FRP Holdings
Ongoing Monetization Of Crown Jewel
26 March 2015
UNITED STATES | REAL ESTATE | INITIATION





BUY (INITIATION)
Initiate Coverage. “Buy” Rating. 26.3% Upside.
Billionaire family (Baker) owns ~33% of the company.
Real Estate carried entirely at historical cost. Worth a lot more.
3.47m sqft GFA properties average $39 psf book value, 18% gross yield.
Crown Jewel: 1.12m sqft GFA waterfront land parcel in Washington D.C.
Closing Price (US$, 25 Mar 15)
34.50
Div Yield, Consensus
n.a.
Target Price (US$)
43.56
Total Return
26.3%
Share Data
Millions
FRPH's Recomputed Book Value
$600
$114
$500
($12 )
($74 )
9.7
Market cap (US$)
335
52 week range (US$)
22.69
Volume (3m avg, '000 shares)
$470
$205
Outstanding Shares (mn)
$400
$335
$300
$237
$200
35.73
7.96
Top Three Shareholders (%)
Baker Ii John D
15.9
Royce And Associates
12.5
Sbp Trust
9.4
$100
Price Performance (%)
$0
Depreciated
Historical Cost
Land Bank
Developed
Properties
Mining
Royalties
Net Debt
Recomputed
Book Value
Market Cap
Frp Holdings Inc
Straits Times Index
Company Background
FRP Holdings (“FRPH”) owns vast land and properties carried at historical cost dating back
to 1980s, with gross yields as high as 356%, and trades at 29% discount to our book value.
FRPH was first formed in 1986 when Florida Rock Industries (later acquired by Vulcan
Materials for $4.6b in 2007) spun off certain businesses, including a trucking subsidiary, into
its predecessor Patriot Transportation Holding (“Patriot”). On 30 Jan 2015, the trucking
subsidiary completed its separation from Patriot, and the remaining segments (mining
royalties, development properties, land bank) were reorganised into Nasdaq-listed FRPH.
Its crown jewel is a 5.8 acre land parcel fronting Anacostia River, Washington D.C. Previously
leased to Vulcan Materials for mining, it is currently zoned for construction of 1.12m sqft of
commercial, residential and retail space over four phases. Phase 1 has lined up financing and
begun construction on 300,000 sqft GFA residential apartments and 18,000 sqft GFA retail
space. We estimate this development to be worth nearly $200m, 9x its net book value.
Meanwhile, we revalued its 3.47m sqft GFA development properties by applying 10% cap
rate on gross rental revenue (individual property basis). Even then, 95.0% of its portfolio was
assigned capital values under $100 psf GFA, which we consider to be replacement cost since
most of its business parks are fairly new (< 20 years old). Indeed, the average capital value
jumped 86% after our revaluation exercise, to a reasonable but still low $72 psf GFA.
Lastly, we capitalised its mining royalties at 6%, resulting in a writedown of $12m. However,
4,771 acres (208m sqft) currently not mined continued to earn minimum royalty payouts,
possibly prompting early lease terminations and ushering in valuable redevelopment plans.
USD is the sole currency denomination in this report. 1 acre = 43,560 sqft
Investment Actions
We initiate coverage on FRPH with "Buy" rating and SOTP-derived TP of $43.56.
Page | 1 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
MCI (P) 020/11/2014
Ref. No.: US2015_0012
1 mo
3 mo
1 yr
14.6
15.7
29.4
0.2
2.4
9.3
Price Performance (US$)
40.00
30.00
20.00
FRPH US Equity
"SPX(rebased)"
10.00
Mar 2014
Jun 2014
Sep 2014
Dec 2014
Source: Bloomberg, PSR
Key Financials (US$ mn)
FYE Sep
FY11
FY12
FY13
Revenue
120
128
140
FY14
160
EBITDA
26.6
27.1
34.5
33.9
NPAT (adj.)
7.0
8.8
10.9
9.7
EPS (US$)
0.74
0.93
1.13
1.00
PER (x)
26.6
37.7
29.7
28.0
P/BV (x)
1.1
1.5
1.7
1.6
DPS (US$ cts)
-
-
-
-
Div yield (%)
-
-
-
-
ROE (%)
7.7
4.6
8.4
5.0
Source: Bloomberg
Wong Yong Kai (+65 6531 1685)
[email protected]
FRP HOLDINGS INITIATION
LAND BANK
Business Park
1 Patriot Business Park Building "A"
2 Windlass Run Business Park
3 Hollander Business Park
4 Patriot Business Park
5 Lakeside Business Park
Residential/Others
6 RiverFront on the Anacostia, DC
- Phase 1: Residential
- Phase 1: Retail Space
- Hotel/ Office/ Retail
7 Brooksville Quarry JV, FL
8 Hampstead Trade Center, MD
9 Bird River Phase 2, MD
10 Gulf Hammock, FL
*11 Ft. Myers, FL
Acres
Sale Price (acre) Area (sqft) Cap Value (psf) Construction Cost (psf) Net Book Value PSR Valuation
--------37
23
-----
--------$380,000
$356,579
-----
129,850
386,626
--------266,530
$93.36
$198.92
--------$85.23
----$162.43
--------$99.74
------------4,280
117
74
1,600
105
------------$10,000
----$113,370
$2,691
$435,600
300,000
18,000
797,400
---------------------
$568.54
$852.82
$550.22
---------------------
$290.63
$290.63
$290.63
---------------------
$10,486,690
$7,058,029
$6,187,237
$4,259,436
$1,600,608
$29,592,000
$21,748,330
Total
DEVELOPED PROPERTIES
Properties To Be Revalued
1 Lakeside Business Park, MD
2 Hillside Business Park, MD
3 Interchange Business Park, DE
4 Patriot Business Center, VA
5 Transit Business Park, MD
6 Oregon Business Center, MD
7 Rossville Business Centre, MD
8 Norfolk Industrial Park, VA
9 Arundel Business Center, MD
10 Windsor Corporate Park, MD
11 Dorsey Run Business Park, MD
12 Hollander 95 Business Park, MD
13 Windlass Run Business Park, MD
14 115 E. 21st St Building, FL
15 Loveton Business Center, MD
Newly Acquired In 2014
16 Kelso Business Park, MD
Total
Area (sqft) Constructed
Revenue
Gross Yield Cap Rate Cap Value (psf)
$70,916,103
$276,089,223
Net Book Value
PSR Valuation
1998-2009
2003-2008
2004
2012
N/A
1989
1994
2004
1996
2000
2000
2010
2012
N/A
1990
$6,519,000
$5,206,000
$736,000
$2,270,000
$1,096,000
$1,117,000
$1,302,000
$826,000
$1,248,000
$538,000
$582,000
$600,000
$1,382,000
$730,000
$460,000
26.8%
13.1%
7.0%
11.7%
13.9%
24.5%
33.5%
15.6%
34.4%
25.4%
27.4%
13.4%
74.0%
356.1%
18.8%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
$72.94
$91.74
$24.29
$93.36
$47.18
$57.10
$68.34
$43.91
$76.66
$62.49
$68.39
$72.46
$198.92
$106.17
$136.47
$72.33
$24,344,392
$39,708,000
$10,440,000
$19,395,874
$7,880,000
$4,561,000
$3,885,000
$5,288,000
$3,627,000
$2,115,000
$2,127,000
$4,493,763
$1,866,971
$205,000
$2,451,000
$132,388,000
$65,190,000
$52,060,000
$7,360,000
$22,700,000
$10,960,000
$11,170,000
$13,020,000
$8,260,000
$12,480,000
$5,380,000
$5,820,000
$6,000,000
$13,820,000
$7,300,000
$4,600,000
$246,120,000
69,680
69,680
N/A
$212,000
$24,824,000
4.7%
----
$64.42
$64.42
$4,489,000
$4,489,000
$4,489,000
$4,489,000
$72.17
$136,877,000
$250,609,000
* 95.0%
of total areaAcres
(3.30m sqft)
valued
below $100Renewal
psf.
MINING
ROYALTIES
Lease
Termination
Option 2014 Tons Sold
Likely Renewed At Least Once
1 Keuka, FL
1,155
2016
1 x 10-year
269,268
2 Tyrone, GA
98
2016
3 x 10-year
419,558
3 Macon, GA
459
2016
3 x 10-year
1,223,910
4 Columbus,GA
143
2028
1 x 20-year
1,035,526
1,855
2,948,262
Total
$7,506,000
$7,034,894
$4,473,416
$561,463
$0
$41,324,103
$38,474,497
$7,782,857
$144,901,626
$12,840,000
$7,034,894
$8,389,366
$2,583,273
$10,316,765
$232,323,278
893,722
567,473
303,006
243,150
232,318
195,615
190,517
188,093
162,796
86,100
85,100
82,800
69,474
68,757
33,708
3,402,629
3,472,309
Low To No Likelihood of Renewal
5 Manassas, VA
51
6 Airgrove, FL
578
*7 Ft. Myers, FL
1,993
8 Brooksville, FL
160
9 Grandin, FL
6,828
10 Marion Sand, FL
562
11 Astatula, FL
326
12 Lake Louisa, FL
1,196
13 Forest Park, GA
116
14 Newberry, FL
1,107
12,917
$12,122,538
$14,107,948
$10,910,895
$6,624,564
----$43,765,944
2020
2020
2021
2022
2026
2031
2031
2033
2037
2098
--------1 x 15-year
----2 x 10-year
------------2 x 25-year
-----
14,772
312,046
21
0
371,275
671,919
0
0
0
0
642,588
1,997,849
4,946,111
Min Annual Royalty
2014 Royalty Paid PSR Valuation
$171,720
$128,808
$148,704
$136,404
$512,982
$273,552
$558,973
$216,919
$1,562,426
$1,618,330
$862,988
$1,763,420
$1,234,723
$5,479,461
$4,800
$68,700
$343,464
$250,000
$1,000,000
$132,351
$132,351
$621,252
$92,328
$85,860
$318,250
$68,700
$343,464
$217,280
$1,000,000
$132,351
$132,351
$621,252
$92,328
$496,338
$3,422,314
$536,234
$115,756
$675,570
$485,176
$3,154,750
$535,010
$535,010
$2,690,668
$444,710
$3,282,660
$12,455,543
$4,984,740
$17,935,004
*105 x 1-acre waterfront residential lots, following completion of mining in 2022-23, will be marketed to the major homebuilders.
Source: Company, PSR
Page | 2 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
LAND BANK
FRPH has two types of land banks that are of investors’ interest:
i) 6,182 acres formerly leased to Vulcan Materials for mining activities, but mining has
since ceased. Most of the land has already been rezoned for residential or other uses.
ii) 117 acres in existing business parks that are ready for immediate construction
totalling 1.28m sqft GFA, and can be either resold, or developed then held for leasing.
Residential/Others
Source: Company
FRPH owns a 5.8 acre land parcel located in the neighbourhood Capital Riverfront,
Washington D.C. and fronting Anacostia River. It is currently zoned for the construction
of 1.12m sqft GFA commercial, residential and retail space over four phases. Previously
leased to Vulcan Materials from 1986 to 2011, FRPH has regained control of this land.
Capital Riverfront is undergoing rejuvenation, with the US Department of Transportation
occupying its new 1.35m sqft GFA office in 2007, and opening of the $611m Nationals
Park in 2008. When fully completed, Capital Riverfront is expected to house a total of
15.6m sqft GFA of office & retail space, 11,978 residential units, and 1,455 hotel rooms.
Page | 3 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
In Mar 2012, FRPH entered into a joint venture with MRP SE Waterfront Residential, LLC
(“MRP”) to develop Phase 1. It contributed land and cash in exchange for 76.91% stake,
with the remainder stake held by MRP. Phase 1 has since lined up $82m non-recourse
financing, and in Oct 2014 begun construction on 300,000 sqft GFA residential
apartments and 18,000 sqft GFA retail space, targeting for completion in 2016.
From property searches, we know that condominiums within 1km radius are selling for
average $526 psf. Assuming 10% premium each for newbuild and prime waterfront
location, then factoring in 90% efficiency ratio, the residential component could be sold
for $569 psf GFA. Meanwhile, construction cost is calculated by dividing the JV’s total
capital ($10.4m cash + $82m financing) by 318,000 sqft GFA, to obtain $291 psf GFA.
Capital Riverfront has not logged any transactions for retail space given developers’
inclination of build-to-hold to capitalize on the neighbourhood’s rapid growth. Hence we
have arbitrarily assigned capital value of $853 psf GFA to retail component, ie. 50% more
than residential, which we deem appropriate for ground floor waterfront retail area.
In all, Phase 1 should generate gross proceeds of $170.6m from selling the 300,000 sqft
GFA residential component. After deducting construction costs and applying effective
tax rate of 40%, net after-tax proceeds is $50.0m. As for retail space, and for Phase 2-4
commercial development, we chose to value them on the basis of build-to-hold, thus no
income tax would be incurred. In that scenario, 18,000 sqft GFA retail space in Phase 1 is
valued at $10.1m. Accordingly, FRPH’s 76.91% stake in Phase 1 would be worth $46.3m.
As for Phase 2-4, we referenced the $324 psf GFA transacted price for office building at
100 M St, and the above retail space valuation, to derive a blended $550 psf GFA capital
value for the remaining 797,400 sqft GFA. As the timeline to develop Phase 2-4 is
uncertain, we took the liberty of discounting its valuation by 30% to arrive at $144.9m.
Altogether, we valued Phase 1-4 at $191.2m, 9x more than its $21.7m net book value.
Yet, this isn’t the only land bank. FRPH has separately closed a deal to sell Bird River
Phase 2 for $11m before taxes, more than double its net book value. It has also secured
approval and zoning for the master development of 4,280 acres at Brooksville Quarry, FL,
which we valued at $10,000 per acre ($0.23 psf), but possibly worth much more.
Source: Google Maps
Lastly, FRPH owns 1,993 acres in Ft. Myers, FL that are leased to Vulcan Materials, but
the lease was amended in Dec 2011 to accommodate 105 1-acre waterfront residential
lots in the above location, and to be made available following completion of mining by
2022-23. We note that townhouses surrounding the lake are priced at an average of
$1.87m, and in fact observed a few houses asking for the equivalent of $6m per acre. If
we apply $435,600 per acre ($10 psf) valuation to the 105 1-acre waterfront residential
lots, and discount that by 15% p.a., it would be worth $10.3m today with zero cost basis.
Page | 4 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Business Park
Source: Company
Hollander Business Park is a mere 15-min drive to Baltimore City. As seen above, most of
the land is currently undeveloped. FRPH had previously sold 4 acres in Aug 2013 to H&S
Bakery for $1.52m gross proceeds, and we estimate it can fetch similar prices on the
remaining acres if it chooses to divest them. It is a similar story for rest of the 117 acres,
whereby FRPH can choose to monetize the land for a quick gain, or build-and-hold.
In particular, Patriot Business Park Building “A”, with 129,850 sqft GFA, is a build-to-suit
project that is newly completed 4 months ahead of schedule. Tenant occupancy begun
in Nov 2014. We revalued upwards most of the land bank reserved for business parks on
the basis of either [capital value less construction cost] or [transacted price per acre],
except for Lakeside Business Park which is carried for $1.6m net book value but marked
down to zero as the construction cost appears to be more than its implied valuation.
In total, this land bank can accommodate additional 1.28m sqft of business park space,
and collectively worth $43.8m by our calculations, 48% more than its net book value.
Page | 5 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
DEVELOPED PROPERTIES
Source: Company
Apart from its valuable land bank, FRPH also wholly owns 3.47m sqft GFA of developed
business parks. Above is Lakeside Business Park, MD, consisting of 893,722 sqft GFA and
takes up 26% portfolio. Overall, historical growth is driven by higher occupancies (72% in
2010 => 90% in 2014) and overall increase in GFA (2.84m sqft in 2010 => 3.47m sqft in
2014). FRPH continues to develop its vast land bank that it subsequently leases out.
Most of its business parks are located in Baltimore (Maryland), one of the top ranked
markets for industrial/warehouse performance and has seen strong rent growth y-o-y.
Constructed in 1989-2012, the properties are held at historical cost less accumulated
depreciation, therefore severely understating their worth. In one extreme case, 115 E.
21st St Building, FL earned $730,000 annual revenue while having a net book value of
$205,000, ie. 356% gross yield. Indeed, 14 of its 16 properties have gross yields > 10%.
Assuming 10% gross yield is the appropriate cap rate, we revalued upwards 15 of its 16
properties to a combined $246.1m, 86% more than their net book value. As for the final
property, Kelso Business Park, MD, it was newly acquired in June 2014 and appears to
earn a low 4.7% gross yield. We are of the opinion that it should be allowed 1 full year
for the revenue to stabilize first, hence holding it at its net book value of $4.5m. In all, its
portfolio of developed properties would have been collectively worth $250.6m.
Even then, our new valuation still appears to be depressed. For instance, 3.30m sqft GFA
(95.0% of its portfolio) is valued under $100 psf GFA, a number we consider to
approximate the replacement cost (construction). At capital values now averaging $72
psf GFA, we might have inadvertently lowballed the segment valuation by ignoring rental
reversions and occupancy improvements, which are difficult to estimate on individual
property basis. If the portfolio is instead valued at a minimum of $100 psf GFA, they
would be worth $355.8m, $105.2m more and 42% higher than our revalued figure.
Although we chose to use the lower $250.6m in our SOTP, this does imply our 10%
gross yield methodology is conservative, and there remains room for upwards valuation.
Page | 6 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
MINING ROYALTIES
FRPH owns 14,772 acres of land that is primarily leased to Vulcan Materials for mining
aggregates. Leases begin to expire from 2016 onwards, although some have renewal
options between 10 to 25 years. In our valuation model, we used the following inputs:
i) 68% operating margin and 40% net after-tax margin, based on latest quarter results;
ii) Net royalties are valued using DCF model and 6% interest rate till year of lease expiry;
iii) Certain mines would have their leases renewed once, as earned royalties > minimum;
iv) Apart from Ft. Myers, FL location (105 acres waterfront residential) mentioned above
in Land Bank, rest of the mines are conservatively valued at zero after their lease expiry.
Therefore, the present value of the mining royalties would be $17.9m, $11.5m lower
than its net book value of $29.5m. We recognize the limitations of this valuation
methodology, as the amount of earned royalties would inevitably fluctuate depending
on the volume of mine output and the average sales price. Nonetheless, we effectively
valued this high quality annuity at a reasonable 3.6x FY14 royalty revenue. Had we used
the draconian approach of capitalising only the minimum royalty payable, we would still
arrive at $11.5m, a mere $6.4m lower and barely changes 1% of our final SOTP.
VALUATION
Millions
FRPH's Recomputed Book Value
$600
$114
$500
($12 )
($74 )
$470
$205
$400
$335
$300
$237
$200
$100
$0
Depreciated
Historical Cost
Land Bank
Developed
Properties
Mining
Royalties
Net Debt
Recomputed
Book Value
Market Cap
Source: Company, PSR
Baker family, who sold Florida Rock for $4.7b to Vulcan Materials in 2007, now appears
to refocus efforts on 33%-owned FRPH. By separating the trucking subsidiary to establish
FRPH in its present form two months ago, the Bakers have created a real estate pureplay in the midst of monetizing its crown jewel, Riverfront on the Anacostia (1.12m sqft
GFA prime waterfront commercial, residential and retail space in Washington D.C.).
We believe its depressed GAAP book value cannot go unnoticed for long, because Phase
1 is targeted for completion in 2016. If we are correct about the selling price, FRPH
should book net profits of $40m solely from selling the residential inventory next year. In
the meantime, recurring annual income from developed properties and mining royalties
would average $13m pre-tax, more than sufficient to service its $2m interest expense.
At 10% holdco discount, FRPH would be worth $423m, ie. $43.56 Target Price and 26.3%
above its current share price of $34.50. We believe this is a conservative estimate that
has room for further upside. Just to recap, we used the lower of two valuations of its
developed properties in our calculations; the more bullish figure would have added
additional $105.2m to its recomputed book value, boosting our TP to $53.30 instead.
Page | 7 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Income Statement
FYE Sep, (US$ mn)
Annual
FY10
FY11
FY12
FY13
FY14
Revenues
111.3
120.1
127.5
139.8
160.1
COGS
(96.8)
(105.7)
(113.4)
(119.3)
(142.4)
Gross profits
14.5
14.4
14.1
20.4
17.8
Other oper income
0.0
0.0
0.0
0.0
0.0
Operating expense
0.0
0.0
0.0
0.0
0.0
Other operating exp
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.5
14.4
14.1
20.4
17.8
Financial expense
(3.9)
(3.3)
(2.6)
(2.5)
(1.5)
Associates
(0.0)
(0.0)
(0.0)
(0.1)
(0.1)
0.4
0.3
1.1
7.4
0.5
11.0
11.3
12.5
25.2
16.7
Total operating expenses
Operating profits
Other non-oper
PBT
Tax
(4.0)
(4.3)
(4.8)
(9.8)
(6.7)
Minority interest
0.0
0.0
0.0
0.0
0.0
Exc items, net
0.3
5.2
0.1
(0.0)
0.0
Net profit (GAAP)
7.4
12.2
7.8
15.4
10.0
(0.3)
(5.2)
1.0
(4.5)
(0.3)
7.1
7.0
8.8
10.9
9.7
Gross margin
13.0
12.0
11.1
14.6
11.1
EBITDA margin
23.4
22.1
21.2
24.7
21.2
Operating margin
13.0
12.0
11.1
14.6
11.1
Non-recurring items
Adjusted net profit
Margin analysis (%)
Pre-tax margin
9.9
9.4
9.8
18.0
10.4
Net margins
6.6
10.2
6.1
11.0
6.3
Adjusted net margin
6.3
5.8
6.9
7.8
6.1
36.0
38.1
38.4
39.0
39.9
7.9
6.2
9.6
14.6
Effective tax rate
YoY growth (%)
Revenues
Gross profits
PBT
Net profit (GAAP)
(0.9)
(1.9)
44.9
(13.0)
2.4
10.9
101.5
(33.9)
65.7
(36.1)
97.0
(34.9)
Source: Bloomberg
Page | 8 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Balance Sheet
Annual
FY10
FY11
FY12
FY13
FY14
17.2
21.0
6.7
0.5
1.0
Short-term investments
0.0
0.0
0.0
0.0
0.0
Trade receivables
7.2
6.7
7.0
7.7
8.2
Inventories
0.7
1.1
0.8
0.9
0.9
FYE Sep, (US$ mn)
Cash & equivalents
Other current assets
6.8
5.8
12.3
7.9
9.9
31.8
34.7
26.9
17.0
20.0
Net fixed assets
198.1
209.0
228.0
241.4
249.6
LT Investments
4.4
0.0
0.0
0.0
0.0
Current assets
JVs & Associates
Other long-term assets
-
-
-
-
-
23.4
22.7
20.8
28.7
43.4
LT assets
225.9
231.7
248.8
270.1
293.0
Total assets
257.7
266.4
275.7
287.1
313.1
3.4
3.9
5.3
7.3
7.3
Short-term debt & leases
4.6
4.9
5.2
4.3
4.5
Others current liabilities
10.1
9.4
9.7
9.4
10.1
18.1
18.2
20.2
21.0
21.9
LT debt & leases
67.3
62.4
57.1
45.6
58.7
Other non-current liab
Trade creditors
Current liabilities
20.3
21.3
23.7
27.9
26.1
Non-current liabilities
87.6
83.7
80.8
73.5
84.8
Minority interest
0.0
0.0
0.0
0.0
0.0
Preferred Equity
0.0
0.0
0.0
0.0
0.0
Common Equity
152.1
164.4
174.7
192.6
206.3
Equity & liabilities
257.7
266.4
275.7
287.1
313.1
Inventory days
2.4
3.1
3.2
2.6
2.3
Receivable days
22.3
21.1
19.7
19.2
18.2
Payable days
11.7
12.6
14.9
19.2
18.7
Current ratio (x)
1.8
1.9
1.3
0.8
0.9
Cash ratio (x)
0.9
1.2
0.3
0.0
0.0
Gross debt/equity (%)
47.3
40.9
35.7
25.9
30.7
Net debt/equity (%)
36.0
28.1
31.9
25.6
30.2
ROA (%)
2.9
4.7
2.9
5.5
3.3
ROE (%)
5.0
7.7
4.6
8.4
5.0
Balance sheet ratios
Source: Bloomberg
Page | 9 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Ratings History
50
Market Price
Target Price
45
40
35
30
25
Source: Bloomberg, PSR
20
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
Apr-14
1
2
3
4
5
PSR Rating System
Total Returns
Recommendation
Rating
> +20%
Buy
1
+5% to +20%
Accumulate
2
-5% to +5%
Neutral
3
-5% to -20%
Reduce
4
<-20%
Sell
5
Remarks
We do not base our recommendations entirely on the above quantitative return bands. We
consider qualitative factors like (but not limited to) a stock's risk reward profile, market
sentiment, recent rate of share price appreciation, presence or absence of stock price
catalysts, and speculative undertones surrounding the stock, before making our final
recommendation
Page | 10 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Contact Information (Singapore Research Team)
Management
Chan Wai Chee
(CEO, Research - Special Opportunities)
[email protected]
Research Operations Officer
Jaelyn Chin
[email protected]
Macro | Equities
Soh Lin Sin
[email protected]
Bakhteyar
[email protected]
Osama
Market Analyst | Equities
Kenneth Koh
[email protected]
US Equities
Wong Yong Kai
Finance | Offshore Marine
Benjamin
Ong
[email protected]
Real Estate
REITs
Telecoms | Technology
Transport & Logistics
Richard Leow,
[email protected]
CFTe
Contact Information (Regional Member Companies)
MALAYSIA
Phillip Capital Management Sdn Bhd
B-3-6 Block B Level 3 Megan Avenue II,
No. 12, Jalan Yap Kwan Seng, 50450
Kuala Lumpur
Tel +603 2162 8841
Fax +603 2166 5099
Website: www.poems.com.my
Colin Tan
[email protected]
SINGAPORE
Phillip Securities Pte Ltd
Raffles City Tower
250, North Bridge Road #06-00
Singapore 179101
Tel +65 6533 6001
Fax +65 6535 6631
Website: www.poems.com.sg
Caroline Tay
[email protected]
Dehong Tan
[email protected]
[email protected]
Consumer
Shane Goh
[email protected]
HONG KONG
Phillip Securities (HK) Ltd
11/F United Centre 95 Queensway
Hong Kong
Tel +852 2277 6600
Fax +852 2868 5307
Websites: www.phillip.com.hk
JAPAN
Phillip Securities Japan, Ltd.
4-2 Nihonbashi Kabuto-cho Chuo-ku,
Tokyo 103-0026
Tel +81-3 3666 2101
Fax +81-3 3666 6090
Website: www.phillip.co.jp
INDONESIA
PT Phillip Securities Indonesia
ANZ Tower Level 23B,
Jl Jend Sudirman Kav 33A
Jakarta 10220 – Indonesia
Tel +62-21 5790 0800
Fax +62-21 5790 0809
Website: www.phillip.co.id
CHINA
Phillip Financial Advisory (Shanghai) Co Ltd
No 550 Yan An East Road,
Ocean Tower Unit 2318,
Postal code 200001
Tel +86-21 5169 9200
Fax +86-21 6351 2940
Website: www.phillip.com.cn
THAILAND
Phillip Securities (Thailand) Public Co. Ltd
15th Floor, Vorawat Building,
849 Silom Road, Silom, Bangrak,
Bangkok 10500 Thailand
Tel +66-2 6351700 / 22680999
Fax +66-2 22680921
Website www.phillip.co.th
FRANCE
King & Shaxson Capital Limited
3rd Floor, 35 Rue de la Bienfaisance 75008
Paris France
Tel +33-1 45633100
Fax +33-1 45636017
Website: www.kingandshaxson.com
UNITED KINGDOM
King & Shaxson Capital Limited
6th Floor, Candlewick House,
120 Cannon Street,
London, EC4N 6AS
Tel +44-20 7426 5950
Fax +44-20 7626 1757
Website: www.kingandshaxson.com
UNITED STATES
Phillip Futures Inc
141 W Jackson Blvd Ste 3050
The Chicago Board of Trade Building
Chicago, IL 60604 USA
Tel +1-312 356 9000
Fax +1-312 356 9005
Website: www.phillipusa.com
AUSTRALIA
Phillip Capital Limited
Level 12, 15 William Street,
Melbourne, Victoria 3000, Australia
Tel +61-03 9629 8288
Fax +61-03 9629 8882
Website: www.phillipcapital.com.au
SRI LANKA
Asha Phillip Securities Limited
No-10 Prince Alfred Tower,
Alfred House Gardens,
Colombo 03, Sri Lanka
Tel: (94) 11 2429 100
Fax: (94) 11 2429 199
Website: www.ashaphillip.net
TURKEY
PhillipCapital Menkul Degerler
Dr. Cemil Bengü Cad. Hak Is Merkezi
No. 2 Kat. 6A Caglayan
34403 Istanbul, Turkey
Tel: 0212 296 84 84
Fax: 0212 233 69 29
Website: www.phillipcapital.com.tr
DUBAI
Phillip Futures DMCC
Member of the Dubai Gold and
Commodities Exchange (DGCX)
Unit No 601, Plot No 58, White Crown Bldg,
Sheikh Zayed Road, P.O.Box 212291
Dubai-UAE
Tel: +971-4-3325052 / Fax: + 971-4-3328895
Website: www.phillipcapital.in
INDIA
PhillipCapital (India) Private Limited
No.1, 18th Floor
Urmi Estate
95, Ganpatrao Kadam Marg
Lower Parel West, Mumbai 400-013
Maharashtra, India
Tel: +91-22-2300 2999 / Fax: +91-22-2300 2969
Website: www.phillipcapital.in
Page | 11 | PHILLIP SECURITIES RESEARCH (SINGAPORE)
FRP HOLDINGS INITIATION
Important Information
This report is prepared and/or distributed by Phillip Securities Research Pte Ltd ("Phillip Securities Research"), which is a holder of a financial adviser’s
licence under the Financial Advisers Act, Chapter 110 in Singapore.
By receiving or reading this report, you agree to be bound by the terms and limitations set out below. Any failure to comply with these terms and limitations
may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in
whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately.
The information and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this report has been obtained
from public sources which Phillip Securities Research believes to be reliable. However, Phillip Securities Research does not make any representation or
warranty, express or implied that such information or Research is accurate, complete or appropriate or should be relied upon as such. Any such information
or Research contained in this report is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the
information or Research made available or to supply any corrections, updates or releases in connection therewith.
Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this report are as of the date indicated and are subject to change at any
time without prior notice.
Past performance of any product referred to in this report is not indicative of future results.
This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This report should not be relied upon exclusively or
as authoritative, without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this report has been
made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this report is
suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this report involve significant risks
and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks
are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein
with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.
Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned
in this report should take into account existing public information, including any registered prospectus in respect of such product.
Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors,
employees or persons involved in the issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and
worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities),
brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not
limited to its officers, directors, employees or persons involved in the issuance of this report, may have participated in or invested in transactions with the
issuer(s) of the securities mentioned in this report, and may have performed services for or solicited business from such issuers. Additionally, Phillip
Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or
persons involved in the issuance of this report, may have provided advice or investment services to such companies and investments or related investments,
as may be mentioned in this report.
Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors,
employees or persons involved in the issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in
related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other
compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any
fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an
adverse effect on the value, price or income return of the investment.
To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to
its officers, directors, employees or persons involved in the issuance of this report, may at any time engage in any of the above activities as set out above or
otherwise hold an interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this report.
Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but
not limited to its officers, directors, employees or persons involved in the issuance of this report, which is not reflected in this report, and Phillip Securities
Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons
involved in the issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its
publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors,
employees or persons involved in the issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the
contents of this report.
The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country
where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research
to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction.
This report is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of
any particular person. The products mentioned in this report may not be suitable for all investors and a person receiving or reading this report should seek
advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking
into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such
products.
This report is not intended for distribution, publication to or use by any person in any jurisdiction outside of Singapore or any other jurisdiction as Phillip
Securities Research may determine in its absolute discretion.
IMPORTANT DISCLOSURES FOR INCLUDED RESEARCH ANALYSES OR REPORTS OF FOREIGN RESEARCH HOUSES
Where the report contains research analyses or reports from a foreign research house, please note:
(i)
recipients of the analyses or reports are to contact Phillip Securities Research (and not the relevant foreign research house) in Singapore at 250
North Bridge Road, #06-00 Raffles City Tower, Singapore 179101, telephone number +65 6533 6001, in respect of any matters arising from, or in
connection with, the analyses or reports; and
(ii)
to the extent that the analyses or reports are delivered to and intended to be received by any person in Singapore who is not an accredited
investor, expert investor or institutional investor, Phillip Securities Research accepts legal responsibility for the contents of the analyses or reports.
Page | 12 | PHILLIP SECURITIES RESEARCH (SINGAPORE)