Singapore Stock Market News

Guocoleisure - Hidden gem

StockFanatic
Publish date: Wed, 13 May 2015, 11:53 AM
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At 80% of our full-year forecast, GuocoLeisure (GLL)'s 9MFY6/15 core net profit was ahead of our expectations. The strong performance was due to improved hotel earnings and higher-than-expected savings in interest costs from debenture refinancing, partially offset by lower O&G royalty income from Bass Strait and unfavorable translation from a weakened GBP against US$. We raise our FY15-17 core EPS estimates by 5.8-16.0% to reflect the strong hotel earnings and lower-than-expected refinancing costs. We maintain an Add rating, with CY15 RNAV-based target price unchanged at S$1.18. Potential rerating catalysts include organic earnings expansion of the hotel business, a bounce in oil prices, and monetisation of non-core assets.
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