DBS Equity Research: Wired Daily 6 Nov 2015

kiasutrader

Publish date: Fri, 06 Nov 2015, 11:56 AM

CapitaLand - 3Q15 results in line. Maintain BUY with target price of S$3.73. Stock offers value, trading at attractive 0.8x P/Bk and 0.6x P/RNAV.

Capitaland (CAPL)'s 3Q15 net profit of S$192.7m (+48% yo-y) was in line with expectations. We maintain our BUY call with a target price of S$3.73 based on a 25% discount to our RNAV. We believe that CAPL offers value, trading at an attractive 0.8x P/Bk and 0.6x P/RNAV. We expect the group's strategy to focus on growing its commercial portfolio, and coupled with opportunistic asset recycling of mature assets into its listed REITs/funds will present upside to our earnings.

3Q16 results for Parkway Life REIT in line. Distributable income rose 15.6% to S$20.3m, inclusive of a divestment gain of S$2.3m (S$18.0m driven from core earnings). Thus, DPU rose by 15.6% to 3.36 Scts. DPU would have grown by 2.5% y-o-y from recurring operations. Parkway Life REIT (Plife REIT) offers one of the strongest earning visibilities among S-REITs, with a weighted average lease expiry of close to 9.9 years. Maintain BUY and TP S$S$2.56. The stock offers attractive yields of >5%.

China Merchant Holdings' 3Q15 core earnings largely in line. Revenue rose 4% y-o-y in 3Q to HK$549m on higher revenue from Yongtaiwen E'way and contribution from Jiurui E'way. Gross profit rose a quicker 8% y-o-y to HK$335m. However, due to significantly lower other income (-85% y-o-y to HK$7m) from 1) absence of negative goodwill of HK$22.8m in 3Q14, 2) lower deferred income and effective interest on other receivables recognised and 3) forex losses in 3Q15 vs gains in 3Q14, pretax profit fell by 7% y-o-y to HK$357m. Looking ahead, the consolidation of the three newly acquired roads should help drive better top and bottom line growth. More updates to follow.

3Q15 results for Riverstone above our expectations. Revenue surged 114%, mainly due to stronger than expected demand. Gross margins were lifted to 31.9% in 3Q15 from 23.5% in 3Q14. More updates after briefing today. We believe that Centurion's purpose built dormitory business is scalable, particularly in economic areas which rely heavily on foreign-sourced workers. Given its success in executing its aggressive bed growth strategy so far, we are optimistic about the Group's long-term potential. Maintain BUY, TP S$0.59.

800 Super Holdings has entered into a 60:40 non-binding memorandum of understanding (MOU) to form a JV with Zero Spot Laundry Service to undertake the business of providing laundry services to hospitals, as currently conducted by Zero Spot, and other industry.

The details of the Trans-Pacific Partnership (TPP) is out. The long-awaited text of a landmark US-backed Pacific trade deal was released on Thursday, revealing the details of a pact aimed at freeing up commerce in 40% of the world's economy. According to the text, US technology companies, banks and farmers are among the biggest beneficiaries of falling tariffs that are part of the trade deal designed to liberate commerce among 12 Pacific Rim nations.

Source: DBS

ParkwayLife Reit (C2PU)Riverstone (AP4)

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