
0.8
12M
-10.9
1.9
We expect SPH REIT to continue enjoying positive rental reversions, with 9.8% and
31.9% of rental income (mainly from Clementi Mall) due to be renewed in FY16 and
FY17, respectively. Current occupancy cost at Clementi Mall is below the 16-18% range
of its peers. In addition to higher rents, decanting 7,000 sqf of space from replacement
of Paragons air-handling unit will increase leasable area gradually in Sep 2015-Mar
2018 and boost rental income. Gearing remains low at 25.7% at end-FY15.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Aug-14A
222.9
165.9
228.0
150.3
0.050
(0.04%)
18.80
0.060
6.38%
25.8%
0.94
1.00
5.47%
Aug-15A
205.1
155.6
153.5
138.0
0.046
(7.31%)
20.29
0.055
5.82%
25.5%
0.95
0.99
4.92%
Aug-16F
211.7
158.5
120.5
142.6
0.047
2.33%
19.83
0.056
5.97%
25.5%
0.94
1.00
5.03%
1.00
Aug-17F
217.7
163.4
125.6
146.2
0.049
3.94%
19.07
0.057
6.10%
25.6%
0.94
1.00
5.26%
1.01
Aug-18F
224.2
168.3
130.8
148.9
0.051
4.07%
18.33
0.058
6.21%
25.6%
0.94
1.00
5.48%
1.01
Powered by
EFA
BY THE NUMBERS
1M
Relative
Absolute
4.0
-0.5
Major shareholders
Times Properties Private Ltd
3M
0.8
0.5
12M
1.9
-10.9
1.150
29.00%
1.100
27.90%
0.0700
7.00%
0.0600
6.00%
0.0500
5.00%
% held
1.050
26.80%
0.0400
4.00%
69.7
1.000
25.70%
0.0300
3.00%
0.0200
2.00%
0.0100
1.00%
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
NTUC Enterprise
5.4
3.1
0.950
24.60%
0.900
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
23.50%
DPS (lhs)
Aug-14A
222.9
0.0
222.9
(57.0)
165.9
0.0
(17.1)
(1.7)
0.0
147.0
0.0
147.0
(21.7)
0.0
0.0
102.6
228.0
0.0
0.0
0.0
228.0
150.3
Aug-15A
205.1
0.0
205.1
(49.5)
155.6
0.0
(16.0)
(1.7)
0.0
138.0
0.0
138.0
(21.0)
0.0
0.0
36.6
153.5
0.0
0.0
0.0
153.5
138.0
Aug-16F
211.7
0.0
211.7
(53.2)
158.5
0.0
(16.0)
(1.8)
0.0
140.7
0.0
140.7
(19.6)
0.0
0.0
0.0
121.1
(0.6)
0.0
0.0
120.5
142.6
Aug-17F
217.7
0.0
217.7
(54.3)
163.4
0.0
(16.0)
(1.8)
0.0
145.7
0.0
145.7
(19.6)
0.0
0.0
0.0
126.1
(0.5)
0.0
0.0
125.6
146.2
Aug-18F
224.2
0.0
224.2
(55.9)
168.3
0.0
(16.0)
(1.8)
0.0
150.5
0.0
150.5
(19.6)
0.0
0.0
0.0
130.9
(0.1)
0.0
0.0
130.8
148.9
Aug-14A
228
22
21
0
(96)
175
(3)
(1,306)
(18)
(1,327)
841
485
(115)
(18)
1,193
40
(1,152)
(329)
Aug-15A
154
21
1
0
(17)
158
(15)
0
0
(15)
0
0
(138)
(19)
(157)
(13)
144
125
Aug-16F
121
20
0
(1)
20
160
0
0
0
0
0
0
(143)
(20)
(162)
(2)
160
141
Aug-17F
126
20
0
(0)
19
164
0
0
0
0
0
0
(146)
(20)
(166)
(2)
165
145
Aug-18F
131
20
0
(0)
17
167
0
0
0
0
0
0
(149)
(20)
(169)
(1)
168
148
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
263
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Aug-14A
3,159
12
1
3,172
91
0
6
0
97
35
0
0
35
843
38
881
2,353
0
Aug-16F
3,211
6
5
3,221
75
0
5
0
80
30
0
0
30
843
37
880
2,392
0
Aug-17F
3,211
3
5
3,218
73
0
5
0
79
30
0
0
30
843
37
880
2,387
0
Aug-18F
3,211
2
5
3,217
72
0
5
0
78
30
0
0
30
843
37
880
2,385
0
2,398
2,392
2,387
2,385
Aug-14A
2.80%
4.35%
74.4%
5.05%
6.71
0.00%
66%
2.75
2.75
2.58
7.14%
Aug-15A
(7.99%)
(6.20%)
75.9%
(8.77%)
6.37
0.00%
90%
0.30
0.30
0.28
4.67%
Aug-16F
3.20%
1.84%
74.9%
2.61%
7.10
0.53%
118%
2.66
2.66
2.48
3.65%
Aug-17F
2.86%
3.13%
75.1%
2.19%
7.35
0.37%
116%
2.60
2.60
2.43
3.81%
Aug-18F
2.97%
2.94%
75.0%
1.83%
7.60
0.11%
114%
2.56
2.56
2.39
3.97%
Aug-14A
19.6
N/A
N/A
900
100.0%
N/A
N/A
Aug-15A
20.0
N/A
N/A
900
100.0%
N/A
N/A
Aug-16F
20.5
N/A
N/A
905
100.0%
N/A
N/A
Aug-17F
21.1
N/A
N/A
910
99.0%
N/A
N/A
Aug-18F
21.6
N/A
N/A
910
100.0%
N/A
N/A
2,353
Aug-15A
3,213
9
5
3,227
77
0
5
0
83
30
249
0
280
596
37
632
2,398
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
264
Company Note
Singapore
ST Engineering
Conglomerate pains
Current price:
Target price:
Previous target:
Up/downside:
S$2.90
S$3.33
S$3.33
14.7%
Reuters:
Bloomberg:
Market cap:
STEG.SI
STE SP
US$6,369m
S$8,997m
US$7.01m
S$9.87m
3,120m
37.8%
Order drought in marine could drag longer than expected in a low-oil environment
Share price could trade sideways pending the provisions for stock obsolescence
that aerospace may be hit with in 4Q15.
Re-rating catalysts could come from defence /government-related order wins.
Delayed maintenance
Margins could be under pressure as the new 15-pallate PTF conversion goes through a
learning curve (first few deliveries in 2016). In the longer-term, aerospace could face
lower maintenance scope and longer interval for heavy checks for new generation
aircraft like the B737NG and A320neo. Better durability of the CFM engines is also
pushing back the overhaul cycle to 2017/18.
We do not expect the commercial offshore capex to recover in the near term on the back
of a low oil price environment. In addition, defence contracts are taking longer to come
to fruition which could put pressure on its operating leverage in the US and Singapore
yards. Earnings gap in marine could be bigger-than-expected if no contracts are secured
in the next 12 months. The division has not won any major contracts since 2014.
No change
Price Close
106.9
3.10
100.4
2.60
15
94.0
Vol m
10
Since 3Q13, STE has been hit by various events contract award delays, impairment
charges, restructuring, provisions for stock obsolescence, doubtful debts and cost
overruns, mainly in the aerospace and marine sectors. The endless negative surprises
could be a long-term derating catalyst and multiple reversions to +1s.d trading band of
20-21x is unlikely in the near-term, especially on the back of lackluster earnings growth.
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.9
-5.4
3M
-2.4
-2.1
12M
-13.4
-0.6
Electronics is the key growth driver, supported by demand for infor-com, mass-rapid
train infrastructure. satellite and homeland security spending by government agencies.
STE is still contending for the ERP2 contract which is likely to be announced in 2016.
We believe the project size, including maintenance contracts could amount to S$800m1bn.
Maintain Hold
Relative to other conglomerates in Singapore (KEP and SCI), STEs order book of
S$12.2bn is secured mainly from long-term contracts which are less susceptible to
cancellations. Order win is still decent: aerospace and electronics have secured S$1.7bn
and S$1.1bn of orders YTD. We believe the momentum is likely to continue in FY16.
Dividend yield is attractive, backed by net cash of c.S$600m (incl. cash in investments).
Our target price is intact, still based on blended 18x CY17 P/E, DCF and dividend yield.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
6,633
845.2
580.8
0.19
(1.16%)
15.43
0.15
5.17%
9.30
14.30
(38.3%)
4.27
29.0%
Dec-14A
6,539
760.8
532.0
0.17
(8.39%)
17.01
0.15
5.17%
10.82
NA
(20.8%)
4.24
25.0%
Dec-15F
6,302
744.2
504.5
0.16
(5.20%)
17.93
0.14
4.74%
11.04
22.63
(18.8%)
4.10
23.2%
0%
0.96
Dec-16F
6,501
764.3
534.7
0.17
5.98%
16.92
0.14
4.73%
10.74
23.21
(16.4%)
3.91
23.6%
0%
0.98
Dec-17F
6,750
730.1
579.5
0.19
8.39%
15.61
0.15
5.12%
11.31
24.71
(11.9%)
3.72
24.4%
0%
1.00
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-5.4
-2.1
-0.6
Absolute
-9.9
-2.4
-13.4
Major shareholders
Temasek
% held
50.8
6.0
5.5
P/BV vs ROE
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
35.0%
30.6%
26.3%
21.9%
17.5%
13.1%
8.8%
4.4%
0.0%
30.0
15.0%
25.0
10.0%
20.0
5.0%
15.0
0.0%
10.0
-5.0%
5.0
-10.0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-15.0%
ROE (rhs)
Dec-13A
6,633
5,233
845
(138)
707
(9)
31
0
730
0
730
(138)
Dec-14A
6,539
5,159
761
(166)
595
(2)
57
0
651
0
651
(114)
Dec-15F
6,302
4,972
744
(146)
599
(11)
50
0
638
0
638
(126)
Dec-16F
6,501
5,128
764
(148)
616
4
54
0
674
0
674
(132)
Dec-17F
6,750
5,325
730
(69)
661
5
56
0
722
0
722
(137)
592
(11)
0
537
(5)
0
512
(8)
0
541
(6)
0
585
(6)
0
581
581
581
532
532
532
504
504
504
535
535
535
580
580
580
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
845
Dec-14A
761
Dec-15F
744
Dec-16F
764
Dec-17F
730
100
(92)
55
(0)
28
242
(21)
(110)
1,057
(282)
10
(84)
98
(258)
(173)
52
(11)
(133)
526
(224)
5
(90)
152
(157)
(472)
17
(11)
(126)
663
(250)
0
0
(13)
(263)
0
0
4
(132)
635
(250)
0
0
5
(245)
0
0
5
(137)
626
(250)
0
0
(10)
(260)
0
0
(521)
(499)
(429)
(428)
(464)
(642)
158
627
840
(954)
(586)
(104)
403
(429)
(29)
400
455
(428)
(38)
390
443
(464)
(98)
366
421
266
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
1,930
1,873
1,808
151
5,761
1,520
628
638
158
2,945
433
Dec-14A
1,471
1,927
1,802
126
5,326
1,578
606
671
139
2,993
74
Dec-15F
1,442
1,809
1,727
126
5,104
1,682
669
671
139
3,161
74
Dec-16F
1,404
1,884
1,786
126
5,201
1,784
718
671
139
3,312
74
Dec-17F
1,306
1,918
1,852
126
5,203
1,965
784
671
139
3,559
74
2,484
1,177
4,094
631
2,477
1,166
3,716
926
2,424
1,139
3,636
926
2,502
1,155
3,731
926
2,597
1,161
3,832
926
1,627
2,258
95
6,447
2,116
144
2,260
1,304
2,230
108
6,055
2,132
132
2,265
1,246
2,172
108
5,917
2,208
140
2,348
1,286
2,212
108
6,051
2,315
147
2,462
1,312
2,238
108
6,179
2,431
153
2,583
Dec-13A
3.97%
0.83%
12.7%
0.28
0.68
9.10
18.9%
89.7%
65.84
486.0
218.8
30.3%
22.8%
7.16%
Dec-14A
(1.41%)
(9.99%)
11.6%
0.15
0.68
13.17
17.5%
93.8%
71.58
477.1
223.2
19.9%
18.8%
6.32%
Dec-15F
(3.63%)
(2.18%)
11.8%
0.14
0.71
10.85
19.7%
85.0%
74.08
484.1
221.8
19.1%
18.8%
6.29%
Dec-16F
3.15%
2.71%
11.8%
0.13
0.74
11.54
19.7%
80.0%
70.99
468.5
216.9
19.7%
19.2%
6.41%
Dec-17F
3.84%
(4.47%)
10.8%
0.10
0.78
12.05
19.0%
80.0%
70.94
466.0
214.7
20.1%
19.9%
6.73%
Dec-13A
3.4%
N/A
31.7%
N/A
6.6%
25.4%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
-0.8%
N/A
31.5%
N/A
-4.1%
24.7%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
0.4%
N/A
31.7%
N/A
9.0%
27.9%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
5.0%
N/A
33.0%
N/A
10.0%
29.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
3.5%
N/A
33.6%
N/A
0.0%
5.4%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
267
Company Note
Singapore
Moving along
Current price:
Target price:
Previous target:
Up/downside:
S$0.77
S$0.87
S$0.87
12.4%
Reuters:
Bloomberg:
Market cap:
STHL.SI
SGREIT SP
US$1,189m
S$1,680m
US$0.74m
S$1.04m
2,181m
54.1%
105.3
0.700
100.1
0.600
8
6
4
2
95.0
Vol m
110.4
0.800
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.5
2.0
0.900
Dec-14
Well located portfolio; overseas exposure account for 33-40% of asset value and
revenue.
No change
Price Close
3M
3.4
3.7
12M
-4.4
8.4
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Jun-14A
198.9
158.4
184.1
106.8
0.052
1.88%
14.70
0.042
5.45%
31.1%
0.93
0.83
5.79%
Jun-15A
197.1
158.9
116.8
108.8
0.051
(2.24%)
15.03
0.034
4.38%
35.4%
0.91
0.85
5.56%
Jun-16F
221.5
173.2
114.0
111.8
0.052
2.01%
14.74
0.051
6.65%
35.3%
0.91
0.85
5.74%
0.97
Jun-17F
227.6
176.9
117.6
117.0
0.054
3.19%
14.28
0.054
6.97%
35.3%
0.91
0.85
5.92%
0.98
Jun-18F
235.0
182.5
123.0
122.0
0.056
4.59%
13.66
0.056
7.26%
35.3%
0.91
0.85
6.19%
1.02
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
2.0
3.7
8.4
Absolute
-2.5
3.4
-4.4
Major shareholders
YTL Corp Bhd
AIA Co. Ltd
% held
37.1
8.8
1.200
40.0%
0.0600
8.00%
1.000
33.3%
0.0500
6.67%
0.800
26.7%
0.0400
5.33%
0.600
20.0%
0.0300
4.00%
0.400
13.3%
0.0200
2.67%
0.200
6.7%
0.0100
1.33%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
0.0000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.00%
DPS (lhs)
Jun-14A
198.9
0.0
198.9
(40.5)
158.4
0.0
(14.6)
(3.0)
0.0
140.7
0.0
140.7
(30.0)
0.0
0.0
74.5
185.3
(1.3)
0.0
0.0
184.1
106.8
Jun-15A
197.1
0.0
197.1
(38.2)
158.9
0.0
(15.0)
(3.0)
0.0
140.9
0.0
140.9
(30.3)
0.0
0.0
5.8
116.4
0.4
0.0
0.0
116.8
108.8
Jun-16F
221.5
0.0
221.5
(48.3)
173.2
0.0
(15.0)
(3.0)
0.0
155.2
0.0
155.2
(35.9)
0.0
0.0
0.0
119.3
(5.4)
0.0
0.0
114.0
111.8
Jun-17F
227.6
0.0
227.6
(50.7)
176.9
0.0
(15.0)
(3.0)
0.0
159.0
0.0
159.0
(35.7)
0.0
0.0
0.0
123.3
(5.7)
0.0
0.0
117.6
117.0
Jun-18F
235.0
0.0
235.0
(52.4)
182.5
0.0
(15.0)
(3.0)
0.0
164.6
0.0
164.6
(35.6)
0.0
0.0
0.0
128.9
(6.0)
0.0
0.0
123.0
122.0
Jun-14A
185.3
30.0
3.2
(3.0)
(74.0)
141.5
(2.8)
(141.0)
9.5
(134.4)
121.5
0.0
(107.4)
(32.3)
(18.2)
(11.1)
7.9
97.1
Jun-15A
116.4
30.3
2.9
(2.5)
(5.1)
142.0
(2.5)
(218.0)
9.3
(211.1)
205.9
0.0
(109.6)
(29.7)
66.7
(2.5)
(68.1)
108.1
Jun-16F
119.3
35.9
15.6
(5.4)
0.0
165.5
(0.3)
(8.9)
2.5
(6.7)
8.1
0.0
(111.8)
(37.0)
(140.7)
18.1
159.8
130.9
Jun-17F
123.3
35.7
1.5
(5.7)
0.0
154.7
(0.3)
(4.3)
2.1
(2.5)
3.5
0.0
(117.0)
(37.1)
(150.6)
1.6
153.6
120.0
Jun-18F
128.9
35.6
1.7
(6.0)
0.0
160.4
(0.3)
(0.8)
2.2
1.1
0.0
0.0
(122.0)
(37.1)
(159.1)
2.4
162.9
125.8
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
269
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Jun-14A
2,941
11
10
2,962
56
0
9
0
64
41
84
2
127
856
42
898
2,001
0
Jun-16F
3,125
11
13
3,149
70
0
5
0
75
53
147
2
202
990
47
1,037
1,985
0
Jun-17F
3,128
11
14
3,154
71
0
5
0
77
54
147
2
204
993
48
1,041
1,986
0
Jun-18F
3,129
11
15
3,155
74
0
5
0
79
56
147
2
206
993
49
1,042
1,987
0
1,983
1,985
1,986
1,987
Jun-14A
3.0%
3.56%
79.6%
(10.5%)
4.58
0.68%
58.0%
0.51
0.51
0.44
6.25%
Jun-15A
(0.9%)
0.32%
80.6%
(19.5%)
4.50
0.00%
93.2%
0.31
0.31
0.28
3.81%
Jun-16F
12.4%
9.02%
78.2%
51.8%
4.20
4.50%
98.1%
0.37
0.37
0.34
3.55%
Jun-17F
2.8%
2.17%
77.7%
4.7%
4.29
4.64%
99.5%
0.38
0.38
0.35
3.64%
Jun-18F
3.2%
3.16%
77.7%
4.3%
4.44
4.62%
99.2%
0.38
0.38
0.36
3.80%
Jun-14A
11.7
N/A
N/A
1,681
97.6%
N/A
N/A
Jun-15A
11.9
N/A
N/A
2,273
93.9%
N/A
N/A
Jun-16F
12.0
N/A
N/A
2,273
93.4%
N/A
N/A
Jun-17F
12.3
N/A
N/A
2,273
93.7%
N/A
N/A
Jun-18F
12.7
N/A
N/A
2,273
93.9%
N/A
N/A
2,001
Jun-15A
3,116
11
9
3,137
52
0
5
0
57
37
146
2
185
983
42
1,025
1,983
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
270
Company Note
Singapore
Starhub
Current price:
Target price:
Previous target:
Up/downside:
S$3.58
S$3.80
S$3.80
6.1%
Reuters:
Bloomberg:
Market cap:
STAR.SI
STH SP
US$4,379m
S$6,186m
US$3.81m
S$5.37m
2,826m
33.2%
Price Close
3.80
98.0
3.30
8
6
4
2
93.0
Vol m
103.0
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
StarHubs mobile business is at risk of being impacted from FY17 onwards by the
potential entry of a fourth mobile operator.
Impact should be lesser vs. M1, as the mobile business accounts for a smaller 56%
of StarHubs total service revenue and given its ability to bundle quad-play services.
Annual DPS should stay at S$0.20 in FY15-17. Special dividends are unlikely.
Maintain Hold with unchanged DCF-based target price of S$3.80. Scenario analysis
suggest a target price of S$3.00 in bear case and S$4.25 in bull case.
4.30
Dec-14
1M
-2.5
2.0
3M
-0.8
-0.5
12M
-11.8
1.0
We have factored in a negative 15% impact to StarHubs mobile ARPU between mid2017 and 2020. The impact could be worse if the new entrant employs more aggressive
pricing strategies, or lesser if the new entrants execution is poor (network, branding).
Our sensitivity analysis suggests that our target price for StarHub would fall to S$3.00 if
its mobile ARPU is negatively impacted by 30% (bear-case) by FY20. If the negative
impact on its mobile ARPU is only 5% (bull-case), our target price would be at S$4.25.
[X]
Financial Summary
Analyst
FOONG Choong Chen, CFA
T (60) 3 2261 9081
E choongchen.foong@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Operating EBITDA Margin
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
2,370
743.0
31.4%
379.5
0.22
5.52%
16.29
0.20
5.59%
8.86
22.36
480%
601%
Dec-14A
2,387
747.9
31.3%
370.5
0.21
(2.56%)
16.72
0.20
5.59%
8.83
19.76
272%
320%
Dec-15F
2,444
776.3
31.8%
386.4
0.22
4.17%
16.05
0.20
5.59%
8.51
19.51
212%
228%
0%
1.05
Dec-16F
2,461
791.0
32.1%
375.0
0.22
(2.96%)
16.54
0.20
5.59%
8.35
19.01
183%
183%
0%
1.02
Dec-17F
2,526
807.7
32.0%
391.8
0.23
4.49%
15.83
0.20
5.59%
8.03
13.40
106%
161%
0%
1.07
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
P/BV vs ROE
250
1,200%
25.0
25.0%
200
960%
20.0
16.0%
% held
150
720%
15.0
7.0%
49.2
100
480%
10.0
-2.0%
NTT Communication
10.1
50
240%
5.0
-11.0%
0%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-20.0%
Relative
Absolute
Major shareholders
Temasek Capital
2.0
-2.5
-0.5
-0.8
1.0
-11.8
7.5
0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
ROE (rhs)
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-13A
2,370
693
743
(270)
474
(16)
0
0
458
Dec-14A
2,387
701
748
(271)
477
(21)
0
0
456
Dec-15F
2,444
727
776
(290)
486
(21)
0
0
466
Dec-16F
2,461
791
791
(319)
472
(21)
0
0
452
Dec-17F
2,526
808
808
(316)
492
(20)
0
0
472
458
(78)
456
(86)
466
(79)
452
(77)
472
(80)
380
0
371
0
386
0
375
0
392
0
380
380
380
371
371
371
386
386
386
375
375
375
392
392
392
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
743.0
(17.5)
Dec-14A
747.9
8.1
Dec-15F
776.3
0.0
0.0
Dec-16F
791.0
0.0
0.0
Dec-17F
807.7
0.0
0.0
(41.8)
(18.8)
(89.0)
575.9
(302.8)
0.6
0.0
2.8
(299.4)
0.0
0.8
(35.8)
(22.6)
(65.3)
632.3
(321.6)
0.8
0.0
2.0
(318.8)
0.0
0.6
(41.0)
(22.6)
(79.1)
633.5
(317.7)
0.0
0.0
2.0
(315.7)
0.0
0.0
8.0
(22.6)
(76.8)
699.6
(295.3)
0.0
0.0
(78.0)
(373.3)
0.0
0.0
8.0
(22.6)
(80.2)
712.9
(252.6)
0.0
0.0
2.5
(250.1)
0.0
0.0
(344.2)
(345.2)
(345.1)
(345.1)
(345.1)
2.5
(340.9)
(64.4)
276.5
295.3
5.6
(339.0)
(25.5)
313.5
336.1
7.4
(337.7)
(19.8)
317.8
340.4
(2.6)
(347.7)
(21.4)
326.3
348.9
(22.6)
(367.7)
95.1
462.7
485.3
272
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
291
124
43
154
612
857
0
381
0
1,238
0
Dec-14A
282
162
42
186
672
911
0
405
0
1,316
200
Dec-15F
284
125
45
186
640
971
0
372
0
1,343
200
Dec-16F
286
158
40
186
670
980
0
419
0
1,400
200
Dec-17F
403
126
47
186
763
950
0
387
0
1,337
200
754
148
902
688
796
197
1,193
488
746
197
1,144
488
721
197
1,118
488
757
197
1,154
488
21
709
157
1,767
83
0
83
7
495
151
1,838
149
0
149
7
495
154
1,792
190
0
190
7
495
236
1,849
220
0
220
7
495
184
1,833
267
0
267
Dec-13A
(2.15%)
3.22%
31.4%
(0.23)
0.05
25.19
17.0%
91.1%
20.47
7.76
161.3
64.9%
52.5%
21.5%
Dec-14A
0.74%
0.66%
31.3%
(0.23)
0.09
21.09
18.8%
93.5%
21.80
9.27
167.7
58.9%
50.0%
20.2%
Dec-15F
2.37%
3.79%
31.8%
(0.23)
0.11
21.51
17.0%
89.7%
21.38
9.27
164.0
56.6%
48.4%
20.3%
Dec-16F
0.69%
1.89%
32.1%
(0.23)
0.13
20.90
17.0%
92.4%
21.01
9.29
160.8
51.9%
43.6%
19.4%
Dec-17F
2.65%
2.12%
32.0%
(0.16)
0.15
21.78
17.0%
88.4%
20.55
9.27
156.9
47.2%
43.3%
19.6%
Dec-13A
2.35
N/A
0.45
0.53
35.5
N/A
35
41.6
Dec-14A
2.15
N/A
0.47
0.54
36.1
N/A
28
41.0
Dec-15F
2.17
N/A
0.49
0.55
35.4
N/A
24
38.0
Dec-16F
2.24
N/A
0.50
0.55
34.3
N/A
23
37.2
Dec-17F
2.29
N/A
0.50
0.56
33.3
N/A
23
38.2
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Broadband competition has stabilised
Group Mobile Subscribers (m)
Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)
273
Company Note
Singapore
Straco Corporation
Current price:
Target price:
Previous target:
Up/downside:
S$0.86
S$1.00
S$1.00
16.5%
Reuters:
Bloomberg:
Market cap:
STRA.SI
STCO SP
US$517.8m
S$731.5m
US$0.01m
S$0.02m
847.5m
18.1%
Price Close
STCO has strong operating cashflow generation, with sufficient net cash of S$64m
to fund redevelopment of the retail terminal at the Singapore Flyer (S$20m-30m).
Strong operating leverage as c.80% of its costs for its aquariums are fixed.
Maintain Add, with a DCF-based target price of S$1.00 (12% WACC).
Shanghai Disneyland is slated to open in the spring of 2016, and is expected to receive
7m-10m visitors annually. This compares to the 7.5m and 14.2m visitors that Hong Kong
Disneyland and Paris Disneyland received, respectively, in 2014. We expect the opening
of Shanghai Disneyland to drive stronger visitation at Shanghai Ocean Aquarium (SOA)
in 2H16.
149.0
1.000
129.0
0.800
109.0
0.600
2
2
1
1
89.0
We have factored in a 15% ticket price hike at SOA and a 12.5% price hike at UWX in
2017, in line with previous price hikes. We expect this to be the key reason driving
17.5% earnings growth in FY17. We view the ticket price hikes as the key catalyst to
look out for, as the entire amount of the price hike will flow through to the bottomline.
Vol m
1.200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
-4.5
-5.3
12M
14.0
27.5
Redevelopment plans for the retail terminal of the Flyer remain underway, with
construction expected to commence in 2016. The development cost is estimated at
S$20m-30m which can be funded via internal cash. As at end-3Q15, STCO has net
cash of S$64.0m. We also expect better rental income at the Flyer post-redevelopment,
which we have yet to factor in our forecast, pending details on the redevelopment plans.
Maintain Add
We maintain our Add call with an unchanged DCF-based target price of S$1.00 (WACC:
12%). STCO remains a beneficiary of rising domestic consumption and demand for
travel in China. We continue to like it for its strong operating cashflow generation and
operating leverage, as c.80% of its costs for its aquariums are fixed. The key catalyst to
look out for is the ticket price hike in FY17. Its dividend yield of 3% is also decent.
[X]
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Normalised EPS (S$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-13A
72.8
48.6
34.10
0.040
74.4%
21.23
0.020
2.34%
12.66
52.19
(65.9%)
4.48
23.4%
Dec-14A
92.3
57.1
37.69
0.044
9.9%
19.17
0.020
2.34%
12.50
NA
(9.8%)
3.88
21.7%
Dec-15F
127.8
82.2
49.72
0.058
30.5%
14.65
0.025
2.92%
8.30
12.74
(26.6%)
3.34
24.5%
0%
1.00
Dec-16F
134.8
88.5
54.26
0.063
9.1%
13.50
0.028
3.22%
7.39
14.34
(34.9%)
2.91
23.0%
0%
1.01
Dec-17F
156.2
101.3
63.75
0.074
17.5%
11.49
0.030
3.51%
5.95
9.73
(47.4%)
2.51
23.4%
0%
1.01
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
2.8
-5.3
27.5
Absolute
-1.7
-4.5
Major shareholders
14.0
% held
37.4
22.5
17.1
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
30.0%
27.0%
24.0%
21.0%
18.0%
15.0%
12.0%
9.0%
6.0%
3.0%
0.0%
100%
87%
73%
60%
47%
33%
20%
7%
-7%
-20%
ROE (rhs)
Dec-13A
72.8
72.8
48.6
(3.9)
44.7
3.2
0.0
2.3
50.3
Dec-14A
92.3
92.3
57.1
(4.5)
52.5
3.2
0.0
2.0
57.6
Dec-15F
127.8
127.8
82.2
(11.2)
70.9
1.1
0.0
1.9
74.0
Dec-16F
134.8
134.8
88.5
(11.6)
76.8
1.9
0.0
2.0
80.7
Dec-17F
156.2
156.2
101.3
(11.6)
89.7
2.8
0.0
2.3
94.9
50.3
(14.9)
57.6
(18.4)
74.0
(21.5)
80.7
(23.4)
94.9
(27.5)
35.4
(1.3)
39.3
(1.6)
52.5
(2.8)
57.3
(3.1)
67.4
(3.6)
34.1
35.4
34.1
37.7
39.3
37.7
49.7
52.5
49.7
54.3
57.3
54.3
63.8
67.4
63.8
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
48.6
Dec-14A
57.1
Dec-15F
82.2
Dec-16F
88.5
Dec-17F
101.3
1.3
(3.1)
1.7
0.3
1.0
(3.3)
(2.3)
3.2
(14.3)
33.3
(1.4)
(3.3)
1.7
3.2
(20.7)
34.9
(1.2)
(2.9)
0.0
1.1
(21.5)
60.6
(6.4)
(3.7)
0.0
1.9
(23.4)
63.6
(16.2)
(4.6)
0.0
2.8
(27.5)
73.0
(2.3)
(18.0)
(19.5)
(111.8)
(113.1)
2.9
(3.5)
3.7
(12.5)
4.6
2.3
0.4
(0.1)
(11.8)
0.8
(0.6)
(18.2)
0.0
0.0
(16.9)
0.0
0.0
(21.7)
0.0
0.0
(23.8)
2.1
(9.5)
4.4
13.9
13.9
96.2
78.3
0.1
(78.2)
(78.0)
0.0
(16.9)
40.2
57.2
58.9
0.0
(21.7)
29.4
51.1
52.9
0.0
(23.8)
51.5
75.3
77.1
275
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
108.1
4.1
1.0
21.7
134.8
47.1
0.0
1.4
0.0
48.5
0.0
Dec-14A
112.5
3.9
2.8
1.4
120.6
139.6
49.9
4.6
0.0
194.1
19.5
Dec-15F
147.1
5.4
3.9
1.4
157.8
134.8
49.9
4.6
0.0
189.3
12.0
Dec-16F
178.6
5.7
4.1
1.4
189.8
139.3
49.9
4.6
0.0
193.8
12.0
Dec-17F
232.4
6.6
4.7
1.4
245.2
130.1
49.9
4.6
0.0
184.6
12.0
10.2
7.0
17.2
0.0
11.1
2.7
33.2
73.9
15.4
2.7
30.0
73.9
16.2
2.7
30.9
73.9
18.8
2.7
33.4
73.9
0.2
0.2
1.9
19.3
160.9
3.1
164.0
0.2
74.1
13.1
120.3
186.6
7.7
194.4
0.2
74.1
13.1
117.1
219.4
10.5
230.0
0.2
74.1
13.1
118.0
252.0
13.6
265.6
0.2
74.1
13.1
120.5
292.0
17.2
309.2
Dec-13A
32.0%
57.4%
66.8%
0.13
0.19
22,342
29.6%
49.4%
17.30
N/A
N/A
91.9%
31.7%
19.7%
Dec-14A
26.7%
17.3%
61.8%
0.02
0.22
322
31.9%
45.0%
15.87
N/A
N/A
75.1%
23.9%
14.7%
Dec-15F
38.4%
44.0%
64.3%
0.07
0.26
40
29.0%
43.1%
13.32
N/A
N/A
42.5%
23.5%
15.6%
Dec-16F
5.5%
7.6%
65.6%
0.11
0.29
43
29.0%
43.4%
15.11
N/A
N/A
48.3%
23.2%
15.3%
Dec-17F
15.9%
14.5%
64.8%
0.17
0.34
50
29.0%
40.3%
14.41
N/A
N/A
54.6%
24.4%
16.0%
Dec-13A
0.0%
32.7%
23.3%
14.9%
13.0%
22.9%
1
1
N/A
Dec-14A
0.0%
20.0%
27.9%
4.9%
24.9%
28.6%
1
1
N/A
Dec-15F
0.0%
12.5%
31.4%
2.5%
-23.0%
22.0%
1
1
N/A
Dec-16F
0.0%
10.0%
34.6%
0.0%
2.0%
22.4%
1
1
N/A
Dec-17F
15.0%
5.0%
36.3%
12.5%
2.0%
22.9%
1
1
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
Outlets #/POS (main prod./serv.)
Outlets #/POS (2ndary prod./serv.)
A&P As % Of Sales
276
Company Note
Singapore
Suntec REIT
Ramping up retail
Current price:
Target price:
Previous target:
Up/downside:
S$1.57
S$1.73
S$1.73
10.4%
Reuters:
Bloomberg:
Market cap:
SUNT.SI
SUN SP
US$2,802m
S$3,958m
US$5.09m
S$7.17m
2,506m
92.6%
Suntec City Mall P3 opened in Jun 2015, boosting SUNs revenue and NPI for 9M15
by 18% yoy and 20% yoy, respectively.
Suntec Malls retail occupancy stood at 96.5% at end-Sep but overall passing rent of
S$12.03 psf/month as at 3QFY15 was lower than it originally anticipated.
Office portfolio continues to enjoy high occupancy, with positive rental reversion.
Park Mall sale and redevelopment are still in the works.
We are wary of the office downcycle, retail leasing risks and earnings vacuum from
the redevelopment of Park Mall. Hence, we maintain our Hold recommendation.
Price Close
Given the ongoing retail headwinds, overall committed passing retail rent of
S$12.0psf/month in 3Q15 was lower than the companys target of S$12.59psf/month.
With only 1.6% of retail net lettable area (NLA) remaining to be renewed for the rest of
2015, we think SUNs 4Q15 earnings will remain steady. Another 27.7% of space is due
to be renewed in FY15, largely from Suntec City Mall P1. We will continue to closely
monitor its renewal activities.
2.00
103.4
1.80
96.3
1.60
89.1
1.40
60
82.0
Committed occupancy for Suntec office towers rose marginally qoq to 99.5% in 3Q15,
with the latest leases securing rents of S$9.21psf/month. Park Malls committed
occupancy stood at 97.8% at end-Sep 2015. With only 1.4% of leases due to expire in
FY15 and another 21.4% in FY16, we think that the office portfolio will be fairly resilient.
Vol m
40
20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.7
0.8
3M
1.9
2.2
12M
-17.4
-4.6
Maintain Hold
We are wary of the office downcycle, even though SUNs office portfolio remains
resilient. This, coupled with retail leasing risk from Phase 1 tenants entering their second
leasing cycle, and earnings vacuum from the redevelopment of Park Mall lead us to
maintain our Hold call, with an unchanged DDM-based target price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
234.1
148.7
353.4
211.2
0.095
(18.2%)
16.55
0.09
5.94%
38.2%
2.13
0.74
4.51%
Dec-14A
282.4
191.6
320.8
230.3
0.094
(0.7%)
16.67
0.09
5.99%
34.8%
2.12
0.74
4.43%
Dec-15F
309.9
205.3
184.0
251.7
0.073
(22.3%)
21.47
0.10
6.35%
35.2%
2.14
0.74
3.44%
1.02
Dec-16F
345.3
233.9
200.8
252.7
0.079
8.4%
19.81
0.10
6.33%
35.2%
2.12
0.74
3.73%
0.99
Dec-17F
362.9
247.1
217.7
269.6
0.085
7.7%
18.40
0.11
6.71%
35.2%
2.10
0.75
4.05%
1.03
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
0.8
2.2
Absolute
-3.7
1.9
Major shareholders
12M
-4.6
-17.4
% held
BLACKROCK INC
7.4
7.1
JINQUAN TONG
4.6
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
39.00%
38.40%
37.80%
37.20%
36.60%
36.00%
35.40%
34.80%
34.20%
33.60%
33.00%
0.1020
0.1000
0.0980
0.0960
0.0940
0.0920
0.0900
0.0880
0.0860
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
DPS (lhs)
6.50%
6.38%
6.25%
6.13%
6.00%
5.88%
5.75%
5.63%
5.50%
Dec-13A
234.1
0.0
234.1
(85.4)
148.7
0.0
(39.6)
(3.1)
0.0
105.9
(15.0)
90.9
(55.3)
171.7
20.1
138.8
366.3
4.7
(17.6)
0.0
353.4
211.2
Dec-14A
282.4
0.0
282.4
(90.8)
191.6
0.0
(43.3)
(19.5)
0.0
128.8
(14.4)
114.4
(44.8)
139.1
19.3
98.0
326.1
(7.0)
1.8
0.0
320.8
230.3
Dec-15F
309.9
0.0
309.9
(104.7)
205.3
0.0
(43.2)
(3.2)
0.0
158.8
(10.0)
148.7
(43.2)
74.2
16.1
0.0
195.9
(7.0)
(4.9)
0.0
184.0
251.7
Dec-16F
345.3
0.0
345.3
(111.4)
233.9
0.0
(43.6)
(3.3)
0.0
187.0
0.0
187.0
(56.4)
80.7
0.0
0.0
211.3
(5.5)
(5.1)
0.0
200.8
252.7
Dec-17F
362.9
0.0
362.9
(115.8)
247.1
0.0
(43.6)
(3.3)
0.0
200.3
0.0
200.3
(61.6)
89.8
0.0
0.0
228.5
(5.6)
(5.2)
0.0
217.7
269.6
Dec-13A
366.3
(101.4)
(1.3)
(4.1)
(108.7)
150.8
0.0
(244.1)
0.0
(244.1)
333.9
0.0
(209.4)
(51.2)
73.3
(20.1)
(70.7)
189.3
Dec-14A
326.1
(79.9)
14.4
(0.0)
(66.1)
194.5
0.0
(96.6)
0.0
(96.6)
(208.2)
341.9
(227.8)
(34.8)
(129.0)
(31.0)
128.7
(145.1)
Dec-15F
195.9
(21.0)
(47.7)
(7.0)
31.9
152.1
(135.2)
211.8
0.0
76.6
73.4
0.0
(251.7)
(36.2)
(214.4)
14.3
272.0
266.0
Dec-16F
211.3
(24.3)
6.7
(5.5)
32.2
220.4
0.0
32.3
0.0
32.3
0.0
0.0
(252.7)
(49.4)
(302.1)
(49.3)
279.7
203.4
Dec-17F
228.5
(28.2)
3.4
(5.6)
32.2
230.2
0.0
89.7
0.0
89.7
0.0
0.0
(269.6)
(54.6)
(324.2)
(4.2)
341.7
265.4
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
278
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Dec-13A
8,045
24
42
8,112
181
0
29
0
210
91
772
21
884
2,406
46
2,453
4,844
141
4,985
Dec-14A
8,320
10
105
8,436
150
0
17
0
166
107
0
23
130
2,996
58
3,054
5,305
113
5,418
Dec-15F
8,433
0
105
8,538
164
0
17
0
181
59
0
23
82
3,069
58
3,127
5,392
118
Dec-16F
8,481
0
105
8,587
114
0
17
0
131
66
0
23
89
3,069
58
3,127
5,379
123
Dec-17F
8,481
0
105
8,587
110
0
17
0
127
69
0
23
92
3,069
58
3,127
5,366
128
5,510
5,502
5,494
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Dec-13A
(10.6%)
(9.0%)
63.5%
(1.71%)
1.17
0.00%
60%
0.24
0.24
0.20
4.40%
Dec-14A
20.6%
28.9%
67.9%
0.77%
1.51
2.15%
72%
1.28
1.28
1.15
3.79%
Dec-15F
9.7%
7.1%
66.2%
6.07%
1.72
3.58%
137%
2.20
2.20
1.99
2.12%
Dec-16F
11.4%
14.0%
67.7%
(0.30%)
2.24
2.61%
126%
1.48
1.48
1.29
2.30%
Dec-17F
5.1%
5.7%
68.1%
5.94%
2.40
2.45%
124%
1.38
1.38
1.19
2.50%
Dec-13A
8.7
N/A
N/A
3,544
86.1%
N/A
N/A
Dec-14A
9.1
N/A
N/A
3,544
87.5%
N/A
N/A
Dec-15F
9.6
N/A
N/A
3,544
95.0%
N/A
N/A
Dec-16F
9.9
N/A
N/A
3,544
98.8%
N/A
N/A
Dec-17F
10.3
N/A
N/A
3,544
99.5%
N/A
N/A
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
279
Company Note
Singapore
Super Group
Current price:
Target price:
Previous target:
Up/downside:
S$0.86
S$0.74
S$0.74
-13.7%
Reuters:
Bloomberg:
Market cap:
SPGP.SI
SUPER SP
US$678.8m
S$959.0m
US$0.49m
S$0.69m
1,152m
26.8%
Super is struggling in both its branded consumer and food ingredient businesses, as
weak end-consumption and currencies have hit earnings.
The regional macro outlook remains poor, and we remain wary about the success of
new product launches in such a climate.
Premiumisation in its food ingredient business was supposed to boost sales in 2015,
but this did not materialise.
Near-term earnings pressure is likely to come from weak sales and increased
marketing spend. Maintain Reduce.
Consumer headwinds
Price Close
1.60
146.0
1.40
132.0
1.20
118.0
1.00
104.0
0.80
90.0
0.60
15
76.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.4
-5.9
3M
13.9
14.2
12M
-23.9
-11.1
The impending rate hike does not bode well for EM currencies and we are wary that a
turnaround will not be forthcoming with US$ strength. 2015 was a year when earnings
were further dampened from translation losses. Its biggest market, Thailand, had to
grapple with slowing domestic consumption. Malaysia and Philippines were down. The
bright spot was Myanmar which remained competitive even with its falling kyat, as Super
benefited from volume growth as it cut prices to compensate for the kyat.
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
557.0
107.8
99.92
0.076
11.8%
11.35
0.045
5.23%
8.10
37.96
(20.2%)
2.05
19.5%
Dec-14A
539.5
87.0
68.76
0.062
(18.7%)
13.95
0.031
3.60%
10.23
17.58
(15.7%)
1.93
14.3%
Dec-15F
493.5
77.4
40.45
0.036
(41.2%)
23.71
0.031
3.60%
11.27
17.65
(19.0%)
1.91
8.1%
0%
0.86
Dec-16F
530.7
93.0
50.95
0.046
26.0%
18.82
0.034
3.97%
9.30
20.29
(20.2%)
1.86
10.0%
0%
0.95
Dec-17F
574.4
98.7
55.16
0.049
8.3%
17.39
0.036
4.17%
8.70
20.64
(20.8%)
1.81
10.6%
0%
0.90
Powered by
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BY THE NUMBERS
1M
3M
12M
Relative
-5.9
14.2
-11.1
Absolute
-10.4
13.9
Major shareholders
Teo & Te Family
P/BV vs ROE
7.00
25.0%
6.00
21.4%
-23.9
5.00
17.9%
% held
4.00
14.3%
33.2
3.00
10.7%
2.00
7.1%
1.00
3.6%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
16.2
11.7
Growth
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
50%
39%
28%
17%
6%
-6%
-17%
-28%
-39%
-50%
ROE (rhs)
Dec-13A
557.0
209.5
107.8
(14.8)
93.0
(0.2)
(2.4)
7.1
97.4
17.1
114.5
(11.1)
Dec-14A
539.5
189.6
87.0
(17.0)
70.0
12.0
(0.6)
0.0
81.3
0.0
81.3
(9.8)
Dec-15F
493.5
169.3
77.4
(24.8)
52.6
3.8
(0.5)
0.0
55.9
0.0
55.9
(14.3)
Dec-16F
530.7
193.1
93.0
(24.4)
68.6
3.3
(0.5)
0.0
71.5
0.0
71.5
(19.3)
Dec-17F
574.4
208.8
98.7
(24.0)
74.7
3.6
(0.5)
0.0
77.8
0.0
77.8
(21.4)
103.4
(3.4)
0.0
71.6
(2.8)
0.0
41.6
(1.2)
0.0
52.2
(1.2)
0.0
56.4
(1.3)
0.0
99.9
84.5
84.5
68.8
68.8
68.8
40.4
40.4
40.4
51.0
51.0
51.0
55.2
55.2
55.2
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
107.8
Dec-14A
87.0
Dec-15F
77.4
Dec-16F
93.0
Dec-17F
98.7
(35.7)
(18.9)
6.4
(9.2)
(12.9)
0.4
0.0
(9.7)
62.8
(48.3)
13.3
0.0
(2.5)
(37.6)
0.0
0.0
0.0
(39.6)
(5.5)
10.2
(10.7)
62.0
(39.6)
4.0
(1.1)
9.2
(27.5)
20.0
0.0
0.0
(50.2)
3.3
3.5
(14.3)
76.3
(22.0)
0.0
0.0
0.0
(22.0)
0.0
0.0
0.0
(36.3)
2.9
3.0
(19.3)
70.4
(23.1)
0.0
0.0
0.0
(23.1)
0.0
0.0
0.0
(38.1)
3.1
3.2
(21.4)
70.7
(24.3)
0.0
0.0
0.0
(24.3)
0.0
0.0
0.0
(40.0)
(2.3)
(41.9)
(16.6)
25.3
25.3
(3.6)
(33.8)
0.8
54.5
34.5
0.0
(36.3)
18.0
54.3
54.3
0.0
(38.1)
9.2
47.3
47.3
0.0
(40.0)
6.4
46.5
46.5
281
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
98.5
123.5
101.6
2.4
326.0
250.6
19.4
3.0
0.0
273.1
0.0
Dec-14A
101.3
124.7
115.1
2.8
343.9
276.3
7.6
3.0
0.3
287.2
20.0
Dec-15F
119.4
97.1
93.3
2.8
312.5
271.5
7.7
3.0
0.3
282.5
20.0
Dec-16F
128.5
103.9
97.1
2.8
332.4
267.1
7.9
3.0
0.3
278.3
20.0
Dec-17F
135.0
111.9
105.2
2.8
354.9
263.1
8.0
3.0
0.3
274.5
20.0
97.5
7.9
105.4
0.0
79.5
7.8
107.3
0.0
36.4
7.8
64.3
0.0
37.9
7.8
65.8
0.0
41.1
7.8
68.9
0.0
0.2
0.2
7.0
112.5
466.9
19.7
486.6
0.0
0.0
6.7
114.1
497.6
19.5
517.0
1.6
1.6
6.8
72.7
501.7
20.7
522.4
1.6
1.6
6.9
74.3
514.5
21.9
536.4
0.7
0.7
7.0
76.5
529.7
23.2
552.9
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Dec-13A
7.27%
9.4%
19.4%
0.09
0.42
N/A
9.7%
60.6%
62.33
96.8
40.40
27.1%
20.3%
15.1%
Dec-14A
(3.15%)
(19.3%)
16.1%
0.07
0.45
N/A
12.0%
50.3%
72.00
113.0
60.70
15.5%
15.8%
10.0%
Dec-15F
(8.52%)
(11.0%)
15.7%
0.09
0.45
N/A
25.5%
89.7%
77.22
117.3
65.23
10.0%
10.3%
6.3%
Dec-16F
7.54%
20.2%
17.5%
0.10
0.46
N/A
27.0%
74.8%
64.83
103.2
40.29
13.4%
12.9%
8.2%
Dec-17F
8.23%
6.1%
17.2%
0.10
0.47
N/A
27.5%
72.5%
64.45
101.0
39.44
14.5%
13.7%
8.6%
Dec-13A
N/A
2.6%
N/A
N/A
N/A
N/A
N/A
17.3%
N/A
N/A
N/A
N/A
Dec-14A
N/A
-3.6%
N/A
N/A
N/A
N/A
N/A
-2.3%
N/A
N/A
N/A
N/A
Dec-15F
N/A
-7.5%
N/A
N/A
N/A
N/A
N/A
-10.4%
N/A
N/A
N/A
N/A
Dec-16F
N/A
6.0%
N/A
N/A
N/A
N/A
N/A
10.5%
N/A
N/A
N/A
N/A
Dec-17F
N/A
7.0%
N/A
N/A
N/A
N/A
N/A
10.5%
N/A
N/A
N/A
N/A
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)
282
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.00
S$1.30
S$1.30
30.3%
Reuters:
Bloomberg:
Market cap:
TALK.SI
TKMED SP
US$465.1m
S$657.1m
US$0.02m
S$0.03m
657.1m
16.0%
Price Close
1.200
123.6
1.100
114.7
1.000
105.8
0.900
96.9
0.800
600
88.0
Vol th
400
200
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Long-term healthcare business model with OPM of c.70% and minimal capex
needs.
No change.
Dec-14
1M
-1.0
3.5
3M
-1.0
-0.7
12M
4.2
17.0
Besides riding on the increasing incidence of cancer in the region, Talkmed is also a
medical tourism play with over 50% of revenue contributed by foreign patients, mainly
from Indonesia, Malaysia and Vietnam. We see further opportunities from the Asean
Economic Community (AEC) to benefit the company in the long run, but the stronger S$
against regional currencies will be a key pushback for medical tourists in the near term,
should this trend persist.
[X]
Financial Summary
Analysts
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
NGOH Yi Sin
T (65) 6210 8604
E yisin.ngoh@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
56.30
38.58
28.23
0.055
(4.92%)
18.16
0.063
6.34%
13.66
13.33
(194%)
43.12
244%
Dec-14A
63.17
46.36
38.66
0.060
8.22%
16.78
0.046
4.57%
12.90
20.80
(102%)
13.21
124%
Dec-15F
62.80
45.15
38.15
0.058
(2.58%)
17.23
0.040
4.01%
13.25
15.56
(101%)
11.23
70%
0%
1.00
Dec-16F
64.01
46.34
38.93
0.059
2.05%
16.88
0.042
4.24%
12.70
14.64
(101%)
9.69
62%
0%
1.00
Dec-17F
67.23
48.68
40.47
0.062
3.98%
16.23
0.047
4.68%
11.88
13.85
(101%)
8.42
55%
0%
0.99
Powered by
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BY THE NUMBERS
1M
3.5
-1.0
Major shareholders
Ladyhill Holdings Pte Ltd
3M
-0.7
-1.0
12M
17.0
4.2
P/BV vs ROE
35.0
400%
30.0
343%
25.0
286%
25.0
10.0%
20.0
6.8%
3.6%
% held
20.0
229%
15.0
65.4
15.0
171%
10.0
0.4%
10.0
114%
5.0
-2.8%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-6.0%
7.6
7.5
5.0
57%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0%
ROE (rhs)
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-13A
56.30
56.30
38.58
(0.01)
38.57
0.00
0.00
0.01
38.58
(2.75)
35.83
(7.60)
28.23
0.00
0.00
0.00
0.00
28.23
30.40
30.40
Dec-14A
63.17
63.17
46.36
(0.01)
46.36
0.14
0.00
0.23
46.72
0.00
46.72
(8.06)
38.66
0.00
0.00
0.00
0.00
38.66
38.66
38.66
Dec-15F
62.80
62.80
45.15
(0.01)
45.15
0.00
0.00
0.20
45.35
0.00
45.35
(7.20)
38.15
0.00
0.00
0.00
0.00
38.15
38.15
38.15
Dec-16F
64.01
64.01
46.34
(0.01)
46.33
0.00
0.00
0.20
46.53
0.00
46.53
(7.61)
38.93
0.00
0.00
0.00
0.00
38.93
38.93
38.93
Dec-17F
67.23
67.23
48.68
(0.01)
48.67
0.00
0.00
0.20
48.87
0.00
48.87
(8.39)
40.47
0.00
0.00
0.00
0.00
40.47
40.47
40.47
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
38.58
3.00
6.91
0.00
0.00
Dec-14A
46.36
4.00
(11.97)
0.00
0.00
Dec-15F
45.15
5.00
0.18
0.00
0.00
Dec-16F
46.34
6.00
(0.26)
0.00
0.00
Dec-17F
48.68
7.00
(0.62)
0.00
0.00
0.00
(7.03)
41.47
(0.06)
0.00
0.00
0.00
(0.06)
0.00
0.00
0.00
(27.50)
0.00
0.00
(27.50)
13.91
41.41
41.41
(0.14)
(7.07)
31.19
0.00
0.00
0.00
0.00
0.00
0.00
20.00
0.00
(21.49)
0.00
0.00
(1.49)
29.70
31.19
31.19
0.00
(8.10)
42.24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(26.37)
0.00
0.00
(26.37)
15.87
42.24
42.24
0.00
(7.20)
44.88
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(27.85)
0.00
0.00
(27.85)
17.03
44.88
44.88
0.00
(7.61)
47.45
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(30.74)
0.00
0.00
(30.74)
16.71
47.45
47.45
284
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
24.89
7.47
0.00
0.00
32.37
0.05
0.00
0.00
0.00
0.05
0.00
0.00
8.03
11.59
19.62
0.00
0.00
0.00
0.00
0.00
19.62
12.80
0.00
12.80
Dec-14A
50.90
9.18
0.00
0.00
60.07
0.03
0.00
0.00
0.00
0.03
0.00
0.00
1.33
9.01
10.34
0.00
0.00
0.00
0.00
0.00
10.34
49.76
0.00
49.76
Dec-15F
58.97
8.26
0.00
0.00
67.22
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
7.70
8.70
0.00
0.00
0.00
0.00
0.00
8.70
58.52
0.00
58.52
Dec-16F
68.40
8.42
0.00
0.00
76.81
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
8.01
9.01
0.00
0.00
0.00
0.00
0.00
9.01
67.81
0.00
67.81
Dec-17F
78.81
8.84
0.00
0.00
87.65
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
8.59
9.59
0.00
0.00
0.00
0.00
0.00
9.59
78.05
0.00
78.05
Dec-13A
8.6%
0.2%
68.5%
0.05
0.02
N/A
21.2%
113%
43.79
N/A
N/A
(828%)
310%
112%
Dec-14A
12.2%
20.2%
73.4%
0.08
0.08
N/A
17.2%
78%
48.11
N/A
N/A
(383%)
149%
83%
Dec-15F
(0.6%)
(2.6%)
71.9%
0.09
0.09
N/A
15.9%
69%
50.67
N/A
N/A
(3981%)
83%
60%
Dec-16F
1.9%
2.6%
72.4%
0.10
0.10
N/A
16.3%
72%
47.68
N/A
N/A
(10497%)
73%
54%
Dec-17F
5.0%
5.0%
72.4%
0.12
0.12
N/A
17.2%
76%
46.85
N/A
N/A
(8268%)
67%
49%
Key Ratios
Consistently high margins as a result
of high trade barriers to entry and
Talkmed being a services-oriented
business.
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
285
Company Note
Singapore
Thai Beverage
Current price:
Target price:
Previous target:
Up/downside:
S$0.70
S$0.83
S$0.83
19.1%
Reuters:
Bloomberg:
Market cap:
TBEV.SI
THBEV SP
US$12,352m
S$17,451m
US$4.18m
S$5.89m
29,000m
33.0%
The investment thesis of Thai Beverage was all about an aspiring regional F&B
player, with ambitions funded by the free cash flow of its spirits monopoly business.
Beer has shown promising signs early in 2015, as prior rebranding efforts have
culminated in price hikes that was closed Changs prices to key competitor Leo.
2016 will show the effect of the rebranding effort to collapse sub-brands into one
and launch Chang globally.
100Plus sales in Thailand should gain traction and help gain CSD market share.
Our only worry is initial signs of weakness in spirits, a staple product. Maintain Add,
with unchanged sum-of-parts target price of S$0.83
Beer has shown promising signs in 2015 and will go global in 2016
3Q beer sales was understandably weak because of a rebranding effort. Prior to that,
beer sales and profitability was consistently improving, on the back of hiked prices,
better logistics and growing export sales. The collapsing of four sub-brands into one is
part of its plan to build a single, global brand. 2016 will see the execution of plans to
launch Chang Classic into Singapore, Hong Kong, the UK, US and Australia.
0.800
115.0
0.750
109.0
0.700
103.0
0.650
97.0
0.600
100
91.0
Vol m
0.850
50
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.2
6.7
3M
0.0
0.3
12M
-3.5
9.3
Non-alcoholic should gradually do better. There were initial positive signs for 100Plus
launch in Thailand in 1H15, but that fizzled out in the seasonally weak 3Q. A quarter
should not be deemed as a trend. Over time, if 100Plus does well in Thailand. It will help
Thai Bev achieve dominance in the carbonated soft drink (CSD) market as well. Better
utilization of Serm Suks currently under-utilised capacity, will shore up profits.
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
155,771
25,058
18,739
0.75
328%
23.70
0.44
2.49%
16.95
9.68
53.5%
4.71
21.3%
Dec-14A
162,040
29,828
23,570
0.94
26%
18.84
0.61
3.45%
13.87
20.07
32.3%
4.39
24.1%
Dec-15F
168,135
28,089
28,211
1.12
20%
15.74
0.65
3.68%
14.01
14.95
14.1%
3.92
26.3%
0%
1.15
Dec-16F
177,904
30,813
25,059
1.00
(11%)
17.72
0.68
3.85%
12.49
21.79
6.2%
3.65
21.3%
0%
0.99
Dec-17F
189,493
32,693
26,894
1.07
7%
16.51
0.70
3.96%
11.48
20.89
(1.3%)
3.39
21.3%
0%
1.02
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
6.7
0.3
9.3
Absolute
2.2
0.0
Major shareholders
-3.5
% held
45.3
MM Group Ltd
20.6
2.0
P/BV vs ROE
6.00
30.0%
5.00
25.0%
4.00
20.0%
3.00
15.0%
2.00
10.0%
1.00
5.0%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.0%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
350.0%
293.8%
237.5%
181.3%
125.0%
68.8%
12.5%
-43.8%
-100.0%
ROE (rhs)
Dec-13A
155,771
43,737
25,058
(3,933)
21,125
(2,251)
3,434
795
23,104
0
23,104
(4,236)
Dec-14A
162,040
47,330
29,828
(3,986)
25,842
(1,447)
3,389
600
28,383
0
28,383
(4,552)
Dec-15F
168,135
50,058
28,089
(3,929)
24,160
(903)
8,311
690
32,258
0
32,258
(3,976)
Dec-16F
177,904
52,765
30,813
(3,929)
26,884
(753)
3,734
700
30,565
0
30,565
(5,433)
Dec-17F
189,493
56,073
32,693
(3,929)
28,764
(603)
3,920
711
32,792
0
32,792
(5,821)
18,868
(128)
23,831
(261)
28,282
(71)
25,132
(74)
26,971
(77)
18,739
18,739
18,739
23,570
23,570
23,570
28,211
28,211
28,211
25,059
25,059
25,059
26,894
26,894
26,894
Dec-13A
25,058
Dec-14A
29,828
Dec-15F
28,089
Dec-16F
30,813
Dec-17F
32,693
(4,848)
(1,013)
1,473
(1,936)
(2,273)
127
(2,251)
(5,005)
13,082
(4,824)
(2,961)
(1,447)
(4,884)
19,522
(4,763)
4,060
(903)
(3,976)
28,743
(3,500)
(3,273)
(753)
(5,433)
19,418
(3,500)
(3,698)
(603)
(5,821)
20,297
(3,500)
37,622
32,798
7,370
2,607
4,465
965
4,465
965
4,465
965
(10,546)
(11,300)
(16,322)
(17,075)
(17,577)
(40,602)
(51,148)
(5,269)
45,880
48,199
(18,521)
(29,820)
(7,691)
22,130
23,683
(6,115)
(22,436)
7,272
29,708
30,861
(12,000)
(29,075)
(8,692)
20,383
21,386
(12,000)
(29,577)
(8,315)
21,262
22,115
Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
287
BY THE NUMBERS
Balance Sheet
(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
5,108
4,508
34,837
5,271
49,724
46,827
75,558
7,213
4,008
133,606
2,167
Dec-14A
2,230
4,291
35,084
5,462
47,068
46,251
67,614
7,194
3,860
124,919
8,536
Dec-15F
13,478
3,685
33,967
536
51,667
42,121
70,435
7,197
3,866
123,619
2,377
Dec-16F
10,219
3,899
35,999
536
50,654
41,692
70,391
7,197
3,866
123,146
2,377
Dec-17F
7,725
4,153
38,381
536
50,796
41,263
70,281
7,197
3,866
122,607
2,377
9,142
14,922
26,230
55,343
9,181
18,319
36,036
27,555
9,389
15,088
26,853
27,600
9,699
17,167
29,242
15,600
10,062
18,946
31,385
3,600
2,448
57,791
1,315
85,336
94,286
3,707
97,993
2,755
30,310
965
67,311
101,263
3,414
104,676
2,755
30,355
1,374
58,582
113,361
3,343
116,704
2,755
18,355
1,374
48,971
121,559
3,269
124,828
2,755
6,355
1,374
39,114
131,097
3,192
134,289
Dec-13A
(3.27%)
0.0%
16.1%
(2.09)
3.75
9.11
18.3%
59.0%
8.76
110.5
16.80
31.3%
12.4%
11.0%
Dec-14A
4.02%
19.0%
18.4%
(1.35)
4.03
16.64
16.0%
65.0%
8.51
111.2
15.92
38.6%
17.4%
14.4%
Dec-15F
3.76%
(5.8%)
16.7%
(0.66)
4.51
20.95
12.3%
57.9%
7.98
106.7
15.42
36.3%
16.8%
16.9%
Dec-16F
5.81%
9.7%
17.3%
(0.31)
4.84
26.80
17.8%
68.1%
7.80
102.3
15.59
47.3%
18.6%
14.9%
Dec-17F
6.51%
6.1%
17.3%
0.07
5.22
33.72
17.8%
65.4%
7.76
101.7
15.50
51.1%
20.3%
15.9%
Dec-13A
0.0%
7.3%
N/A
N/A
N/A
N/A
Dec-14A
0.0%
4.7%
N/A
N/A
N/A
N/A
Dec-15F
0.0%
2.5%
N/A
N/A
N/A
N/A
Dec-16F
0.0%
4.2%
N/A
N/A
N/A
N/A
Dec-17F
0.0%
4.9%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
(THB)
ASP (% Change)
Unit Sales Growth (%)
Utilisation Rate (%)
A&P Expenses (as % Of Revenue)
Excise Duties (litre)
Sales Tax (%)
288
Company Note
Singapore
US$1.12
US$1.40
US$1.40
25.3%
Reuters:
Bloomberg:
Market cap:
TIAN.SI
TIAN SP
US$2,078m
US$2,078m
US$0.27m
US$0.27m
768.9m
100.0%
No change.
1.20
128
0.70
6
78
Vol m
Flagship product, Su Xiao Jiu Xin Pill, is likely to benefit from the authoritys removal
of the price ceiling for low-priced drugs.
Expansion projects may translate to an additional operating profit of Rmb120m160m in FY18 onwards.
The S-share price of US$1.20 is at a 65% discount to its A-share price at US$3.40.
Maintain Add, with target price of US$1.40 based on CY16 DCF.
1.70
2
Dec-14
Price Close
Tianjin Zhongxins flagship and exclusive product, Su Xiao Jiu Xin Pill, is a household
name in China for the treatment of cardio-vascular ailments. Its sales achieved a fiveyear CAGR of 13% in FY09-14. We believe Su Xiaos high growth is sustainable in the
medium term given the anticipated rising incidence rate of cardiovascular diseases as
the nations population ages (Chinas age distribution currently peaks at 45-50 years).
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.3
0.2
3M
7.7
8.0
12M
12.0
24.8
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (Rmbm)
Operating EBITDA (Rmbm)
Net Profit (Rmbm)
Core EPS (Rmb)
Core EPS Growth
FD Core P/E (x)
DPS (Rmb)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
6,010
497.1
352.3
0.41
14.6%
17.54
0.15
2.09%
12.76
12.59
21.1%
2.20
13.3%
Dec-14A
7,087
498.2
357.8
0.46
11.2%
15.77
0.15
2.09%
10.96
NA
9.9%
1.92
13.0%
Dec-15F
6,988
569.9
425.0
0.43
(6.0%)
16.77
0.15
2.09%
10.34
NA
(7.2%)
1.42
9.7%
0%
0.96
Dec-16F
7,295
557.3
375.4
0.49
13.9%
14.72
0.15
2.09%
9.40
NA
1.7%
1.36
9.5%
0%
0.70
Dec-17F
7,713
632.7
410.6
0.53
9.4%
13.46
0.16
2.23%
7.89
16.01
(3.8%)
1.26
9.7%
0%
1.01
Powered by
EFA
BY THE NUMBERS
1M
0.2
-4.3
3M
8.0
7.7
Major shareholders
12M
24.8
12.0
% held
4.9
4.9
4.7
P/BV vs ROE
3.00
14.00%
25.0
20.0%
2.50
11.67%
20.0
14.0%
2.00
9.33%
15.0
8.0%
1.50
7.00%
1.00
4.67%
10.0
2.0%
0.50
2.33%
5.0
-4.0%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-10.0%
ROE (rhs)
Dec-13A
6,010
1,873
497
(89)
408
(49)
58
0
351
Dec-14A
7,087
2,102
498
(89)
409
(45)
67
0
411
Dec-15F
6,988
2,121
570
(87)
483
(27)
35
0
382
Dec-16F
7,295
2,268
557
(126)
431
(27)
40
0
444
Dec-17F
7,713
2,430
633
(165)
467
(27)
45
0
485
417
(46)
(10)
361
(9)
431
(55)
4
379
(22)
491
(59)
(7)
425
0
444
(69)
0
375
0
485
(75)
0
411
0
352
303
303
358
337
337
425
323
323
375
375
375
411
411
411
Cash Flow
(Rmbm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
497.1
177.9
(139.4)
Dec-14A
498.2
73.6
(160.0)
Dec-15F
569.9
35.0
(42.4)
Dec-16F
557.3
40.0
(59.3)
Dec-17F
632.7
45.0
(65.4)
(12.8)
(46.2)
(43.4)
(81.4)
351.8
(72.4)
60.5
(332.3)
0.0
(344.2)
414.4
6.3
(16.3)
(43.2)
(58.8)
299.8
(70.2)
2.0
96.6
0.0
28.4
(375.0)
0.0
0.0
(0.5)
(26.7)
(66.0)
469.3
(575.5)
0.0
0.0
0.5
(575.0)
(90.1)
0.0
(0.5)
(26.9)
(68.7)
441.9
(614.6)
0.0
0.0
0.5
(614.1)
0.0
0.0
(0.5)
(26.9)
(74.9)
510.0
(165.3)
0.0
0.0
0.5
(164.8)
0.0
(108.0)
(73.8)
(110.9)
(192.2)
(100.0)
9.9
316.3
323.9
422.1
57.4
6.9
(442.0)
(113.8)
(46.8)
377.2
0.0
(201.0)
(306.7)
(195.8)
(72.7)
0.0
(192.2)
(364.4)
(172.2)
(138.9)
0.0
(100.0)
245.1
345.1
378.4
290
BY THE NUMBERS
Balance Sheet
(Rmbm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
745
1,449
817
177
3,188
1,112
877
0
85
2,075
1,289
Dec-14A
631
1,694
860
198
3,382
1,090
877
0
88
2,055
922
Dec-15F
1,125
1,664
901
198
3,888
1,578
877
0
88
2,544
832
Dec-16F
761
1,737
931
198
3,626
2,067
877
0
88
3,032
832
Dec-17F
1,006
1,837
978
198
4,018
2,067
877
0
88
3,032
832
1,319
1,494
1,463
1,507
1,588
2,608
0
2,416
0
2,295
0
2,339
0
2,420
0
75
75
4
2,687
2,417
158
2,575
66
66
9
2,491
2,764
183
2,947
66
66
9
2,370
3,879
183
4,062
66
66
9
2,413
4,062
183
4,245
66
66
9
2,495
4,373
183
4,555
Dec-13A
17.2%
7.0%
7.16%
(0.74)
3.27
6.15
11.1%
37.5%
79.26
70.08
109.5
12.4%
9.9%
7.05%
Dec-14A
17.9%
11.2%
6.75%
(0.39)
3.74
7.64
12.8%
33.2%
80.93
61.38
102.2
12.6%
10.2%
7.29%
Dec-15F
(1.4%)
(3.7%)
6.60%
0.38
5.04
11.33
12.0%
35.7%
87.68
66.04
110.2
11.5%
8.7%
5.78%
Dec-16F
4.4%
20.9%
7.64%
(0.09)
5.28
12.96
15.5%
30.7%
85.31
66.70
107.5
10.9%
8.8%
6.04%
Dec-17F
5.7%
13.5%
8.20%
0.23
5.69
14.05
15.4%
30.0%
84.55
65.96
106.3
10.0%
9.0%
6.28%
Dec-13A
N/A
17.2%
N/A
N/A
N/A
N/A
1.0%
Dec-14A
N/A
17.9%
N/A
N/A
N/A
N/A
1.0%
Dec-15F
N/A
-1.4%
N/A
N/A
N/A
N/A
1.1%
Dec-16F
N/A
4.4%
N/A
N/A
N/A
N/A
1.1%
Dec-17F
N/A
5.7%
N/A
N/A
N/A
N/A
1.1%
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (Rmb)
BVPS (Rmb)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
R&D Cost/sales (%)
291
Company Note
Singapore
Tiger Airways
Current price:
Target price:
Previous target:
Up/downside:
S$0.41
S$0.41
S$0.41
0.0%
Reuters:
Bloomberg:
Market cap:
TAHL.SI
TGR SP
US$725.5m
S$1,025m
US$1.87m
S$2.64m
2,497m
44.2%
We maintain Hold, and our target price which is pegged to the cash offer price, as
we believe there is a strong likelihood of the SIA offer succeeding.
If necessary, we believe that SIA will raise the offer price, as it cannot afford to delay
the execution of its long-term strategic goals
0.320
0.220
150
100
Vol m
The equity cash offer also comes with an option, valid for 15 market days commencing
after the settlement of the cash offer, to subscribe for SIA shares at a price of S$11.1043
per SIA share. This gives an opportunity for Tigers minorities to participate in the SIA
groups future, if they so wish. If not, they can exit entirely from Tiger, at a price which
they are unlikely to obtain from the secondary market in the foreseeable future.
0.420
50
Dec-14
No changes.
Price Close
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.0
4.5
3M
51.9
52.2
12M
49.1
61.9
Go for it
Our advice to Tigers minority interests is to accept SIAs offer. Take the money and
invest in something else, or throw in your lot with the rest of the SIA group by taking up
the options to buy SIA shares. Either option is better than staying invested in a suboptimal airline that has few prospects for independent success.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
E raymond.yap@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Mar-14A
746.5
(14.46)
(223.0)
(0.11)
145%
NA
0%
NA
NA
67.6%
1.77
(54.4%)
Mar-15A
677.4
(2.52)
(268.9)
(0.06)
(50%)
NA
0%
NA
NA
(1.5%)
4.75
(38.2%)
Mar-16F
704.0
58.48
9.4
0.00
NA
109.0
0%
16.08
9.55
(37.1%)
4.56
4.3%
1.88
Mar-17F
710.3
99.73
57.6
0.02
513%
17.8
0%
8.78
11.16
(52.8%)
3.63
22.7%
1.21
Mar-18F
782.9
96.22
58.0
0.02
1%
17.6
0%
8.28
9.83
(66.9%)
3.02
18.7%
1.37
Powered by
EFA
BY THE NUMBERS
1M
3M
Relative
4.5
52.2
Absolute
0.0
51.9
Major shareholders
SIA
12M
61.9
49.1
% held
55.8
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
30%
21%
12%
3%
-6%
-15%
-24%
-33%
-42%
-51%
-60%
90
80
70
60
50
40
30
20
10
0
3,500%
2,944%
2,389%
1,833%
1,278%
722%
167%
-389%
-944%
-1,500%
ROE (rhs)
Mar-14A
746.5
(14.5)
(14.5)
(34.1)
(48.6)
(4.6)
(95.1)
0.0
(148.2)
(83.3)
(231.6)
8.6
0.0
(223.0)
0.0
Mar-15A
677.4
(2.5)
(2.5)
(36.9)
(39.4)
(5.6)
(35.3)
0.0
(80.4)
(196.8)
(277.2)
8.3
Mar-16F
704.0
58.5
58.5
(41.6)
16.9
(7.2)
0.0
0.0
9.7
0.0
9.7
(0.3)
Mar-17F
710.3
99.7
99.7
(33.8)
66.0
(6.6)
0.0
0.0
59.4
0.0
59.4
(1.8)
Mar-18F
782.9
96.2
96.2
(30.4)
65.8
(6.0)
0.0
0.0
59.8
0.0
59.8
(1.8)
(268.9)
0.0
9.4
0.0
57.6
0.0
58.0
0.0
(223.0)
(129.9)
(129.9)
(268.9)
(94.5)
(94.5)
9.4
9.4
9.4
57.6
57.6
57.6
58.0
58.0
58.0
Mar-14A
(14.5)
Mar-15A
(2.5)
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-16F
58.5
Mar-17F
99.7
Mar-18F
96.2
9.7
(104.1)
42.4
(7.0)
(6.2)
31.9
(4.6)
8.6
(82.7)
(365.2)
577.9
(4.9)
(5.6)
(0.6)
28.7
(40.7)
52.1
6.2
(6.2)
(0.3)
51.1
0.0
56.0
5.6
(5.6)
(1.8)
91.7
0.0
0.0
5.0
(5.0)
(1.8)
104.1
0.0
0.0
(202.7)
10.0
(154.4)
292.2
(64.3)
(53.0)
(64.3)
227.4
0.0
56.0
(0.0)
0.0
0.0
0.0
(0.0)
0.0
0.0
0.0
(0.0)
0.0
0.0
0.0
0.0
0.0
(10.7)
127.1
54.4
(227.1)
(61.9)
0.0
(0.3)
162.8
138.6
(88.5)
(16.6)
(6.5)
(6.5)
100.6
107.1
116.4
(5.9)
(5.9)
85.8
91.7
100.9
(5.3)
(5.3)
98.8
104.1
113.3
293
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
171.6
115.4
0.0
22.4
309.4
569.5
0.0
0.2
78.8
648.5
53.1
Mar-15A
310.2
30.2
0.0
102.9
443.3
453.5
0.0
0.1
125.5
579.1
83.7
Mar-16F
390.3
31.4
0.0
102.9
524.6
338.4
0.0
0.1
125.5
464.0
83.7
Mar-17F
455.6
31.7
0.0
102.9
590.2
304.7
0.0
0.1
125.5
430.3
83.7
Mar-18F
533.9
34.9
0.0
102.9
671.7
274.3
0.0
0.1
125.5
399.9
83.7
158.4
112.3
323.8
307.0
115.6
140.8
340.1
223.2
109.8
140.8
334.3
223.2
103.8
140.8
328.3
223.2
116.8
140.8
341.3
223.2
48.4
355.4
0.0
679.2
278.7
0.0
278.7
243.6
466.9
0.0
807.0
215.4
0.0
215.4
206.6
429.9
0.0
764.1
224.5
0.0
224.5
187.1
410.4
0.0
738.7
281.8
0.0
281.8
167.6
390.9
0.0
732.1
339.5
0.0
339.5
Mar-14A
(13.8%)
(132%)
(1.9%)
(0.16)
0.23
(4.47)
0.00%
NA
35.04
0.061
80.04
(6.2%)
(6.3%)
(14.4%)
Mar-15A
(9.2%)
(83%)
(0.4%)
0.00
0.09
(5.15)
0.00%
NA
39.23
73.55
(6.3%)
(6.4%)
(7.6%)
Mar-16F
3.9%
NA
8.3%
0.03
0.09
1.66
3.01%
NA
16.02
63.89
3.1%
3.8%
1.5%
Mar-17F
0.9%
71%
14.0%
0.06
0.11
6.48
3.01%
NA
16.22
63.84
15.7%
12.4%
6.3%
Mar-18F
10.2%
(4%)
12.3%
0.09
0.14
6.46
3.01%
NA
15.53
58.63
17.1%
11.3%
6.0%
Mar-14A
0.2%
-5.9%
78.8%
7.3
5.8
0.6
0.3
0.4
126.5
52
Mar-15A
-8.7%
-4.8%
82.1%
7.0
5.7
0.6
0.3
0.4
123.7
42
Mar-16F
-2.2%
-1.2%
83.0%
7.1
5.9
0.6
0.2
0.4
89.0
40
Mar-17F
-2.1%
-2.1%
83.0%
7.3
6.1
0.6
0.2
0.4
77.4
40
Mar-18F
9.5%
9.5%
83.0%
7.4
6.3
0.6
0.2
0.4
80.0
39
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Av. Seat Km (ASK, Yoy Chg %)
Rev. Psg Km (RPK, Yoy Chg %)
Passenger Load Factor (%)
Pax yld per RPK (S$)
Pax rev. per ASK (S$)
Total Cost Per ATK (S$)
Fuel Cost Per ATK (S$)
Non-fuel Cost Per ATK (S$)
Jet Fuel Price (US$/barrel)
Fleet Size (no. Of Planes)
294
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$19.46
S$20.00
S$20.00
2.8%
Reuters:
Bloomberg:
Market cap:
UOBH.SI
UOB SP
US$22,064m
S$31,172m
US$38.74m
S$54.55m
1,603m
80.0%
Price Close
23.0
97.7
21.0
94.1
19.0
90.6
17.0
15
87.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Biggest exposure to a slowing ASEAN among Singapore banks, which could lead to
near-term challenges in loan growth and asset quality.
Over the longer term, could be a prime beneficiary of increased intra-regional trade
flows with the establishment of AEC.
Maintain Hold, with a GGM-based target price of S$20.00 (1.06x CY16 P/BV).
Remains our least favourite Singapore bank for its least resilient asset quality.
Credit quality likely to remain the worst among the three banks
25.0
Dec-14
1M
-4.9
-0.4
3M
0.8
1.1
12M
-20.0
-7.2
We expect UOBs credit cost to spike to 65bp in 2016 (3Q15: 32bp), higher than DBSs
40bp and OCBCs 38bp. UOB has traditionally seen the worst credit quality in a
downturn, and we expect the same this cycle given that has a larger proportion of SME
loans vs. MNCs. We continue to expect a broadening out of NPLs across sectors in
ASEAN for UOB into 2016.
Maintain Hold
We maintain a Hold call on UOB, with a GGM-based target price of S$20.00 (1.06x
CY16 P/BV). UOB remains our least preferred Singapore bank as it has the poorest
asset quality and lacks growth engines.
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Dec-13A
4,120
2,601
6,721
(430)
3,007
1.91
7.2%
10.19
0.75
3.85%
15.38
1.27
12.7%
Dec-14A
4,558
2,899
7,457
(635)
3,248
2.04
7.0%
9.48
0.75
3.85%
16.31
1.19
12.9%
Dec-15F
4,906
3,035
7,941
(670)
3,190
1.99
(2.6%)
9.74
0.72
3.70%
17.66
1.10
11.7%
0%
1.02
Dec-16F
5,223
2,985
8,208
(1,369)
2,750
1.72
(13.8%)
11.34
0.62
3.19%
18.81
1.03
9.4%
0%
0.85
Dec-17F
5,555
3,053
8,608
(1,006)
3,253
2.03
18.3%
9.59
0.74
3.80%
20.18
0.96
10.4%
0%
0.94
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-0.4
1.1
-7.2
Absolute
-4.9
0.8
-20.0
Major shareholders
Wee family
Lien family
% held
16.5
5.4
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
16.0%
14.2%
12.4%
10.7%
8.9%
7.1%
5.3%
3.6%
1.8%
0.0%
14.00
40.0%
12.00
31.4%
10.00
22.9%
8.00
14.3%
6.00
5.7%
4.00
-2.9%
2.00
-11.4%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-20.0%
ROE (rhs)
Dec-13A
4,120
2,601
6,721
(2,898)
3,823
(430)
3,393
190
3,583
0
3,583
0
3,583
(559)
Dec-14A
4,558
2,899
7,457
(3,146)
4,311
(635)
3,675
149
3,824
0
3,824
0
3,824
(561)
Dec-15F
4,906
3,035
7,941
(3,518)
4,423
(670)
3,753
105
3,858
0
3,858
0
3,858
(656)
Dec-16F
5,223
2,985
8,208
(3,624)
4,584
(1,369)
3,215
112
3,328
0
3,328
0
3,328
(566)
Dec-17F
5,555
3,053
8,608
(3,788)
4,821
(1,006)
3,815
120
3,935
0
3,935
0
3,935
(669)
3,024
(17)
0
0
3,007
3,007
3,263
(15)
0
0
3,248
3,248
3,202
(12)
0
0
3,190
3,190
2,762
(12)
0
0
2,750
2,750
3,266
(13)
0
0
3,253
3,253
Dec-13A
81.8%
83.8%
89.3%
100.0%
62.9%
78.4%
17.0%
58.0%
0.076%
0.051%
0.17%
Dec-14A
82.2%
84.2%
90.3%
100.0%
63.9%
80.0%
17.3%
58.3%
0.121%
0.081%
0.30%
Dec-15F
80.0%
82.3%
88.7%
100.0%
62.5%
78.1%
18.4%
58.3%
0.178%
0.115%
0.43%
Dec-16F
79.2%
82.2%
88.5%
100.0%
62.4%
77.7%
19.4%
59.4%
0.387%
0.249%
0.83%
Dec-17F
79.2%
82.7%
88.9%
100.0%
62.5%
78.0%
20.3%
60.9%
0.288%
0.186%
0.59%
296
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
206,861
30,366
Dec-14A
220,866
30,076
Dec-15F
228,369
31,980
Dec-16F
237,550
34,018
Dec-17F
247,616
36,198
237,227
3,408
240,635
4,144
12,570
16,714
26,881
0
284,230
214,548
13,705
20,016
248,269
0
9,382
257,651
26,389
190
26,579
250,942
3,729
254,671
4,149
12,833
16,982
35,083
0
306,736
233,750
11,226
21,904
266,880
0
10,084
276,964
29,569
203
29,772
260,349
4,399
264,748
4,149
13,121
17,270
40,636
0
322,654
246,606
11,787
21,923
280,317
0
10,286
290,602
31,836
215
32,051
271,568
5,768
277,335
4,149
13,420
17,569
41,628
0
336,532
257,704
12,377
21,942
292,023
0
10,491
302,514
33,791
227
34,018
283,814
6,773
290,587
4,149
13,730
17,879
40,509
0
348,975
266,981
12,995
21,962
301,939
0
10,701
312,640
36,096
240
36,336
Dec-13A
3.5%
2.0%
6.9%
61.3%
1.03%
2.71%
1.69%
1.92%
2.76%
11.2%
1.53%
15.6%
39.3%
1.12%
Dec-14A
10.9%
12.8%
6.7%
61.1%
1.02%
2.69%
1.67%
1.95%
2.65%
14.7%
1.54%
14.7%
37.0%
1.10%
Dec-15F
6.5%
2.6%
0.9%
61.8%
1.06%
2.79%
1.74%
1.99%
2.68%
15.1%
1.56%
17.0%
36.2%
1.01%
Dec-16F
3.4%
3.6%
(13.8%)
63.6%
1.08%
2.84%
1.77%
2.03%
2.69%
29.9%
1.58%
17.0%
36.1%
0.83%
Dec-17F
4.9%
5.2%
18.3%
64.5%
1.09%
2.87%
1.79%
2.08%
2.69%
20.9%
1.62%
17.0%
36.5%
0.95%
Dec-13A
17.3%
1.7%
0.9%
43.1%
0.6%
164.3%
1.4%
13.2%
24.7%
17.9%
83.4%
1.2%
14.8%
Dec-14A
9.5%
1.7%
11.5%
42.2%
0.8%
158.1%
1.5%
13.9%
25.6%
8.9%
83.8%
1.2%
1.0%
Dec-15F
2.7%
1.8%
4.7%
44.3%
0.7%
167.7%
1.6%
14.3%
25.4%
5.5%
81.8%
1.3%
7.3%
Dec-16F
3.4%
1.8%
-1.6%
44.2%
1.0%
144.7%
1.8%
14.4%
24.9%
4.5%
81.4%
2.0%
1.2%
Dec-17F
3.6%
1.8%
2.3%
44.0%
1.1%
137.9%
1.9%
14.6%
24.5%
3.6%
81.7%
2.3%
2.0%
Key Ratios
Total Income Growth
Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio
Return On Average Assets
Key Drivers
Loan Growth (%)
Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)
297
Company Note
Singapore
UOL Group
Multiple engines
Current price:
Target price:
Previous target:
Up/downside:
S$6.15
S$8.24
S$8.24
34.0%
Reuters:
Bloomberg:
Market cap:
UTOS.SI
UOL SP
US$3,466m
S$4,897m
US$5.49m
S$7.74m
787.2m
52.0%
8.60
117.0
7.60
110.3
6.60
103.7
5.60
6
97.0
Vol m
No changes.
Price Close
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.5
-2.0
3M
-1.0
-0.7
12M
-8.4
4.4
UOL operates the Pan Pacific and Parkroyal hotels and serviced suites brands. As at
3Q15, it owned 6,163 rooms and managed a further 9,865 keys across Singapore,
Malaysia, Australia, Myanmar and Vietnam. The group is also diversifying
geographically with its first 190-room Pan Pacific-branded hotel in London. The latter is
part of a mixed-use development comprising 109 residential units with a retail and hotel
component.
Maintain Add
We retain our Add call with an unchanged target price of S$8.24. We continue to like
UOLs diversified business model and its strong cashflow generation. Given UOLs
healthy balance sheet and gearing of 0.31x, we believe it is well positioned to replenish
its land bank to extend its earnings visibility.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Dec-13A
1,059
410.5
785.8
0.45
(7.4%)
13.63
0.20
3.25%
17.57
NA
28.0%
0.70
5.37%
Dec-14A
1,361
675.9
947.7
0.79
75.3%
7.77
0.15
2.44%
11.77
NA
33.0%
0.63
8.54%
Dec-15F
1,280
438.7
489.1
0.55
(30.6%)
11.20
0.16
2.65%
17.68
11.34
25.7%
0.61
5.53%
1.19
Dec-16F
1,465
450.2
460.5
0.58
6.5%
10.52
0.18
2.85%
15.82
6.24
17.4%
0.58
5.64%
1.04
Dec-17F
2,102
570.3
506.8
0.64
10.1%
9.56
0.19
3.14%
11.92
25.37
12.9%
0.56
5.96%
1.12
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
-2.0
-0.7
4.4
Absolute
-6.5
-1.0
Major shareholders
Wee related vehicles (incl Haw Par)
-8.4
% held
31.2
9.8
Schroders
7.0
P/BV vs ROE
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
12.0%
10.8%
9.6%
8.4%
7.2%
6.0%
4.8%
3.6%
2.4%
1.2%
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
140%
118%
96%
73%
51%
29%
7%
-16%
-38%
-60%
ROE (rhs)
Dec-13A
1,059
408
410
(59)
352
(28)
115
0
439
513
952
(70)
Dec-14A
1,361
525
676
(60)
616
(29)
158
0
745
353
1,099
(77)
Dec-15F
1,280
494
439
(71)
368
(37)
191
0
522
61
583
(42)
Dec-16F
1,465
565
450
(74)
376
(31)
216
0
562
0
562
(45)
Dec-17F
2,102
811
570
(77)
494
(18)
142
0
618
0
618
(49)
881
(96)
0
1,022
(74)
0
541
(52)
0
517
(56)
0
569
(62)
0
786
346
346
948
615
615
489
432
432
460
460
460
507
507
507
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Dec-13A
410
Dec-14A
676
Dec-15F
439
Dec-16F
450
Dec-17F
570
54
(925)
505
731
168
(541)
574
(32)
(47)
418
(154)
(423)
196
(35)
(97)
(608)
(157)
(144)
187
(43)
(28)
915
(125)
(111)
153
(42)
(27)
1,154
(125)
(48)
88
(41)
(30)
708
(125)
(423)
(577)
156
0
0
(157)
658
4
(297)
(422)
(67)
1
(184)
(309)
(69)
0
(36)
(161)
(355)
0
(154)
(92)
(128)
(138)
(152)
(32)
(30)
(36)
534
(43)
(237)
(42)
(249)
(41)
(548)
299
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
294
Dec-14A
287
Dec-15F
544
Dec-16F
1,140
Dec-17F
1,138
378
1
1,517
2,190
1,169
7,037
0
26
8,232
1,131
248
1
2,383
2,918
1,241
7,664
0
26
8,930
1,292
351
1
1,959
2,854
1,295
8,190
0
32
9,517
1,358
281
1
1,295
2,717
1,347
8,603
0
36
9,986
1,325
634
1
894
2,667
1,395
8,787
0
52
10,234
1,151
447
100
1,678
1,184
282
75
1,649
1,679
421
121
1,900
1,421
401
138
1,864
1,386
461
198
1,810
1,204
333
1,516
0
3,194
6,760
467
7,227
390
2,069
0
3,718
7,643
488
8,131
366
1,787
0
3,686
8,004
680
8,685
418
1,804
0
3,668
8,327
708
9,035
467
1,671
0
3,481
8,682
738
9,420
Dec-13A
(7.6%)
2.8%
38.8%
(2.63)
8.80
10.93
7.40%
56.3%
100.0
0.42
203.5
12.7%
3.87%
3.94%
Dec-14A
28.5%
64.7%
49.7%
(3.41)
9.71
17.74
6.98%
20.1%
83.9
0.33
159.1
22.0%
6.02%
6.24%
Dec-15F
(5.9%)
(35.1%)
34.3%
(2.84)
10.16
8.62
7.16%
30.0%
85.3
0.38
163.1
9.6%
3.31%
4.25%
Dec-16F
14.4%
2.6%
30.7%
(1.99)
10.57
9.03
8.00%
30.0%
78.9
0.37
167.2
11.2%
3.34%
4.35%
Dec-17F
43.5%
26.7%
27.1%
(1.54)
11.02
12.14
8.00%
30.0%
79.4
0.33
121.8
18.8%
4.39%
4.57%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
56.7%
38.7%
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
46.7%
49.7%
N/A
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
54.7%
41.2%
N/A
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
48.7%
47.5%
N/A
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
33.3%
63.9%
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
300
Company Note
Singapore
Venture Corporation
US recovery play
Current price:
Target price:
Previous target:
Up/downside:
S$8.44
S$10.11
S$10.11
19.8%
Reuters:
Bloomberg:
Market cap:
VENM.SI
VMS SP
US$1,653m
S$2,336m
US$3.51m
S$4.94m
274.7m
91.6%
Tailwinds for Venture include recovering US economy, strong US$ and weak Asian
currencies.
TPP and new demand from non-traditional tech companies keen to leverage their
customer base could present long-term opportunities.
Backed by strong FCF, base-case DPS of S$0.50 has been the established record.
Maintain Add. 5.9% dividend yields can limit any share price downside.
8.40
118.0
7.90
105.5
7.40
3
93.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.1
6.6
3M
1.7
2.0
12M
8.5
21.3
A blue ocean strategy places Venture in good stead to address new opportunities. The
company is already engaged in life sciences products and 3D printing. Non-traditional
tech companies such as Alphabet and Amazon are also capitalising on their user base
to push new devices. This could spell opportunities for Venture given its excellent track
record in product design.
Reiterate Add
We reiterate our Add call on Venture, with an unchanged target price that is based on
14x CY17 earnings. The market views Venture as a proxy play for the recovering US
economy and US$ strength. Its base-case DPS of S$0.50 (5.9% dividend yield) will
support the share price as the company continues to grow in a sustainable manner. A
fragmented shareholding structure could tempt private equity funds more than industry
peers that have no need for extra capacity.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
2,330
127.5
0.46
(9.1%)
18.96
0.99
0.50
5.92%
11.71
33.48
(12.5%)
1.27
7.0%
Dec-14A
2,465
136.8
0.51
9.6%
16.97
0.94
0.50
5.92%
10.62
16.82
(12.0%)
1.24
7.5%
Dec-15F
2,668
157.9
0.55
8.5%
15.31
0.87
0.50
5.92%
9.14
17.22
(11.7%)
1.24
8.1%
1.02
Dec-16F
2,819
169.2
0.61
11.5%
13.77
0.83
0.50
5.92%
8.32
15.61
(11.8%)
1.22
8.9%
1.00
Dec-17F
2,970
199.5
0.72
17.9%
11.68
0.78
0.50
5.92%
7.62
13.98
(12.4%)
1.18
10.3%
1.07
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
6.6
2.0
21.3
Absolute
2.1
1.7
Major shareholders
Aberdeen Asset
8.5
% held
18.9
Sprucegrove Investment
7.0
6.9
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
12.00%
10.50%
9.00%
7.50%
6.00%
4.50%
3.00%
1.50%
0.00%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
ROE (rhs)
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-13A
2,330
289
172
(46)
126
0
4
5
136
0
136
(9)
Dec-14A
2,465
572
190
(44)
145
2
5
2
153
0
153
(17)
Dec-15F
2,668
625
222
(46)
176
1
1
7
186
0
186
(28)
Dec-16F
2,819
663
243
(48)
195
1
1
1
199
0
199
(30)
Dec-17F
2,970
698
263
(32)
231
1
1
1
234
0
234
(35)
127
0
0
137
0
0
158
0
0
169
0
0
199
0
0
127
127
127
137
139
139
158
152
152
169
169
169
199
199
199
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
172.0
(4.4)
(61.4)
Dec-14A
189.7
(4.6)
(10.5)
Dec-15F
222.3
(1.0)
(38.5)
Dec-16F
243.2
(1.0)
(39.5)
Dec-17F
262.9
(1.0)
(39.8)
16.6
0.3
(3.9)
119.3
(34.9)
1.5
(3.0)
0.2
(36.2)
(11.1)
3.6
0.0
(137.5)
17.2
1.5
(17.2)
176.0
(56.7)
0.0
0.0
19.5
(37.2)
1.7
0.0
0.0
(137.4)
2.5
1.5
(15.1)
171.7
(30.0)
0.0
0.0
(0.5)
(30.5)
(6.2)
0.0
0.0
(137.4)
2.4
1.5
(27.8)
178.8
(30.0)
0.0
0.0
(0.5)
(30.5)
1.0
0.0
0.0
(138.1)
2.4
1.5
(29.8)
196.2
(30.0)
0.0
0.0
(0.5)
(30.5)
1.0
0.0
0.0
(138.1)
10.2
(134.8)
(51.8)
71.9
84.2
0.2
(135.5)
3.3
140.5
139.8
0.0
(143.6)
(2.3)
135.0
142.2
0.0
(137.1)
11.2
149.3
149.3
0.0
(137.1)
28.6
166.7
166.7
302
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
391
562
528
0
1,481
153
101
701
7
961
162
435
6
603
0
Dec-14A
393
593
553
0
1,539
188
142
640
20
989
169
Dec-15F
383
702
560
0
1,644
192
124
640
20
975
163
Dec-16F
389
742
591
0
1,722
194
108
640
20
962
164
Dec-17F
409
781
622
0
1,813
194
110
640
20
964
165
556
7
725
0
587
7
758
0
618
7
790
0
0
0
10
613
1,827
2
1,829
479
10
657
0
0
0
0
6
663
1,862
2
1,865
0
0
10
735
1,882
2
1,884
0
0
10
768
1,913
2
1,915
0
0
10
800
1,975
2
1,977
Dec-13A
(2.44%)
(1.5%)
7.38%
0.84
6.66
108.1
6.6%
111%
74.75
91.7
55.79
8.8%
6.4%
5.65%
Dec-14A
5.83%
10.3%
7.69%
0.82
6.78
143.2
10.9%
90%
79.75
104.1
69.46
9.6%
7.3%
6.10%
Dec-15F
8.22%
17.2%
8.33%
0.80
6.82
173.4
15.0%
74%
83.10
99.4
73.63
11.7%
8.7%
7.15%
Dec-16F
5.67%
9.4%
8.63%
0.82
6.93
192.5
15.0%
69%
87.83
97.6
76.54
12.6%
9.5%
7.44%
Dec-17F
5.34%
8.1%
8.85%
0.89
7.15
227.6
15.0%
59%
87.72
97.5
76.44
14.5%
11.0%
8.53%
Dec-13A
-1.0%
11.1%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Effective tax rate of 15% may drop, as
higher value-added activities
contribution increase
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Revenue growth aided by favourable
exchange rate
303
Company Note
Singapore
Wilmar International
Current price:
Target price:
Previous target:
Up/downside:
S$2.94
S$3.36
S$3.36
14.4%
Reuters:
Bloomberg:
Market cap:
WLIL.SI
WIL SP
US$13,152m
S$18,581m
US$17.31m
S$24.39m
6,403m
29.5%
3.40
106.0
2.90
98.5
2.40
30
91.0
20
Vol m
The oilseeds and grains division posted a 39% yoy jump in its 3Q15 pretax profit to
US$244m, the best quarterly earnings for the division since listing. This was due to
higher sales volumes, as well as stronger crush margins (due to significantly lower
commodity financing activities by financial traders in China) and consumer product
margins (due to lower feedstock costs). This helped to cushion weaker tropical oils
earnings.
No change.
Price Close
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.9
0.6
3M
13.1
13.4
12M
-8.1
4.7
We project that Wilmar will deliver stronger earnings in FY16, driven by higher
contributions from tropical oils, oilseeds and grains, as well as sugar. The groups
tropical oils division is likely to benefit from higher CPO selling prices and biodiesel sales
volumes, while the sugar division may benefit from stronger sugar prices. We expect the
oilseeds and grains business to gain from the groups expansion into the consumer
products business in order to raise the value added.
Financial Summary
Analyst
Ivy NG Lee Fang, CFA
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Normalised EPS (US$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Normalised EPS/consensus EPS (x)
Dec-13A
44,085
2,285
1,319
0.20
6.4%
10.46
0.063
3.03%
11.54
13.79
89.4%
0.89
8.89%
Dec-14A
43,084
2,067
1,156
0.18
(11.4%)
11.80
0.058
2.77%
12.96
NA
89.6%
0.86
7.58%
Dec-15F
40,859
2,119
1,057
0.17
(8.5%)
12.90
0.050
2.38%
11.75
6.20
74.5%
0.82
6.67%
0.92
Dec-16F
46,646
2,333
1,234
0.19
16.7%
11.06
0.058
2.78%
11.30
NA
78.7%
0.78
7.40%
0.97
Dec-17F
51,605
2,680
1,384
0.22
12.2%
9.86
0.065
3.12%
10.14
NA
78.7%
0.74
7.87%
1.02
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
Relative
0.6
13.4
4.7
Absolute
-3.9
13.1
-8.1
Major shareholders
% held
33.4
18.1
12.0
P/BV vs ROE
3.00
12.00%
30.0
100%
2.50
10.00%
25.0
73%
2.00
8.00%
20.0
47%
1.50
6.00%
15.0
20%
1.00
4.00%
10.0
-7%
0.50
2.00%
5.0
-33%
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
0.00%
0.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-60%
ROE (rhs)
Dec-13A
44,085
3,725
2,285
(608)
1,676
(18)
104
0
1,762
14
1,775
(385)
Dec-14A
43,084
3,816
2,067
(660)
1,407
50
81
0
1,538
0
1,538
(314)
Dec-15F
40,859
3,619
2,119
(620)
1,499
(137)
73
0
1,435
0
1,435
(316)
Dec-16F
46,646
4,132
2,333
(661)
1,672
(52)
76
0
1,697
0
1,697
(390)
Dec-17F
51,605
4,571
2,680
(714)
1,966
(118)
80
0
1,928
0
1,928
(463)
1,391
(72)
0
0
0
0
1,319
1,377
1,305
1,224
(68)
0
0
0
0
1,156
1,224
1,156
1,119
(62)
0
0
0
0
1,057
1,119
1,057
1,306
(72)
0
0
0
0
1,234
1,306
1,234
1,465
(81)
0
0
0
0
1,384
1,465
1,384
Dec-13A
2,285
28
(288)
0
0
113
(88)
(460)
1,590
(1,376)
174
(310)
53
(1,460)
859
20
0
(312)
Dec-14A
2,067
43
423
0
0
(231)
25
(318)
2,008
(1,093)
128
(144)
(162)
(1,272)
(1,139)
7
0
(414)
0
292
(1,253)
(517)
(402)
1,295
Dec-15F
2,119
0
1,535
0
0
0
(137)
(316)
3,202
(1,000)
0
0
0
(1,000)
0
0
0
(317)
0
0
(317)
1,885
2,202
2,671
Dec-16F
2,333
0
(1,994)
0
0
0
(52)
(390)
(103)
(1,000)
0
0
0
(1,000)
0
0
0
(370)
0
0
(370)
(1,473)
(1,103)
(634)
Dec-17F
2,680
0
(1,497)
0
0
0
(118)
(463)
602
(1,000)
0
0
0
(1,000)
0
0
0
(415)
0
0
(415)
(814)
(398)
71
Cash Flow
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
2,248
2,816
2,946
990
649
305
BY THE NUMBERS
Balance Sheet
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
11,993
7,066
7,221
1,562
27,842
9,337
2,048
4,421
2,985
18,790
19,392
0
2,705
1,095
23,191
6,804
0
129
6,933
620
30,745
15,005
882
15,887
Dec-14A
7,661
8,040
6,581
2,234
24,515
9,477
2,166
4,402
2,998
19,043
15,204
0
2,938
1,055
19,197
7,158
0
169
7,327
623
27,147
15,495
916
16,411
Dec-15F
9,545
6,557
6,241
2,234
24,577
9,857
2,239
4,402
2,998
19,496
15,204
0
2,651
1,055
18,909
7,158
0
169
7,327
623
26,859
16,235
978
17,213
Dec-16F
8,072
7,889
7,125
2,234
25,319
10,196
2,315
4,402
2,998
19,911
15,204
0
2,872
1,055
19,131
7,158
0
169
7,327
623
27,081
17,099
1,050
18,149
Dec-17F
7,258
8,879
7,883
2,234
26,254
10,483
2,395
4,402
2,998
20,277
15,204
0
3,123
1,055
19,382
7,158
0
169
7,327
623
27,332
18,068
1,131
19,199
Dec-13A
(3.0%)
1.4%
5.18%
(2.22)
2.34
3.11
21.7%
31.0%
33.27
42.32
13.49
6.05%
5.44%
3.15%
Dec-14A
(2.3%)
(9.5%)
4.80%
(2.30)
2.42
2.55
20.4%
31.9%
34.44
64.15
14.64
4.89%
4.89%
2.60%
Dec-15F
(5.2%)
2.5%
5.19%
(2.00)
2.54
3.19
22.0%
30.0%
34.70
62.84
15.71
5.04%
4.60%
2.87%
Dec-16F
14.2%
10.1%
5.00%
(2.23)
2.67
3.56
23.0%
30.0%
31.55
57.53
13.51
5.85%
5.14%
3.04%
Dec-17F
10.6%
14.9%
5.19%
(2.36)
2.82
4.19
24.0%
30.0%
32.16
58.23
14.01
6.36%
5.56%
3.45%
Dec-13A
241,048
215,257
18.8
-4.0%
857
Dec-14A
238,287
210,063
20.6
7.1%
821
Dec-15F
244,287
223,991
21.0
5.8%
670
Dec-16F
250,287
232,717
21.5
6.1%
750
Dec-17F
256,287
240,534
22.0
5.9%
800
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
306
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$1.73
S$2.05
S$2.05
18.9%
Reuters:
Bloomberg:
Market cap:
WTHS.SI
WINGT SP
US$953.4m
S$1,347m
US$0.81m
S$1.14m
785.7m
49.7%
Price Close
2.10
123.0
1.90
113.0
1.70
103.0
1.50
15
93.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
No change
Dec-14
1M
2.7
7.2
3M
5.8
6.1
12M
4.2
17.0
Maintain Hold
We think Wing Tais share price could remain range-bound in the near term. Meanwhile,
its healthy balance sheet with 0.1x gearing and valuations at 52% discount to RNAV
could limit downside risks. Hence, despite the 20% upside to our target price, we
maintain our Hold call due to the lack of potential near-term catalysts.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Jun-14A
803.4
49.3
254.4
0.15
(57%)
11.21
0.12
6.93%
40.62
NA
14.9%
0.46
4.19%
Jun-15A
676.7
(10.0)
150.3
0.05
(70%)
37.13
0.06
3.50%
NA
31.00
9.2%
0.42
1.19%
Jun-16F
507.1
124.9
63.1
0.11
134%
15.83
0.02
1.41%
14.91
14.88
9.5%
0.42
2.67%
0.78
Jun-17F
602.3
134.0
97.3
0.12
14%
13.84
0.04
2.17%
13.02
6.12
5.8%
0.41
2.99%
0.90
Jun-18F
621.9
110.0
105.4
0.14
8%
12.77
0.04
2.35%
15.12
7.08
3.3%
0.40
3.17%
1.42
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
1M
3M
12M
60.0
250%
0.600
12.0%
50.0
192%
0.500
10.0%
40.0
133%
% held
0.400
8.0%
6.0%
75%
50.3
0.300
30.0
0.200
4.0%
20.0
17%
0.100
2.0%
10.0
-42%
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
0.0%
7.2
6.1
17.0
Absolute
2.7
5.8
4.2
14.0%
Relative
Major shareholders
P/BV vs ROE
0.700
0.0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
-100%
ROE (rhs)
Jun-14A
803.4
803.4
49.3
(14.4)
35.0
(27.2)
154.8
0.0
162.5
149.9
312.5
(36.1)
Jun-15A
676.7
676.7
(10.0)
(14.4)
(24.4)
(39.8)
119.3
0.0
55.1
120.2
175.3
(9.4)
Jun-16F
507.1
507.1
124.9
(13.8)
111.0
(35.3)
23.8
0.0
99.5
(24.6)
74.9
(7.5)
Jun-17F
602.3
602.3
134.0
(13.1)
120.9
(35.9)
32.5
0.0
117.5
0.0
117.5
(11.7)
Jun-18F
621.9
621.9
110.0
(12.4)
97.6
(35.5)
62.7
0.0
124.7
0.0
124.7
(12.5)
276.3
(22.0)
0.0
165.9
(15.6)
0.0
67.4
(4.3)
0.0
105.7
(8.5)
0.0
112.3
(6.8)
0.0
254.4
121.8
121.8
150.3
36.5
36.5
63.1
85.2
85.2
97.3
97.3
97.3
105.4
105.4
105.4
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Jun-14A
49.3
Jun-16F
124.9
Jun-17F
134.0
Jun-18F
110.0
184.4
(38.2)
125.9
108.9
(112.8)
0.0
(46.8)
(112.1)
(20.4)
0.0
(2.8)
0.0
(25.2)
146.4
(7.0)
0.0
24.6
0.0
(10.8)
100.4
(7.0)
0.0
0.0
0.0
(16.9)
243.1
(7.0)
0.0
0.0
0.0
(17.9)
200.9
(7.0)
0.0
0.0
99.3
79.0
(136.6)
0.0
0.0
(94.3)
0.0
15.2
8.2
(110.9)
(12.6)
0.0
(47.3)
0.0
(19.4)
(26.4)
16.6
0.0
0.0
(18.9)
0.0
(41.7)
(48.7)
25.6
0.0
0.0
(29.2)
0.0
(31.6)
(38.5)
27.7
0.0
0.0
(31.6)
(72.0)
(302.9)
(57.4)
(228.0)
(43.3)
(45.7)
(43.9)
(47.5)
(44.8)
(48.8)
(1.8)
Jun-15A
(10.0)
308
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Jun-14A
835
Jun-15A
881
Jun-16F
884
Jun-17F
1,031
Jun-18F
1,145
80
1,511
52
2,478
131
2,274
0
0
2,406
186
29
1,285
47
2,241
119
2,527
0
0
2,646
36
21
1,285
35
2,226
112
2,529
0
0
2,641
36
25
1,181
42
2,279
106
2,626
0
0
2,733
37
26
1,076
43
2,291
101
2,736
0
0
2,837
38
260
66
513
1,116
177
51
264
1,155
133
38
207
1,171
157
46
240
1,196
163
47
248
1,223
112
1,228
0
1,741
2,970
173
3,143
106
1,261
0
1,525
3,173
189
3,362
79
1,251
0
1,458
3,217
192
3,409
94
1,291
0
1,531
3,285
196
3,481
97
1,320
0
1,568
3,359
200
3,559
Jun-14A
(39.7%)
(67%)
6.1%
(0.59)
3.78
0.88
11.6%
90%
55.91
N/A
N/A
2.00%
1.07%
3.02%
Jun-15A
(15.8%)
(120%)
(1.5%)
(0.40)
4.07
(0.52)
5.3%
157%
29.29
N/A
N/A
(1.40%)
(0.37%)
1.61%
Jun-16F
(25.1%)
NA
24.6%
(0.41)
4.12
2.56
10.0%
22%
18.08
N/A
N/A
7.36%
2.60%
2.49%
Jun-17F
18.8%
7%
22.3%
(0.26)
4.21
2.75
10.0%
30%
14.22
N/A
N/A
7.82%
2.76%
2.74%
Jun-18F
3.2%
(18%)
17.7%
(0.15)
4.30
2.18
10.0%
30%
15.20
N/A
N/A
7.03%
2.24%
2.80%
Jun-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4.5%
67.9%
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.5%
63.6%
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6.9%
55.8%
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.9%
64.2%
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.9%
65.2%
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
309
Company Note
Singapore
Yangzijiang Shipbuilding
Declining earnings
Current price:
Target price:
Previous target:
Up/downside:
S$1.10
S$1.21
S$1.21
10.5%
Reuters:
Bloomberg:
Market cap:
YAZG.SI
YZJSGD SP
US$2,970m
S$4,196m
US$9.68m
S$13.64m
3,832m
38.0%
1.300
111.1
1.100
102.6
0.900
60
94.0
40
Vol m
1.500
20
Dec-14
C.50% of YZJs US$4.8bn order book is dominated by bulk carriers which face
heightened cancellation and deferral risks amidst recession in the dry bulk sector.
We believe larger containerships will dominate the future trend in the industry, and YZJ
faces stiff competition from the Japanese and Korean yards, which have stronger track
records and faster delivery timeframes. The weakening yen also serves as a competitive
disadvantage for Chinese yards. Being new in the large-scale containerships segment,
YZJ may need to sacrifice margins for contract wins. As such, we revise downward our
shipbuilding margin estimates from 16% to 14.5% for FY16-17.
No change
Price Close
Maintain Hold
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.5
-5.0
3M
-0.5
-0.2
12M
-9.5
3.3
We have reduced our EPS forecast by 3-14% for FY15-17 on the back of fewer orders
and lower margin. Our target price is based on 0.9x P/BV, -1s.d. of its historical average,
and a 10% premium over Singapore-listed smaller yards, which are struggling through
an order drought. Potential re-rating catalysts could come from a shipbuilding sector
turnaround or an upside surprise in Chinas demand growth.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (Rmbm)
Operating EBITDA (Rmbm)
Net Profit (Rmbm)
Core EPS (Rmb)
Core EPS Growth
FD Core P/E (x)
DPS (Rmb)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
14,339
4,814
3,096
0.81
(13.5%)
6.16
0.22
4.43%
6.41
96.84
65.3%
1.07
18.6%
Dec-14A
15,354
3,989
3,483
0.91
12.5%
5.47
0.25
4.99%
6.08
8.68
25.6%
0.93
18.2%
Dec-15F
16,163
4,382
3,087
0.81
(11.4%)
6.17
0.24
4.86%
4.99
6.71
14.7%
0.84
14.3%
1.03
Dec-16F
13,798
3,738
2,708
0.71
(12.3%)
7.04
0.21
4.26%
5.08
5.74
3.6%
0.78
11.5%
0.97
Dec-17F
12,215
3,219
2,148
0.56
(20.7%)
8.88
0.19
3.78%
5.02
7.42
(5.9%)
0.73
8.5%
0.79
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
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BY THE NUMBERS
1M
3M
12M
Relative
-5.0
-0.2
3.3
Absolute
-9.5
-0.5
Major shareholders
-9.5
% held
Newyard Worldwide
24.2
14.0
Hongkong Hengyua
10.8
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Growth
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
35.0%
29.5%
24.0%
18.5%
13.0%
7.5%
2.0%
-3.5%
-9.0%
-14.5%
-20.0%
ROE (rhs)
Dec-13A
14,339
4,762
4,814
(285)
4,529
92
(1)
0
4,620
0
4,620
(1,542)
Dec-14A
15,354
4,144
3,989
(430)
3,559
386
8
0
3,953
0
3,953
(472)
Dec-15F
16,163
3,734
4,382
(465)
3,917
79
10
0
4,006
0
4,006
(921)
Dec-16F
13,798
3,233
3,738
(395)
3,342
161
10
0
3,514
0
3,514
(808)
Dec-17F
12,215
9,708
3,219
(349)
2,870
(18)
10
0
2,862
0
2,862
(717)
3,077
18
0
3,481
2
0
3,085
2
0
2,706
2
0
2,145
2
0
3,096
3,096
3,096
3,483
3,483
3,483
3,087
3,087
3,087
2,708
2,708
2,708
2,148
2,148
2,148
Cash Flow
(Rmbm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Dec-13A
4,814
Dec-14A
3,989
Dec-15F
4,382
Dec-16F
3,738
Dec-17F
3,219
(7,639)
5,331
266
1,091
1,276
264
(331)
(1,001)
(3,893)
(1,031)
576
(321)
(492)
9,082
(729)
10
79
(921)
3,817
(500)
161
(808)
4,182
(500)
(84)
(1)
(1,116)
5,206
91
0
(938)
(256)
(379)
(1,364)
(5,523)
0
0
(960)
(404)
0
(904)
(71)
0
0
(926)
(364)
0
(864)
0
0
0
(812)
(80)
(717)
3,698
(500)
(315)
(315)
0
(1,131)
0
0
0
(720)
0
4,358
(650)
197
(4,678)
(19)
(6,502)
1,216
2,195
8,040
0
(997)
1,915
2,841
2,833
0
(812)
2,505
3,318
3,156
0
(720)
1,847
2,567
2,332
311
BY THE NUMBERS
Balance Sheet
(Rmbm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-13A
1,436
6,879
1,463
18,310
28,089
5,793
605
0
8,725
15,122
12,241
Dec-14A
2,653
6,721
2,015
14,374
25,762
6,117
809
2
8,088
15,016
5,414
Dec-15F
4,568
7,273
1,491
12,439
25,771
6,151
1,213
2
6,985
14,352
2,707
Dec-16F
7,083
6,209
1,268
12,384
26,944
6,256
1,577
2
6,324
14,160
2,707
Dec-17F
9,571
5,497
1,140
11,988
28,196
6,407
1,893
2
5,761
14,064
2,707
10,201
9,950
7,208
6,294
5,772
22,442
1,133
15,364
2,636
9,915
5,272
9,001
5,272
8,479
5,272
1,363
2,496
0
24,938
17,801
472
18,273
1,702
4,338
0
19,702
20,473
603
21,076
1,702
6,974
0
16,889
22,634
601
23,235
1,702
6,974
0
15,975
24,530
598
25,128
1,702
6,974
0
15,453
26,210
596
26,807
Dec-13A
(3.1%)
(0.2%)
33.6%
(3.12)
4.65
18.82
33.4%
22.7%
161.6
46.7
168.7
17.0%
17.6%
7.86%
Dec-14A
7.1%
(17.1%)
26.0%
(1.41)
5.34
14.51
11.9%
22.7%
161.7
56.6
184.9
9.5%
13.8%
7.53%
Dec-15F
5.3%
9.9%
27.1%
(0.89)
5.91
17.75
23.0%
24.9%
158.0
51.5
147.9
11.9%
14.0%
7.46%
Dec-16F
(14.6%)
(14.7%)
27.1%
(0.23)
6.40
16.83
23.0%
24.9%
178.8
47.8
139.4
10.2%
11.5%
6.33%
Dec-17F
(11.5%)
(13.9%)
26.4%
0.42
6.84
26.07
25.0%
27.8%
174.9
175.3
511.2
9.1%
8.7%
5.18%
Dec-13A
N/A
2,880.0
14,339
N/A
N/A
N/A
Dec-14A
N/A
1,980.0
15,354
N/A
N/A
N/A
Dec-15F
N/A
2,070.0
16,163
N/A
N/A
N/A
Dec-16F
N/A
1,530.0
13,798
N/A
N/A
N/A
Dec-17F
N/A
1,800.0
12,215
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (Rmb)
BVPS (Rmb)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Outstanding Orderbook (Rmbm)
Order Book Wins (Rmbm)
Order Book Depletion (Rmbm)
Average Day Rate Per Ship (US$)
No. Of Ships (unit)
Average Utilisation Rate (%)
312
Company Note
Singapore
Current price:
Target price:
Previous target:
Up/downside:
S$0.47
S$0.49
S$0.49
3.6%
Reuters:
Bloomberg:
Market cap:
YOMA.SI
YOMA SP
US$577.1m
S$815.4m
US$1.62m
S$2.28m
1,157m
58.1%
Despite a slower FY3/16F, property sales may come back in FY3/17F, pending a
peaceful handover of power.
The group to open more KFC stores in the remaining part of FY16 and FY17.
Management is committed to continuing to expand its non-real estate businesses.
Maintain Hold with a target price of S$0.49 based on 35% discount to FY16 RNAV.
0.590
105.9
0.490
91.6
0.390
77.3
0.290
30
63.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
4.4
8.9
3M
27.0
27.3
12M
-16.9
-4.1
Back from years of military rule and western sanctions, Myanmar has enormous scope
to catch up with its ASEAN peers. The World Bank and IMF expect Myanmars GDP to
expand at a high single-digits growth rate in 2015/2016, topping the rest of the ASEAN
bloc. Independent researchers believe that there are plenty of investment opportunities
in various areas such as consumer goods, education, financial services, infrastructure,
telecommunication, tourism, etc.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
100.5
25.63
16.39
0.011
(17%)
41.2
0%
24.76
NA
1.5%
1.46
3.90%
Mar-15A
110.9
20.06
28.05
0.006
(47%)
77.1
0%
35.35
NA
2.5%
1.23
1.67%
Mar-16F
107.5
11.65
9.73
0.003
(45%)
139.2
0%
71.80
31.03
(0.3%)
1.26
0.89%
0%
0.56
Mar-17F
172.2
36.48
24.41
0.014
317%
33.4
0%
21.93
20.54
(5.3%)
1.21
3.70%
0%
0.88
Mar-18F
332.2
82.13
53.84
0.031
121%
15.2
0%
8.77
8.80
(16.0%)
1.12
7.70%
0%
0.69
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BY THE NUMBERS
1M
3M
Relative
8.9
27.3
Absolute
4.4
27.0
Major shareholders
12M
-4.1
-16.9
% held
Serge Pun
37.1
Aberdeen
10.1
8.1
P/BV vs ROE
3.00
8.0%
2.50
6.7%
2.00
5.3%
1.50
4.0%
1.00
2.7%
0.50
1.3%
0.00
Jan-12
0.0%
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Growth
160
140
120
100
80
60
40
20
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
350%
294%
238%
181%
125%
69%
13%
-44%
-100%
ROE (rhs)
Mar-14A
101.3
45.4
25.6
(1.7)
23.9
(0.5)
(0.1)
(0.3)
23.1
Mar-15A
113.2
47.9
20.1
(3.0)
17.0
(0.9)
(0.3)
9.8
25.6
Mar-16F
107.5
46.5
11.7
(5.2)
6.5
(4.8)
1.8
6.8
10.3
Mar-17F
172.2
75.3
36.5
(5.2)
31.3
(1.9)
1.8
0.0
31.2
Mar-18F
332.2
139.9
82.1
(5.2)
76.9
(1.9)
1.8
0.0
76.9
23.1
(1.6)
2.5
23.9
(7.5)
25.6
(3.9)
17.6
39.3
(11.3)
10.3
(0.2)
0.0
10.1
(0.4)
31.2
(4.3)
0.0
26.9
(2.5)
76.9
(11.2)
0.0
65.7
(11.9)
16.4
14.2
14.2
28.1
8.6
8.6
9.7
5.9
5.9
24.4
24.4
24.4
53.8
53.8
53.8
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm
Mar-14A
25.6
Mar-15A
20.1
Mar-16F
11.7
Mar-17F
36.5
Mar-18F
82.1
(52.4)
(41.4)
9.6
9.1
23.3
(1.2)
5.1
8.0
1.2
1.2
0.6
(0.2)
29.7
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.6
(4.3)
43.1
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.6
(11.2)
96.1
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.0
0.0
0.0
(5.4)
(5.4)
20.9
26.3
26.3
(2.5)
(2.5)
37.2
39.7
39.7
(2.5)
(2.5)
90.2
92.7
92.7
0.2
(1.6)
(29.3)
(2.6)
0.0
(33.5)
(10.7)
(46.8)
(6.1)
0.0
(5.8)
(1.4)
(13.2)
(89.3)
(82.2)
(76.1)
0.2
(4.4)
(20.4)
(12.1)
0.2
(224.1)
(9.4)
(245.5)
11.3
258.9
0.0
(1.2)
269.0
3.2
(254.6)
(265.9)
314
BY THE NUMBERS
Balance Sheet
(S$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Mar-14A
16.7
86.1
0.7
72.7
176.2
4.6
275.8
12.7
14.0
307.1
0.0
Mar-15A
20.0
89.2
14.1
219.2
342.5
16.6
417.2
32.2
25.6
491.6
10.0
Mar-16F
40.9
89.2
14.1
219.2
363.4
16.6
411.9
0.0
25.6
454.1
10.0
Mar-17F
78.1
89.2
14.1
219.2
400.6
16.6
401.5
0.0
25.6
443.8
10.0
Mar-18F
168.3
89.2
14.1
219.2
490.8
16.6
377.1
0.0
25.6
419.3
10.0
39.4
3.0
42.4
22.9
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
0.0
22.9
0.0
65.2
371.5
46.5
418.0
0.0
28.6
0.0
101.9
661.8
70.4
732.2
0.0
28.6
0.0
101.9
647.7
67.9
715.6
0.0
28.6
0.0
101.9
672.1
70.4
742.5
0.0
28.6
0.0
101.9
725.9
82.3
808.2
Mar-14A
66.2%
59%
25.5%
(0.005)
0.32
39.28
7.0%
NA
220.5
7.75
243.4
39.1%
5.55%
4.64%
Mar-15A
10.4%
(22%)
18.1%
(0.011)
0.38
13.67
15.3%
NA
288.4
41.30
276.1
11.5%
2.87%
3.43%
Mar-16F
(3.1%)
(42%)
10.8%
0.001
0.37
1.19
1.5%
NA
303.7
84.63
356.7
1.9%
0.92%
1.81%
Mar-17F
60.2%
213%
21.2%
0.023
0.39
12.51
13.8%
NA
189.1
53.17
224.1
10.4%
4.15%
3.46%
Mar-18F
93.0%
125%
24.7%
0.075
0.42
30.77
14.5%
NA
98.0
26.78
112.9
25.5%
9.53%
7.71%
Mar-14A
16.3%
27.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-15A
-44.5%
31.4%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-16F
13.4%
9.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-17F
124.2%
19.5%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-18F
171.7%
24.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Return On Average Assets
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
315
Appendices
316
BBG code
08/12/2015
Closing
Price
Company name
Aviation
SIA Engineering
SIE SP
3.57
Singapore Airlines
SIA SP
10.98
Tiger
Airways
TGR SP
0.41
Commodities
CWT Limited
CWT SP
1.92
First Resources Ltd
FR SP
1.99
Golden Agri-Resources
GGR SP
0.34
Indofood Agri Resources
IFAR SP
0.50
Wilmar International
WIL SP
2.94
Conglomerates
Boustead Singapore Ltd
BOCS SP
0.91
GL Limited
GLL SP
0.85
Keppel Corporation
KEP SP
6.42
Sembcorp Industries
SCI SP
3.03
ST Engineering
STE SP
2.90
YOMA SP Yoma Strategic Holdings
0.47
Consumer Discretionary
COURTS SP Courts Asia
0.38
DFI SP
Dairy Farm Int'l
5.82
EYSAN SP Eu Yan Sang Int'l Ltd
0.43
OSIM SP
OSIM International
1.06
SSG SP
Sheng Siong Group
0.85
STCO SP
Straco Corporation
0.86
Consumer Staples
DELM SP
Del Monte Pacific
0.29
FNN SP
Fraser & Neave
2.18
PETRA SP Petra Foods
2.23
SUPER SP Super Group
0.86
THBEV SP Thai Beverage
0.70
Financial Services
DBS SP
DBS Group
16.61
OCBC SP
OCBC
8.75
SGX SP
Singapore Exchange
7.54
UOB SP
United Overseas Bank
19.46
Health Care
IHH SP
IHH Healthcare
2.11
QNM SP
Q&M Dental Group
0.72
RFMD SP
Raffles Medical Group
4.24
TKMED SP Talkmed Group Ltd
1.00
TIAN SP
Tianjin Zhongxin Pharmaceutical Group
1.12
Industrial Goods and Services
CEWL SP
China Everbright Water
0.67
RSTON SP Riverstone Holdings
2.20
Target % up /
price (down)
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
Mar 15
Mar 15
Mar 15
2.94x
0.99x
4.61x
2.88x
0.95x
3.83x
2.81x
0.91x
3.15x
13.7%
3.7%
-10.8%
14.4%
4.7%
18.7%
15.0%
5.0%
19.5%
21.5x
27.1x
-42.0x
20.2x
20.7x
22.4x
19.0x
18.6x
17.7x
0.7%
30.8%
na.
-32%
-29%
-1%
-34%
-26%
-37%
4.1%
2.2%
0.0%
4.4%
2.3%
0.0%
Dec
Dec
Dec
Dec
Dec
14
14
14
14
14
1.41x
1.93x
0.35x
0.47x
0.82x
1.29x
1.76x
0.34x
0.45x
0.78x
1.18x
1.58x
0.34x
0.43x
0.74x
13.4%
11.7%
2.1%
2.2%
6.7%
13.3%
13.8%
1.8%
4.1%
7.4%
12.7%
15.4%
2.3%
4.6%
7.9%
10.8x
17.2x
15.8x
21.9x
12.9x
10.1x
13.4x
18.0x
11.2x
11.1x
9.7x
10.8x
14.6x
9.6x
9.9x
1.8%
6.1%
0.0%
-3.3%
6.2%
111%
20%
26%
29%
74%
122%
17%
29%
29%
79%
3.7%
1.7%
1.6%
0.5%
2.4%
2.1%
2.2%
1.7%
0.8%
2.8%
ROAE (recurring) %
2015
2016
2017
3-Yr
P/E (Recurrent FD) (X)
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
4.02
12.83
0.41
13%
17%
0%
Hold
Add
Hold
19%
44%
44%
2,836
9,041
726
1.98
2.38
0.35
0.60
3.36
3%
20%
3%
20%
14%
Hold
Add
Reduce
Hold
Hold
40%
31%
50%
30%
30%
814
2,233
3,065
489
13,152
1.06
1.26
7.12
3.85
3.33
0.49
17%
49%
11%
27%
15%
4%
Add
Add
Hold
Add
Hold
Hold
45%
33%
60%
50%
38%
58%
332
818
8,230
3,829
6,369
577
Mar 15
Jun 15
Dec 14
Dec 14
Dec 14
Mar 15
1.43x
0.67x
1.04x
0.87x
4.10x
1.25x
1.43x
0.65x
0.97x
0.81x
3.91x
1.22x
1.34x
0.64x
0.92x
0.76x
3.72x
1.14x
11.1%
4.2%
11.5%
9.2%
23.2%
1.1%
10.4%
4.6%
12.3%
9.6%
23.6%
3.0%
10.7%
4.7%
11.2%
10.2%
24.4%
6.8%
12.1x
15.6x
9.4x
9.9x
17.9x
116.4x
13.8x
14.4x
8.2x
8.7x
16.9x
41.1x
13.0x
13.6x
8.4x
7.7x
15.6x
17.5x
-15.9%
8.2%
-9.5%
-4.4%
2.9%
53.6%
-20%
27%
52%
50%
-19%
3%
-32%
25%
47%
48%
-16%
0%
2.8%
2.6%
5.7%
5.2%
4.7%
0.0%
2.6%
2.6%
5.5%
4.1%
4.7%
0.0%
0.46
10.00
0.25
1.13
0.95
1.00
21%
72%
-42%
7%
12%
16%
Add
Add
Reduce
Reduce
Add
Add
18%
22%
58%
37%
28%
18%
141
7,870
136
556
905
518
Mar 15
Dec 14
Jun 15
Dec 14
Dec 14
Dec 14
0.66x
5.00x
1.19x
1.95x
5.28x
3.34x
0.62x
4.45x
1.16x
1.95x
5.15x
2.91x
0.59x
3.90x
1.12x
1.87x
5.02x
2.51x
6.5%
30.5%
-1.5%
11.6%
23.2%
24.4%
8.1%
30.2%
5.0%
14.6%
25.0%
23.0%
9.5%
30.0%
7.5%
15.7%
25.8%
23.4%
10.4x
17.2x
-80.1x
16.2x
23.0x
14.7x
7.9x
15.6x
23.5x
13.2x
20.9x
13.5x
6.4x
13.9x
15.3x
12.2x
19.7x
11.5x
17.7%
4.3%
159.7%
-12.3%
9.3%
18.6%
72%
53%
92%
-54%
-50%
-27%
61%
44%
50%
-55%
-52%
-35%
3.9%
4.0%
1.4%
5.7%
3.9%
2.9%
5.1%
4.0%
2.3%
6.1%
4.3%
3.2%
0.49
1.85
1.79
0.74
0.83
70%
-15%
-20%
-14%
19%
Add
Reduce
Reduce
Reduce
Add
26%
12%
37%
27%
33%
399
2,229
965
679
12,352
Apr 15
Sep 14
Dec 14
Dec 14
Dec 14
1.32x
1.73x
3.84x
1.91x
3.92x
1.11x
1.57x
3.64x
1.86x
3.65x
0.60x
1.42x
3.38x
1.81x
3.39x
4.8%
8.2%
8.3%
8.1%
26.3%
17.5%
8.4%
12.3%
10.0%
21.3%
13.1%
9.2%
16.0%
10.6%
21.3%
29.1x
22.1x
42.3x
23.7x
15.7x
6.9x
19.5x
30.3x
18.8x
17.7x
6.0x
16.1x
21.9x
17.4x
16.5x
na.
-0.8%
-4.1%
-7.1%
4.5%
505%
-12%
-30%
-19%
14%
417%
-23%
-31%
-20%
6%
0.0%
2.3%
1.9%
3.6%
3.7%
0.0%
2.6%
2.2%
4.0%
3.8%
19.58
10.88
7.98
20.00
18%
24%
6%
3%
Add
Add
Hold
Hold
70%
65%
63%
80%
29,419
25,487
5,719
22,064
Dec 14
Dec 14
Jun 15
Dec 14
1.03x
1.04x
7.98x
1.10x
0.98x
0.98x
7.43x
1.03x
0.93x
0.91x
6.94x
0.96x
11.4%
11.6%
36.9%
11.7%
10.2%
10.9%
36.9%
9.4%
10.7%
11.4%
36.1%
10.4%
9.3x
9.0x
22.3x
9.7x
9.8x
9.2x
20.9x
11.3x
8.8x
8.3x
19.9x
9.6x
3.8%
3.3%
6.8%
-0.4%
N.A>
N.A>
-86%
N.A>
N.A>
N.A>
-91%
N.A>
4.2%
4.1%
3.8%
3.7%
4.0%
4.6%
4.1%
3.2%
2.52
0.84
4.67
1.30
1.40
20%
17%
10%
30%
25%
Add
Add
Hold
Add
Add
18%
39%
48%
16%
100%
12,281
395
1,725
465
2,078
Dec
Dec
Dec
Dec
Dec
14
14
14
14
14
2.60x
5.58x
4.23x
11.23x
1.42x
2.47x
5.19x
3.92x
9.69x
1.36x
2.34x
4.77x
3.61x
8.42x
1.26x
5.0%
12.4%
11.8%
70.5%
9.8%
6.2%
14.5%
12.9%
61.6%
9.5%
6.7%
16.8%
13.2%
55.5%
9.7%
52.1x
46.2x
36.4x
17.2x
16.8x
40.9x
37.2x
31.5x
16.9x
14.7x
35.7x
29.5x
28.4x
16.2x
13.5x
27.3%
25.1%
8.9%
1.1%
5.4%
12%
10%
-9%
-101%
-7%
10%
24%
1%
-101%
2%
0.3%
1.2%
1.3%
4.0%
2.1%
0.5%
1.3%
1.3%
4.2%
2.1%
0.94
2.15
41%
-2%
Add
Hold
18%
33%
1,228
577
Dec 14
Dec 14
1.29x
5.24x
1.20x
4.25x
1.10x
3.68x
5.7%
24.3%
7.5%
23.6%
8.5%
21.9%
23.8x
24.1x
16.4x
19.9x
13.4x
18.0x
22.6%
33.4%
41%
-23%
65%
-26%
0.0%
2.0%
0.0%
2.2%
317
BBG code
08/12/2015
Closing
Price
Company name
Land Transport
CD SP
ComfortDelGro
MRT SP
SMRT Corporation
Media
SPH SP
Singapore Press Holdings
Oil Equipment and Services
CSE SP
CSE Global
EZI SP
Ezion Holdings
EZRA SP
Ezra Holdings
MMT SP
Mermaid Maritime
MTQ SP
MTQ Corporation Ltd
NCL SP
Nam Cheong
PACRA SP Pacific Radiance
SMM SP
Sembcorp Marine
SWIB SP
Swiber Holdings
SWCH SP Swissco Holdings
VARD SP
Vard Holdings Ltd
YZJSGD SP Yangzijiang Shipbuilding
Property
CAPL SP
CapitaLand
CIT SP
City Developments
FCL SP
Frasers Centrepoint Ltd
GLP SP
Global Logistic Properties
GUOL SP
Guocoland
HOBEE SP Ho Bee Land
OUE SP
Overseas Union Enterprise
PREH SP
Perennial Real Estate Holdings
UEM SP
United Engineers
UOL SP
UOL Group
WINGT SP Wing Tai Holdings
REITS
AREIT SP
Ascendas REIT
ART SP
Ascott Residence Trust
CACHE SP Cache Logistics Trust
CREIT SP
Cambridge Industrial Trust
CCT SP
CapitaLand Commercial Trust
CT SP
CapitaLand Mall Trust
CDREIT SP CDL Hospitality Trust
CRT SP
Croesus Retail Trust
FEHT SP
Far East Hospitality Trust
FIRT SP
First REIT
FCT SP
Frasers Centrepoint Trust
FCOT SP
Frasers Commercial Trust
KREIT SP
Keppel REIT
Target % up /
price (down)
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
ROAE (recurring) %
2015
2016
2017
3-Yr
P/E (Recurrent FD) (X)
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
3.05
1.50
3.17
1.37
4%
-9%
Hold
Reduce
59%
38%
4,642
1,618
Dec 14
Mar 15
2.80x
2.57x
2.65x
2.45x
2.51x
2.33x
13.2%
9.6%
14.2%
8.9%
14.4%
10.3%
21.7x
27.5x
19.1x
28.2x
17.9x
23.2x
8.1%
5.5%
-1%
77%
-43%
88%
2.9%
1.9%
3.3%
1.8%
3.85
3.85
0%
Reduce
90%
4,353
Aug 15
1.74x
1.79x
1.83x
8.4%
7.5%
7.6%
20.6x
23.5x
23.8x
-8.8%
12%
13%
5.1%
4.9%
0.47
0.59
0.10
0.16
0.50
0.13
0.31
1.82
0.21
0.22
0.27
1.10
0.55
0.95
0.12
0.23
0.59
0.11
0.41
1.88
0.50
0.52
0.23
1.21
18%
62%
18%
41%
18%
-15%
35%
3%
144%
137%
-13%
10%
Add
Add
Reduce
Add
Hold
Reduce
Add
Reduce
Reduce
Add
Reduce
Hold
64%
59%
64%
23%
41%
49%
24%
37%
70%
42%
44%
38%
170
653
216
160
55
187
156
2,691
67
105
226
2,970
Dec 14
Dec 14
Aug 14
Dec 14
Mar 15
Dec 14
Dec 14
Dec 14
Dec 13
Dec 14
Dec 14
Dec 14
1.05x
0.50x
0.18x
0.27x
0.62x
0.66x
0.36x
1.23x
0.17x
0.35x
0.55x
0.84x
0.99x
0.46x
0.18x
0.26x
0.63x
0.64x
0.35x
1.16x
0.18x
0.36x
0.56x
0.78x
0.93x
0.40x
na
0.24x
0.61x
0.62x
0.34x
1.10x
na
0.35x
0.58x
0.73x
13.6%
7.5%
1.2%
4.4%
-0.1%
5.5%
2.4%
7.8%
0.4%
15.6%
-0.3%
14.3%
11.9%
9.6%
1.3%
4.7%
1.8%
5.2%
3.4%
10.4%
-4.1%
7.4%
-2.1%
11.5%
12.5%
8.0x
12.3%
6.7x
na
15.7x
7.8%
6.2x
5.4% -611.3x
4.2%
11.9x
4.6%
15.1x
10.6%
16.0x
na
55.6x
10.0%
2.5x
-4.2% -200.8x
8.5%
6.2x
8.5x
5.0x
13.7x
5.6x
34.7x
12.4x
10.4x
11.5x
-5.5x
5.0x
-26.5x
7.0x
7.7x
3.5x
na
3.2x
11.5x
14.9x
7.5x
10.7x
na
3.6x
-13.5x
8.9x
-3.9%
-0.2%
na.
7.3%
-17.4%
-43.8%
-33.3%
-14.0%
na.
-11.7%
na.
-14.9%
-8%
104%
110%
12%
12%
58%
82%
68%
146%
71%
353%
15%
-25%
88%
115%
68%
9%
63%
92%
68%
199%
78%
386%
4%
5.9%
0.2%
0.0%
4.0%
5.0%
1.5%
1.7%
3.0%
0.0%
9.5%
0.0%
4.9%
4.8%
0.2%
0.0%
4.4%
4.0%
1.5%
2.6%
4.2%
0.0%
9.5%
0.0%
4.3%
3.26
7.15
1.71
2.03
1.85
2.00
1.77
0.98
2.03
6.15
1.73
4.06
10.47
2.04
3.18
2.73
2.68
3.32
1.39
3.03
8.24
2.05
25%
46%
19%
57%
48%
34%
88%
42%
49%
34%
19%
Add
Add
Add
Add
Add
Add
Add
Add
Add
Add
Hold
54%
43%
12%
57%
32%
27%
33%
21%
70%
52%
50%
9,802
4,602
3,504
6,810
1,545
941
1,128
1,148
916
3,466
953
Dec 14
Dec 14
Sep 15
Mar 15
Jun 15
Dec 14
Dec 12
Jun 14
Dec 14
Dec 14
Jun 15
0.80x
0.77x
0.62x
0.76x
0.64x
0.51x
0.38x
0.58x
0.70x
0.61x
0.42x
0.77x
0.73x
0.59x
0.75x
0.58x
0.50x
0.38x
0.57x
0.68x
0.58x
0.41x
0.69x
0.68x
0.54x
0.73x
0.56x
0.48x
na
0.55x
0.67x
0.56x
0.41x
4.2%
6.9%
7.9%
2.0%
3.8%
2.5%
2.8%
0.1%
3.5%
5.5%
1.9%
4.2%
7.2%
7.9%
3.2%
3.3%
3.0%
1.8%
2.0%
5.1%
5.6%
2.8%
4.6%
11.9%
9.1%
3.9%
5.9%
4.2%
na
3.0%
3.6%
6.0%
3.1%
22.7x
11.4x
8.2x
38.4x
17.9x
20.2x
13.6x
726.6x
20.1x
11.2x
22.2x
22.1x
10.4x
7.7x
23.3x
18.5x
16.9x
20.5x
28.4x
13.6x
10.5x
14.7x
18.7x
5.9x
6.2x
19.1x
9.7x
11.7x
na
18.8x
19.0x
9.6x
13.3x
75.3%
19.8%
15.2%
39.6%
17.9%
43.1%
na.
na.
na.
-6.7%
9.2%
38%
7%
84%
11%
140%
53%
28%
46%
58%
26%
9%
25%
11%
81%
29%
58%
54%
20%
67%
55%
17%
9%
4.0%
2.6%
2.9%
2.9%
3.7%
3.1%
3.7%
0.3%
3.4%
2.7%
2.4%
2.6%
2.9%
2.9%
2.9%
3.3%
3.1%
2.5%
0.9%
3.4%
2.9%
1.8%
2.38
1.18
0.91
0.58
1.33
1.91
1.32
0.79
0.65
1.19
1.87
1.30
0.96
2.57
1.30
1.08
0.73
1.65
2.28
1.59
1.00
0.70
1.48
2.22
1.62
1.15
8%
10%
19%
26%
24%
19%
20%
27%
8%
25%
19%
25%
20%
Add
Hold
Add
Hold
Add
Add
Add
Add
Hold
Add
Add
Add
Add
83%
61%
88%
67%
68%
70%
67%
90%
61%
66%
49%
72%
55%
4,059
1,288
574
533
2,780
4,787
922
356
817
632
1,214
724
2,174
Mar 15
Dec 14
Dec 14
Dec 14
Dec 14
Dec 14
Dec 14
Jun 15
Dec 14
Dec 14
Sep 15
Sep 15
Dec 14
1.07x
0.73x
0.94x
0.86x
0.76x
1.05x
0.80x
0.83x
0.67x
1.21x
0.98x
0.83x
0.69x
1.05x
0.74x
0.94x
0.87x
0.76x
0.95x
0.80x
0.88x
0.67x
1.22x
1.00x
0.80x
0.69x
1.06x
0.76x
0.95x
0.89x
0.76x
0.95x
0.79x
0.93x
0.68x
1.24x
1.00x
0.81x
0.70x
7.0%
4.2%
6.5%
5.9%
5.1%
7.3%
6.2%
4.9%
4.4%
7.9%
6.0%
6.0%
4.1%
7.4%
4.3%
7.6%
6.2%
5.9%
6.1%
6.5%
7.0%
4.4%
8.2%
6.5%
5.6%
4.5%
7.6%
4.1%
8.2%
6.4%
6.2%
6.1%
6.6%
7.3%
4.5%
8.5%
6.7%
5.7%
4.9%
15.8x
18.0x
14.4x
14.3x
14.9x
14.4x
12.9x
17.2x
15.3x
15.0x
16.5x
13.7x
16.7x
14.4x
17.0x
12.4x
13.9x
12.9x
16.4x
12.2x
12.1x
15.1x
14.8x
15.2x
14.5x
15.3x
13.9x
18.5x
11.5x
13.7x
12.4x
15.6x
12.1x
12.4x
15.1x
14.6x
15.0x
14.2x
14.1x
8.5%
3.9%
2.7%
1.4%
-5.1%
-2.2%
0.6%
34.0%
0.2%
3.7%
5.4%
0.8%
10.2%
46%
64%
53%
59%
22%
33%
51%
95%
40%
51%
40%
55%
55%
55%
71%
53%
61%
22%
27%
50%
91%
42%
52%
43%
45%
54%
6.6%
7.1%
7.5%
8.8%
6.7%
5.9%
7.9%
9.4%
7.5%
7.2%
6.3%
7.6%
7.2%
7.0%
7.2%
9.1%
9.0%
6.9%
6.1%
8.4%
9.3%
7.6%
7.3%
6.5%
8.0%
7.2%
318
BBG code
08/12/2015
Closing
Price
Company name
REITS - cont'd
LMRT SP
Lippo Malls Indonesia Retail Trust0.31
0.40
MCT SP
Mapletree Commercial Trust
1.32
1.44
MAGIC SP Mapletree Greater China Commercial
0.93Trust 1.20
MINT SP
Mapletree Industrial Trust
1.52
1.66
MLT SP
Mapletree Logistics Trust
1.01
1.17
OUECT SP OUE Commercial REIT
0.69
0.81
OUEHT SP OUE Hospitality Trust
0.79
0.98
PREIT SP
Parkway Life REIT
2.26
2.56
RHT SP
Religare Health Trust
0.99
1.06
SPHREIT SP SPH REIT
0.94
1.07
SGREIT SP Starhill Global REIT
0.77
0.87
SUN SP
Suntec REIT
1.57
1.73
Services
KPTT SP
Keppel T&T
1.43
1.91
OEL SP
Overseas Education Ltd
0.52
0.74
SPOST SP Singapore Post Ltd
1.79
2.04
Shipping
NOL SP
Neptune Orient Lines
1.22
1.30
Technology
IP SP
Innovalues Ltd
0.75
0.93
MTEC SP
Memtech International
0.13
0.20
SARINE SP Sarine Technologies Ltd
1.34
1.77
SILV SP
Silverlake Axis Ltd
0.70
0.65
UMSH SP
UMS Holdings Ltd
0.51
0.66
VMS SP
Venture Corporation
8.44
10.11
Telecommunications
APTT SP
Asian Pay Television Trust
0.71
1.28
M1 SP
M1 Limited
2.79
3.10
ST SP
SingTel
3.85
4.50
STH SP
StarHub
3.58
3.80
Transport Infrastructure
CMH SP
China Merchants Holdings Pacific0.91
1.02
SATS SP
SATS Ltd
3.80
3.98
Travel and Leisure
GENHK SP Genting Hong Kong
0.32
0.44
GENS SP
Genting Singapore
0.78
0.81
Utilities
CEL SP
CITIC Envirotech
1.45
1.80
FSSTI
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
29%
10%
30%
9%
16%
18%
24%
13%
8%
14%
12%
10%
Add
Hold
Add
Hold
Add
Add
Add
Add
Hold
Hold
Hold
Hold
76%
63%
28%
70%
59%
44%
58%
57%
72%
25%
54%
93%
614
1,974
1,800
1,921
1,767
628
747
968
556
1,686
1,189
2,802
Dec 14
Mar 15
Mar 15
Mar 15
Mar 15
Dec 14
Dec 14
Dec 14
Mar 15
Aug 15
Dec 15
Dec 14
0.74x
1.06x
0.71x
1.15x
0.98x
0.53x
0.88x
1.33x
1.03x
1.00x
0.85x
0.74x
0.74x
1.07x
0.67x
1.15x
0.98x
0.53x
0.89x
1.33x
1.05x
1.00x
0.85x
0.74x
0.74x
1.07x
0.64x
1.15x
0.98x
0.54x
0.89x
1.33x
1.06x
1.00x
0.85x
0.75x
6.8%
6.1%
4.1%
7.8%
7.4%
2.7%
6.1%
7.1%
5.9%
5.0%
5.7%
3.4%
7.0%
6.3%
4.0%
8.0%
7.6%
3.0%
6.8%
7.3%
7.4%
5.1%
5.8%
3.7%
7.1%
6.4%
3.8%
9.5%
7.7%
3.2%
7.5%
7.4%
8.7%
5.3%
6.1%
4.1%
10.7x
17.4x
18.1x
14.9x
13.3x
22.7x
14.3x
18.7x
18x
20x
14.9x
21.5x
10.5x
17.1x
17.2x
14.4x
12.9x
17.5x
13.0x
18.3x
14.1x
19.6x
14.5x
19.8x
10.5x
16.9x
17.1x
12.1x
12.7x
16.8x
12.0x
17.9x
12.1x
18.8x
14.0x
18.4x
8.6%
2.4%
6.3%
7.2%
2.3%
na.
3.2%
5.5%
15.5%
0.8%
2.5%
-3.2%
35%
57%
57%
43%
53%
68%
69%
53%
16%
32%
54%
53%
32%
57%
61%
52%
68%
65%
71%
53%
22%
32%
54%
54%
10.1%
6.1%
7.7%
6.9%
7.6%
6.7%
8.5%
5.9%
7.8%
5.9%
5.5%
6.4%
10.4%
6.2%
8.3%
7.1%
7.8%
7.6%
9.1%
5.4%
8.7%
6.0%
6.8%
6.3%
33%
43%
14%
Add
Add
Add
19%
36%
74%
563
151
2,728
Dec 14
Dec 14
Mar 15
1.29x
1.30x
2.62x
1.33x
1.26x
2.50x
1.36x
1.21x
2.46x
9.6%
8.8%
10.8%
12.3%
6.3%
10.3%
14.2%
8.4%
10.9%
12.6x
15.2x
27.1x
10.6x
20.2x
25.7x
9.5x
14.7x
23.2x
5.2%
-12.9%
12.0%
52%
43%
-25%
66%
33%
-13%
2.4%
3.3%
3.8%
2.4%
2.5%
3.9%
7%
Hold
30%
2,246
Dec 14
0.92x
0.97x
1.05x
-9.3%
-5.0%
-7.9%
-11.5x
-18.7x
-12.8x
-10.7%
116%
115%
0.0%
0.0%
24%
54%
33%
-7%
30%
20%
Add
Add
Hold
Hold
Add
Add
55%
50%
58%
33%
76%
92%
173
65
330
1,321
155
1,653
Dec 14
Dec 14
Dec 14
Jun 15
Dec 14
Dec 14
2.80x
0.56x
4.64x
8.87x
1.11x
1.24x
2.39x
0.53x
3.99x
8.66x
1.06x
1.22x
2.05x
0.51x
3.21x
8.27x
1.01x
1.18x
29.0%
5.9%
2.5%
43.9%
14.4%
8.1%
27.1%
7.2%
33.1%
41.0%
14.7%
8.9%
26.5%
7.8%
36.8%
46.3%
15.5%
10.3%
10.8x
9.6x
173.5x
20.4x
7.8x
15.3x
9.6x
7.6x
13.0x
21.4x
7.4x
13.8x
8.4x
6.7x
9.7x
18.3x
6.7x
11.7x
22.3%
15.2%
8.5%
3.5%
9.6%
13.2%
-36%
-32%
-71%
-51%
-25%
-12%
-45%
-31%
-69%
-49%
-28%
-12%
4.3%
5.2%
3.2%
4.6%
9.8%
5.9%
5.1%
6.6%
4.2%
4.2%
9.8%
5.9%
80%
11%
17%
6%
Add
Hold
Add
Hold
97%
39%
44%
33%
722
1,850
43,448
4,379
Dec 14
Dec 14
Mar 15
Dec 14
0.81x
6.34x
2.41x
32.6x
0.83x
6.12x
2.31x
28.2x
0.86x
5.91x
2.21x
23.2x
5.4%
46.0%
14.9%
228%
7.1%
46.9%
15.0%
183%
8.2%
44.5%
15.2%
161%
14.8x
14.0x
16.4x
16.1x
11.5x
13.3x
15.7x
16.5x
10.3x
13.5x
14.9x
15.8x
-5.7%
2.8%
3.3%
1.8%
88%
62%
34%
212%
93%
63%
37%
183%
11.6%
7.1%
4.5%
5.6%
12.1%
7.5%
4.8%
5.6%
13%
5%
Add
Hold
23%
56%
1,150
2,989
Dec 14
Mar 15
0.85x
2.81x
0.86x
2.71x
0.85x
2.61x
7.5%
14.9%
5.9%
15.3%
6.6%
15.5%
11.5x
19.8x
14.5x
18.5x
13.0x
17.7x
-10.9%
8.3%
68%
-20%
62%
-19%
7.7%
4.1%
6.6%
4.4%
38%
4%
Add
Hold
20%
40%
2,714
6,583
Dec 13
Dec 14
0.77x
0.97x
1.18x
0.95x
na
0.92x
7.9%
1.8%
10.4%
3.5%
na
4.2%
10.6x
54.3x
9.6x
27.4x
na
22.3x
na.
-6.2%
-15%
-41%
14%
-45%
0.0%
1.3%
0.0%
1.3%
24%
Add
8%
1,157
Dec 14
1.92x
1.80x
1.67x
5.7%
6.6%
8.1%
37.0x
28.9x
22.0x
19.1%
36%
54%
0.4%
0.2%
Target % up /
price (down)
ROAE (recurring) %
2015
2016
2017
3-Yr
P/E (Recurrent FD) (X)
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
2,876
319
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investment decisions.
AAV, ADVANC, AMATA, ANAN, AOT, AP, ASP, BA, BANPU, BBL, BCH, BCP, BDMS, BEAUTY, BEC, BECL, BH, BJCHI, BLAND, BMCL, BTS,
CBG, CENTEL, CK, CPALL, CPF, CPN, DELTA, DEMCO, DTAC, EARTH, EGCO, ERW, GFPT, GLOBAL, GLOW, GUNKUL, HANA, HMPRO,
ICHI, INTUCH, IRPC, ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, LH, LHBANK, LOXLEY, LPN, M, MAJOR, MC, MINT, MONO, NOK, PACE,
PS, PSL, PTT, PTTEP, PTTGC, QH, RATCH, RCL, ROBINS, RS, S, SAMART, SAPPE, SAWAD, SCB, SCC, SF, SGP, SIRI, SOLAR, SPALI,
SPCG, STEC, STPI, SVI, TCAP, THAI, THCOM, TICON, TISCO, TMB, TOP, TPIPL, TRC, TRUE, TTA, TTCL, TTW, TUF, U, UNIQ, UV, VGI,
WHA
Corporate Governance Report:
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the
policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the
Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public
investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may
be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.
Score Range:
Description:
90 - 100
Excellent
80 - 89
Very Good
70 - 79
Good
Below 70 or
N/A
No Survey Result
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Distribution of stock ratings and investment banking clients for quarter ended on 30 September 2015
1528 companies under coverage for quarter ended on 30 September 2015
Rating Distribution (%)
Add
58.1%
6.0%
Hold
30.4%
3.5%
Reduce
10.9%
1.0%
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in
2015.
AAV Very Good, ADVANC Excellent, AEONTS Good, AMATA Very Good, ANAN Very Good, AOT Very Good, AP - Good, ASK Very
Good, ASP Very Good, BANPU Very Good , BAY Very Good , BBL Very Good, BCH not available, BCP - Excellent, BDMS Very
Good, BEAUTY Good, BEC - Good, BECL Very Good, BH - Good, BIGC - Excellent, BJC Good, BLA Very Good, BMCL - Very Good,
BTS - Excellent, CBG Good, CCET not available, CENTEL Very Good, CHG Good, CK Excellent, COL Very Good, CPALL Good,
CPF Very Good, CPN - Excellent, DELTA - Very Good, DEMCO Very Good, DTAC Excellent, EA not available, ECL Good, EGCO Excellent, EPG not available, GFPT - Very Good, GLOBAL Very Good, GLOW - Good, GRAMMY - Excellent, GUNKUL Very Good, HANA Excellent, HEMRAJ Very Good, HMPRO - Excellent, ICHI Very Good, INTUCH - Excellent, ITD Good, IVL - Excellent, JAS not available,
JASIF not available, JUBILE Good, KAMART not available, KBANK - Excellent, KCE - Excellent, KGI Good, KKP Excellent, KSL Very
Good, KTB - Excellent, KTC Very Good, LH - Very Good, LPN Excellent, M - Good, MAJOR - Good, MAKRO Good, MBKET Good, MC
Very Good, MCOT Excellent, MEGA Very Good, MINT - Excellent, MTLS Good, NYT Good, OISHI Very Good, PLANB Good, PS
Excellent, PSL - Excellent, PTT - Excellent, PTTEP - Excellent, PTTGC - Excellent, QH Very Good, RATCH Excellent, ROBINS Excellent,
RS Very Good, SAMART - Excellent, SAPPE - Good, SAT Excellent, SAWAD Good, SC Excellent, SCB - Excellent, SCBLIF not
available, SCC Excellent, SCCC - Good, SIM - Excellent, SIRI - Good, SPALI - Excellent, STA Very Good, STEC Very Good, SVI Very
Good, TASCO Very Good, TCAP Very Good, THAI Very Good, THANI Very Good, THCOM Excellent, THRE Very Good, THREL
Very Good, TICON Very Good, TISCO - Excellent, TK Very Good, TMB - Excellent, TPCH Good, TOP - Excellent, TRUE Very Good, TTW
Very Good, TU Very Good, VGI Excellent, WORK not available.
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Definition:
An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand,
Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were
based on a stocks total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months.
Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy:
expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on
Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or
more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total
returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected
negative total returns of 10% or more over the next 3 months.
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Jessalynn CHEN
+65 6210-8672 | jessalynn.chen@cimb.com
Commodities
CWT Ltd
Consumer Discretionary (Lifestyles)
Straco Corporation
Gaming
Genting Hong Kong
Genting Singapore
Media
Singapore Press Holdings
Services (Logistics)
Keppel Tel & Trans
Singapore Post Ltd
Jonathan SEOW
+65 6210-8671 | jonathanwp.seow@cimb.com
Healthcare
IHH Healthcare
Q&M Dental Group
Raffles Medical
FOONG Choong Chen, CFA
+60 (3) 2261-9081 | choongchen.foong@cimb.com
Telecommunications
M1 Ltd
Singapore Telecoms Ltd
Starhub Ltd
Raymond YAP, CFA
+60 (3) 2261-9072 | raymond.yap@cimb.com
Aviation (Airlines)
Singapore Airlines
Tiger Airways Holdings Ltd
Shipping (Container Shipping)
Neptune Orient Lines
Ivy NG, CFA
+60 (3) 2261-9073 | ivy.ng@cimb.com
Plantations
First Resources Ltd
Golden Agri
Indofood Agri
Wilmar International
Bertram LAI
+852 2532-1111 | bertram.lai@cimb.com
Telecommunications
Asian Pay Television Trust
Asia
China
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T: +852 2868-0380
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