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12-03-2013, 11:20 AM
Hm, not sure if I can post Analysts views, if not please delete this:
DBSVickers
SPH: BUY (Upgrade from HOLD); S$4.31; SPH SP
Pressing towards a REIT
Price Target : 12-month S$ 4.79 (Prev S$ 4.01)
by: Andy SIM CFA +65 6398 7969
• Upgrade SPH to BUY with possible asset value realisation through establishment of REIT
• Formal announcement may be taken as a signal that conditions are ripe and process is ongoing
• Paragon and Clementi Mall, fair market value at S$3bn, are most likely candidates
• TP raised to S$4.79, unlocking value for shareholders; special dividends are key catalysts
Upgrade SPH to BUY, announcement signals conditions are ripe. We raised SPH to BUY as we believe asset value realisation will be a trigger for share price outperformance with the establishment of a real estate investment trust (REIT). Through the successful listing of the proposed REIT, we estimate SPH could see a cash inflow of S$1.5bn-1.8bn assuming a retention of 40%-50% eventual interest; shareholders should stand to reap special dividends. Given the conservative stance of management, we believe this could signal that conditions are ripe (and that the process is ongoing), compared to before. This is the first time the group has formally announced its intention.
Paragon and Clementi Mall are most likely assets. Details are not available pertaining to the intended REIT, but we believe Paragon and Clementi Mall could be the assets in the initial portfolio. Based on latest independent valuer’s estimate of c.S$3bn and our assumptions (see pg 3), the proposed REIT could likely have an initial distribution yield of c. 5.77%, which is likely to see some decent demand. We do not expect Seletar Mall to be part of the initial portfolio injection as it is still under development, but it could be earmarked as a pipeline for the future. One key challenge for the proposed REIT would be the pipeline of assets for growth. This could be addressed should management be able to tie up with third party asset owners or further development of new sites.
TP raised to S$4.79. We raised our SOTP TP to S$4.79, pegging our property valuation to the latest fair market estimates (S$3bn) and raised our valuation of its newspaper/ magazines ops, backed by DCF to S$4.5bn. Further catalyst could come from the eventual launch of the REIT, and if successful, potential for special dividend payout.
DBSVickers
SPH: BUY (Upgrade from HOLD); S$4.31; SPH SP
Pressing towards a REIT
Price Target : 12-month S$ 4.79 (Prev S$ 4.01)
by: Andy SIM CFA +65 6398 7969
• Upgrade SPH to BUY with possible asset value realisation through establishment of REIT
• Formal announcement may be taken as a signal that conditions are ripe and process is ongoing
• Paragon and Clementi Mall, fair market value at S$3bn, are most likely candidates
• TP raised to S$4.79, unlocking value for shareholders; special dividends are key catalysts
Upgrade SPH to BUY, announcement signals conditions are ripe. We raised SPH to BUY as we believe asset value realisation will be a trigger for share price outperformance with the establishment of a real estate investment trust (REIT). Through the successful listing of the proposed REIT, we estimate SPH could see a cash inflow of S$1.5bn-1.8bn assuming a retention of 40%-50% eventual interest; shareholders should stand to reap special dividends. Given the conservative stance of management, we believe this could signal that conditions are ripe (and that the process is ongoing), compared to before. This is the first time the group has formally announced its intention.
Paragon and Clementi Mall are most likely assets. Details are not available pertaining to the intended REIT, but we believe Paragon and Clementi Mall could be the assets in the initial portfolio. Based on latest independent valuer’s estimate of c.S$3bn and our assumptions (see pg 3), the proposed REIT could likely have an initial distribution yield of c. 5.77%, which is likely to see some decent demand. We do not expect Seletar Mall to be part of the initial portfolio injection as it is still under development, but it could be earmarked as a pipeline for the future. One key challenge for the proposed REIT would be the pipeline of assets for growth. This could be addressed should management be able to tie up with third party asset owners or further development of new sites.
TP raised to S$4.79. We raised our SOTP TP to S$4.79, pegging our property valuation to the latest fair market estimates (S$3bn) and raised our valuation of its newspaper/ magazines ops, backed by DCF to S$4.5bn. Further catalyst could come from the eventual launch of the REIT, and if successful, potential for special dividend payout.