| CIMB | PHILLIP SECURITIES |
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CDL Hospitality Trust A well-engineered move ■ Despite the dilution to DPU, we are, on balance, positive on the entire transaction as it demonstrates the manager’s acquisition nous and good capital management. ■ We decrease our FY17F-19F DPU by 7.4-8.9% to factor in i) the Pullman acquisition, ii) the 1-for-5 rights issue and iii) paring down of gearing to 33.4%. ■ Nonetheless, the manager highlighted that the net effect of the acquisition would be accretive if CDREIT’s gearing is maintained at 36.8% (as at end-1Q17). ■ Upside risk would be further debt-funded, accretive acquisitions and better-thanexpected interest savings from the paring down of debt. ■ At 1.09x FY17 P/BV and 6.1% FY18 dividend yield (0.5 s.d. above 5-year mean), we believe that Singapore recovery and acquisitions are priced in. Hold maintained.
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Croesus Retail Trust Blackstone Privatisation Offer SINGAPORE | REAL ESTATE (REIT) | UPDATE Offer from Blackstone Group to acquire all the units in CRT for S$1.17. Offer price represents a 38% premium to one-year VWAP and 23% premium to Net Asset Value (NAV) as at 31 March 2017. Unitholders will still be entitled to another up to SG4.06 cents dividend assuming effective date falls on or before 31 Oct 2017.
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| OCBC | |
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Frasers Logistics & Industrial Trust: Private placement to fund inorganic growth Frasers Logistics & Industrial Trust (FLT) announced yesterday that it has closed its private placement exercise whereby it will issue 78m new units at an issue price of S$1.01 per new unit. This translates into gross proceeds of S$78.8m and net proceeds of S$77.2m. Besides being 4.6 times subscribed, the final issue price also comes in at the top end of the indicative range of S$0.985 – S$1.01, which we believe reflects the strong sentiment in the market and confidence in FLT’s prospects. The net proceeds would be used to partially finance FLT’s proposed acquisition of a portfolio of seven industrial properties in Australia from its sponsor for an estimated total cost of ~A$179.6m. Given a clearer capital structure for the funding of FLT’s proposed acquisitions, we now incorporate these developments in our model. Our FY17/FY18 NPI and DPU forecasts are raised by 1.2%/7.7% and 0.0%/1.2%, respectively. Maintain BUY on FLT, with a revised fair value estimate of S$1.14 (previously S$1.12).
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| UOB KAYHIAN | |
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Plantation – Regional Soybean Demand Hinges On China’s Consumption Soybean planting is expected to continue increasing to meet growing demand from China as meat consumption soars. The ample soybean supply is negative to palm oil companies as it puts a lid on soybean and soybean oil prices, in turn capping palm oil prices. But this could be positive for Wilmar, one of the top soybean crushers in China in terms of supplying soymeal to the feed industry and expanding capacities following the lifting of control on foreign entities. Maintain MARKET WEIGHT
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