| UOB KAYHIAN |
CGS CIMB |
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CapitaLand (CAPL SP) Acquisition Of US Multi-family Portfolio
CapitaLand makes its first foray into US multi-family properties via the acquisition of 16 freehold properties for US$835m (S$1.14b). The defensive suites of class B properties are highly resilient, seeing only 4-5% rent arrears during recessions. The acquisition is likely to see earnings accretion of 1.4%, based on 2017 pro-forma EPS. Management would like to spin off these assets into investment vehicles/ partnerships in the longer term, and build similar businesses in other markets, like China. Maintain BUY and target price of S$3.78.
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Sembcorp Industries Spot power prices at 3-year high in India
■ Average Sep electricity spot prices in India are at Rs4.13/kwh with a high of Rs6.50/kwh in the past two days; on higher demand and lower renewables. ■ If this continues for the rest of Sep, average spot prices could reach Rs4/khw for 3Q18, similar to the levels in 2Q18, in our view. ■ Due to maintenance, TPCIL/SGPL’s utilisation was lower in July-Aug but we think SCI India’s 3Q18 profit could remain impressive due to the spot prices. ■ Consistent performance in India is the key catalyst. Maintain Add and TP of S$3.49 on SOP valuations. We leave our EPS unchanged for now.
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| PHILLIP SECURITIES | PHILLIP SECURITIES |
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Combine Will International Holdings Ltd Diversification out of China SINGAPORE | CONSUMER| SITE VISIT 18 September 2018
Cost savings from cheaper labour force in Indonesia Diversifying out of China gives Combine Will an edge over other vendors Current share price of $1.05 represents a PE of 10.2 based on 1H18 annualised earnings
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First REIT A new dawn SINGAPORE | REAL ESTATE (REIT) | UPDATE
OUE Limited and OUE Lippo Healthcare (OUELH) collectively acquiring 100% of the shares in Bowsprit Capital Corporation Limited (Bowsprit), the Manager of First REIT (FIRT), from Lippo Karawaci (LPKR). OUELH also acquiring 10.63% of FIRT units from Bridgewater International Limited (Bridgewater) (subsidiary of LPKR). OUELH and LPKR will each have 10.63% stake in FIRT upon completion of transaction. New ROFR pipeline from OUELH – which includes healthcare assets in Japan, China, Malaysia – in addition to existing ROFR pipeline from LPKR. Cash infusion from LPKR’s divestment of stake in Bowsprit and FIRT through its holding companies, will ease its cash flow status and potentially improve receivables at FIRT. Maintain Neutral with an unchanged TP of S$1.31.
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Check out our compilation of Target Prices
