Towards Financial Freedom
DBS Equity Research: Wired Daily 18 May 2015
Global Logistic Properties - 4Q15 results in line; maintain BUY, TP raised to S$3.17 as we roll forward valuations.
StarHub - Handset subsidies crimp profits; maintain HOLD with lower TP of S$4.12
4Q15 results for Global Logistic Properties in line; leasing momentum in major markets performing well. GLP has a robust development pipeline in FY16 and beyond. Development starts is expected to rise 30% y-o-y in FY16; the group is looking to launch new funds to deepen its reach in China. Maintain BUY, TP raised to S$3.17 (Prev S$ 2.98) as we roll forward valuations.
StarHub reported 1Q15 net profit of S$73.7m (-13% y-oy, 22% q-o-q), c.10% below our expectations. Higher handset subsidies and weak mobile revenue were the main issues. Excluding subsidies, results would have been mostly in line. We expect subsidies to decrease in subsequent quarters; FY15F forecast maintained. Final FY14 dividend of 5 Scts, in line; maintain HOLD with lower TP of S$4.12 (Prev S$4.35) as we factor 80% probability of the entry of 4th mobile operator.
3Q15 core net profit for Olam ahead of expectations on lower interest costs. Underlying EBITDA dipped 3% y-o-y due to continued weakness in the Food Staples segment. Olam delivered a second consecutive quarter of positive free cash flow to firm. However, the upcoming US$1.3b acquisition of ADM Cocoa (due in 3QCY2015), will delay Olam achieving its positive free cash flow targets. Combined with significant currency and commodity price volatility as a damper to its earnings, Olam's share price performance will be capped in our view. Maintain HOLD, TP lowered to S$2.16 (Prev S$ 2.20).
FY15 results for SATS slightly ahead; the 9% earnings growth was led by lower opex, associates' contribution. Final DPS of 9 Scts was declared, exceeding our 8-Sct expectations. Recovery in aviation is expected to take time. Maintain HOLD, but TP raised to S$3.06 (Prev S$ 2.84).
Ascendas Hospitality Trust (ASCHT) announced the divestment of Pullman Cairns International for A$78.1m (S$79.3m) which was 12% above the hotel's latest valuation of A$67m at end Mar15. We are supportive of the trust's strategic decision to sell its 50% stake in the hotel (worth A$37m) given the potential volatility in earnings as the property is located in a predominantly vacation destination and in one of Australia's smaller cities. The proceeds from the sale will be used to pare debt down as well as for future asset enhancement or acquisition opportunities. In addition, ASCHT intends to distribute up to S$2m to unit holders in FY16. ASCHT has also entered into a new fixed term building lease agreement with Sunroute Co Ltd to operate Osaka Namba Washington Hotel. We have adjusted FY15-16F DPU by 1-2% to account for the two announced transactions Maintain BUY, TP S$0.76.
EMS Energy announced that it will raise approximately S$2m from placing new shares to fund the Group's order book and for working capital. The placement price of 2.3 Singapore cents per share is equivalent to the last weighted average price.
Developer sales of private homes, excluding executive condominiums (ECs), surged in April to an 11-month high of 1,124 units but the volume is expected to ease dramatically again this month - as no major launches are expected. The 83.4% increase in developer sales from 613 units in March, as well as the 47.5% y-o-y improvement from 762 units in April 2014, was due to two large project launches - Frasers Centrepoint's North Park Residences in Yishun and UOL Group's Botanique at Bartley. The near-doubling month on month in the number of private residential units that developers sold came amid a more-than-trebling in the units launched - 1,344 in April, from 400 in March.
Source: DBS
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