Today's Focus
Frasers Centrepoint Trust - Expect acquisition of Changi City Point in FY14 to drive earnings. Maintain BUY and TP S$2.14.
Frasers Centrepoint Trust's 4Q13 DPU of 2.98Scts in line. In FY14, FCT will renew 32% of its income, out of which 75% will be derived from Causeway Point and Northpoint. We expect positive rental reversions from these two malls, given the strong shopper traffic and tenant sales. However, we expect more moderate reversion rates compared to previous years, as a significant amount of upside from the AEI works have already been captured. We expect the acquisition of Changi City Point in FY14 to drive earnings. Maintain BUY and TP S$2.14.
2Q14 results for Mapletree Industrial Trust in line. Distributable income came in 9.7% higher y-o-y at S$41.1m, translating to a DPU of 2.47 Scts. Operational performance remain strong and we expect robust reversionary trends for the quarter. DPU growth is expected to be underpinned by MINT's series of development and asset enhancement projects. Will provide more updates after meeting with management today.
Yoma announced that its 70% owned subsidiary German Car Industries Company (GCI) has signed a non-exclusive agreement with Volkswagen (VW) to operate VW's first service centre in Myanmar. This service centre will provide maintenance and repair services for VW branded vehicles, including the sale of spare parts for the replacement market. This centre is scheduled to commence operation this month. This is Yoma's second automotive service centre tie-up. The group signed its first service centre with Mitsubishi in May this year. We believe the automotive division is shaping up to be a strategic line of business for Yoma as we see the division expanding steadily. This announcement is positive but the impact is long term and not significant at this juncture. Near term, we look forward to a positive set of results with 2Q14 earnings growing y-o-y and q-o-q. The company is due to release results on 7 Nov. We maintain our BUY call on Yoma with TP of S$1.02.
C&G Environmental Protection Holdings entered into a letter of intent (LOI) with a potential Purchaser, a company listed on a stock exchange in the PRC, to facilitate the negotiation and finalisation of a definitive sale and purchase agreement of the Group's waste-to-energy business and assets (including concession rights) and its principal operating subsidiaries in the PRC. The consideration for the proposed sale is subject to further negotiations and shall be satisfied in part by cash and in part by the issue and allotment of quoted shares of the Purchaser.
Global Logistic Properties has signed lease agreements for totaling 25,000 sqm (269,000 sq ft) with Deppon Logistics at GLP Park Wangting in Suzhou, Eastern China and GLP Park Hunnan in Shenyang, Northeastern China.
Temasek Holdings has sold its entire direct stake in office landlord Keppel Reit (KReit) in a share placement. The deal involved 104m shares offered at a price range of between $1.195 and $1.21 per share. This represents a 1.6-1.8% discount to the trust's last closing price of $1.23 on Oct 21. The placement offer amounted to an estimated $125m. Temasek's share sale works out to 3.74% of KReit, representing the stake it had received from the dividend in specie distributed by Keppel Corp to its shareholders during its FY2012 final results.
Sino Grandness Food Industry Group has entered into a Cooperation Agreement (CA) with the Municipal Government of Anhui Province whereby the Group principally agrees to invest RMB600m to construct a production plant to produce canned products and beverage and the Municipal agree to provide assistance and support in land acquisition and infrastructure as well as necessary administrative services to facilitate the project.
Transview Holdings has received a non-binding approach for certain of its assets, which the Company is presently evaluating on a preliminary basis. However, no definitive terms are finalised at this moment and there is no assurance as to whether or not any transaction will take place.
Industrial property developer OKH Global plans to dispose of its IT business, which is separated from its core business, following a $123m reverse takeover of Chinese technology firm Sinobest. The company will divest itself of two units: Guangzhou Sinobest Information Technology and Sinobest
Technologies (HK). To do so, OKH intends to set up an intermediate holding company and transfer the shares it holds in the subsidiaries to the new company. In return, OKH will receive new shares in the holding company under a restructuring exercise. Subsequently, OKH will undertake a capital reduction exercise and distribute all the shares it owns in the holding company to its shareholders rather than distributing cash. OKH's shareholders will then hold shares in two separate companies: OKH and the holding company. The distribution will be made on the basis of one holding company share for every share held in OKH. Shares in the holding company will not be listed on the SGX. Shareholders who do not wish to own unlisted shares of the holding company can choose to sell their shares back to the holding company and receive cash instead.
In property news, at least 8,700 shoebox units are expected to hit the resale market between now and 2017, as the Seller's Stamp Duty (SSD) lock-in period approaches expiry. While this figure is more than double the current completed shoebox residential stock of 3,472 units, signs in the market suggest that demand for such resale units remains relatively resilient amid a slow-moving overall resale market. This figure, revealed in the latest report from the Singapore Real Estate Exchange (SRX), is predicated on a first wave of at least 805 resale units - comprising units bought between Aug 30, 2010 and Jan 13, 2011 - and a second wave of at least 7,910 units entering the market from 2015 to 2017.
US markets rose after a weaker-than-expected September non-farm payrolls (actual 148k, consensus 180k) figure underpinned expectation that the FED will postpone the start of QE tapering till around March 2014. The 10-year treasury yield fell to a 3-mth low at 2.51% while the USD Index dipped to 79.23. For the STI, we continue to see a near-term cap at 3250 and working towards 3330 by year-end on the assumption of a benign 3Q results season. Yield plays should be underpinned by the dip in long-bond yields.
Source: DBSV