Towards Financial Freedom
DBS Equity Research: Wired Daily 6 Apr 2016
Ascendas Hospitality Trust - Potential takeover rejected. Downgrade to HOLD; expect share price to be under pressure in the near term.
US stocks fell as the rally over the past 1-2 months looks to be tiring out on concerns that all the recent monetary policy easing moves may have little effect to lift the weakening global growth. Comments by the IMF MD Christine Lagarde downside risks to global growth have risen with little upside seen also dampened sentiment.
Meanwhile, for the Singapore market, the benchmark STI fell yesterday to test our stated first near-term support at 2785. Expect this level to hold in the current session but the trend is sideways at best in the short-term with resistance around the 2830 level.
Ascendas Hospitality Trust (ASCHT) announced that after evaluating various takeover proposals it has decided not to proceed with any of the offers and have ceased all discussions. This follows the announcement last week of an uplift in ASCHT's NAV per unit of S$0.84 from S$0.70 previously, after bringing forward its annual asset valuation process. While it is unclear why ASCHT has decided to reject the potential takeover proposals, we suspect it may have been due to the potential bidders not offering a price which is at least on par or at significant premium to its latest NAV per unit of S$0.84. We downgrade our call to HOLD. With the share price trading at our TP of S$0.77 and unwinding of positions by investors who had anticipated a successful takeover, we expect ASCHT's share price to be under pressure in the near term.
We hosted a Frasers Centrepoint Property Day in Bangkok, tailored for Frasers Centrepoint Limited(BUY, TP: S$2.05) and its REITs - Frasers Centrepoint Trust (BUY, TP: S$2.11), Frasers Commercial Trust (BUY, TP: S$1.53) and Frasers Hospitality Trust (BUY, TP: S$0.83). Key discussion points are as follows :-
- Theme 1 - Dynamic group with strong ability to weather slowing growth environment.
- Theme 2 - Asset refurbishments across its commercial portfolio to boost value in the medium term.
- Theme 3 - Asset re-cycling and acquisitions.
GLPhas signed new leases totaling 98,000 sqm (1.1 million sq ft) with four leading companies in China. The customers include Deppon Logistics, a leading third-party logistics provider and GLP's third largest customer by leased area, as well as Yonghui Superstores, a major supermarket chain in China. Three of the leases are new customer relationships for GLP.
Haiyi Holdings Pte Ltd (HHPL), the controlling shareholder of Catalist-listed property developer SingHaiyi Group, has struck a conditional agreement to subscribe for 500m new shares in mainboard-listed property developer OKH Global at S$0.10 apiece. Under a loan agreement, HHPL will also extend a loan of S$10m to OKH Global. The share subscription price represents a discount of about 21.9% to OKH's last volume weighted average price. The subscription shares will represent about 44.3% of OKH's 1.128 bn shares immediately after completion.
AVIC International Maritime has entered into a contract, as a co-seller, for four RoPax vessels with 2+2 options with Stena RoRo, a subsidiary of Swedish ship owner, Stena AB. The contract value of each of the vessels is approximately US$80m. The vessels are scheduled for deliveries from year 2019 onwards.
Swissco Holdings has entered into a memorandum of understanding (MOU) for the proposed acquisition of the VM Group.
The external auditors for EMS Energy have cast doubt on the marine and offshore service provider's ability to continue as a "going concern". The group incurred a net loss of S$10.2m in the 2015 financial year, its auditors BDO LLP noted. Its current liabilities also exceed its current assets by S$21.8m.
Source: DBS
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