1. business and industrial
2. company
3. joint venture

 Morning Buzz
Tuesday, 13 January 2015
STOCK IN FOCUS
STI INDEX (PREVIOUS DAY CLOSE)
3,344.89 (0.19%)
FIRST REAL ESTATE INVESTMENT TRUST
We initiate coverage on First Real Estate Investment Trust
(First REIT) with a BUY rating and a fair value of S$1.380
based on a dividend discount model. First REIT’s 6.4% FY15F
yield is anchored by long master leases, with ~95% of the
rental income from Indonesia’s healthcare sector backed by
Lippo Karawaci and Siloam Hospitals. First REIT stands to
benefit from its sponsor’s huge asset pipeline which may
continue to offer very attractive yield.
Vol (mil): 1,286.0 / Val (S$ mil): 910.6
MAJOR STOCK INDICES
Close
DJ Ind Avg
S & P 500
Nasdaq Comp
Hang Seng
% Chge
17,640.84
-0.54%
2,028.26
-0.81%
4,664.71
-0.84%
24,026.46
0.45%
COMMODITIES
Gold (SPOT) US$ / oz
Oil (NYMEX CWTI) US$ / bbl
Baltic Dry Index
Close
% Chge
1,230.98
-0.18%
45.85
-0.48%
723.00
1.97%
EXCHANGE RATES
Distribution underpinned by long master leases. First REIT
boasts of a long portfolio WALE of 10.7 years, with the first
renewal coming due only on 2017. As ~98% of the rents are priced
and paid in SGD with rental growth rates at twice Singapore CPI
growth, subject to a cap of 2% and a floor of 0%, the long master
leases offers a partial hedge against inflation.
A huge asset pipeline ahead. After acquiring 12 properties and
enlarging the portfolio nearly fourfold to S$1.2b since IPO in 2006,
we estimate that 28 more assets remain in the pipeline. Typically
acquired at high 9% to high 10% rental yield with at least 9%
discount to valuation, the acquisitions have been highly accretive
to DPU and NAV.
Asset sustainability with long lifespan. The Indonesia assets,
which constitute ~96% of property valuation, are on Hak Guna
Bangunan (Right to Build), which is essentially leasehold tenure.
Nevertheless, there is a possibility for renewal after the expiration
of the initial lease period of 30 years and an additional term of 20
years. Meanwhile, First REIT is poised to benefit from the
developments in the Indonesia healthcare market.
Initiate BUY with target of S$1.38 with more upside on
acquisitions. We see a 15% upside (incl dividends) with our DDM
-derived price target. The target price could prove to be
conservative, given that it is based only on the current portfolio of
assets. If we assume that First REIT acquires another 6 properties
with purchase and lease details (e.g. size of asset and NPI yield)
that is similar to the average of the most recent 6 acquisitions, our
target price rises to S$1.49 (23.0% upside).
USD : SGD 1.3348 / MYR : SGD 0.3742
INTEREST RATES
3-mth Sibor
0.641%
SGS (10yr)
2.064%
Source: Bloomberg
NEWS BUZZ
 SPH Reit: Posts 2.3% rise in DPU to 1.33 cents in Q1
 Qian Hu Corp: Q4 profit jumps on lowered expenses
AmFraser Research Team
 Hyflux: Seeks bondholders' approval to amend trust deed
www.amfraserdirect.com.sg
AmFraser Securities Pte Ltd
Page 1
Please see important disclosures at the end of this publication
AmFraser Tuesday, 13 January 2015
News Buzz
SPH Reit (S$1.040)
Posts 2.3% rise in DPU to 1.33 cents in Q1
SPH Reit posted a 2.3% increase in DPU to 1.33 Singapore cents for the 1Q
ended Nov 30, 2014 on strong rental reversions and occupancies at its malls.
Gross revenue during the quarter improved 1.8% from a year ago to S$50.6mil,
while net property income grew 4.9% to S$37.9mil.
Qian Hu Corp (S$0.077)
Q4 profit jumps on lowered expenses
Qian Hu’s profit attributable to shareholders for the three months ended December
rose to S$176,000, or 0.04 Singapore cents per share. The company is
recommending a first and final dividend of 0.1 Singapore cents per share. Gross
profit fell 20% to S$4.8mil from revenue of S$21.3mil, which was down 1.2 per cent
year-on-year.
Hyflux (S$0.920)
Seeks bondholders' approval to amend trust deed
Hyflux is seeking approval from bondholders to amend a trust deed relating to its
$800-million multi-currency debt issuance programme. Among other things, the
firm wants to broaden the programme's interest cover covenant to include its
unencumbered cash position. It also wants to change the frequency of providing to
DBS Bank, as trustee for the bondholders, certain compliance certificates to a semi
-annual basis instead of the current quarterly basis. It has issued $420mil worth of
notes so far under the debt issuance programme.
Source: The Business Times / Bloomberg / Straits Times
AmFraser Securities Pte Ltd
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AmFraser Tuesday, 13 January 2015
Corporate Action
Dividends
Company
Results
Ann Date
Period
DPS
Ex-Date
Book Close
Payable
Share Price
Yield
12-Jan-15
(%)
Fraser and Neave
13-Nov-14 FY14 SGD 0.030000
3-Feb-15
5-Feb-15
16-Feb-15
SGD
2.700
1.1
Frasers Centrepoint
12-Nov-14 FY14 SGD 0.062000
3-Feb-15
5-Feb-15
16-Feb-15
SGD
1.665
3.7
Ex-Date
Book Close
29-Dec-14
* Include Ordinary, Cash, Special, Bonus, Variable and Base
Rights & Bonus Issues
Company
Pacific Andes Resources Development
Rights Issue
4 Rights Share @ S$0.051 each Rights
Share for every 5 existing ord shares held
Right Trading Period
From
To
31-Dec-14
6-Jan-15
14-Jan-15
Swiber Holdings
1 Rts Share @ S$0.15 each Rts share for
every 2 shares held
6-Jan-15
8-Jan-15
13-Jan-15
21-Jan-15
Yoma Strategic Holdings
1 Rts Share @ S$0.38 each Rts share for
every 3 existing ord shares held
12-Jan-15
14-Jan-15
19-Jan-15
27-Jan-15
Source: SGX Annoucement
Buyout
Company
Offer
Price
CH Offshore
Remarks
Closing Date
Offeror
SGD 0.495
Cash
5.30 p.m. on 26 January 2015
Energian Pte. Ltd.
ECS Hldgs
SGD 0.68
Cash
5.30 p.m. on 12 January 2015
VST Holdings Ltd
euNetworks Group
SGD 1.16
Cash
5.30 p.m. on 30 January 2015
EUN Holdings, LLP
UE E&C
SGD 1.25
Cash
5.30 p.m. on 28 January 2015
Universal EC Investments Pte. Ltd.
Source: SGX Annoucement
AmFraser Securities Pte Ltd
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AmFraser Tuesday, 13 January 2015
Financial Calendar
Monday
Tuesday
12-Jan
Wednesday
13-Jan
Q1: SPH REIT
Thursday
14-Jan
SG: 4Q14 Advance GDP Estimates
Q1: SPH
(Not later than 14 Jan)
Friday
15-Jan
SG: Prices of Private Residential Units
Sold by Developers
16-Jan
Q4: Cambridge Industrial Trust
Q4: Qian Hu
Q1: Xpress Hldgs
*Q4: First REIT
19-Jan
Q3: Mapletree Logistics Trust
Q4: Keppel Infras Trust / Keppel
REIT / M1
20-Jan
Q3: Mapletree Industrial Trust
Q4: Keppel Telecoms & Tpt
21-Jan
Q2: Spore Exchange
22-Jan
Q1: Frasers Commercial Trust
Q3: Mapletree Commercial Trust
Q4: CapitaCommercial Trust /
Keppel Land / Sabana Shari'ah /
Soilbuild Biz Space
26-Jan
27-Jan
Q3: CitySpring Infrastructure /
Mapletree Greater China
SG (Dec 2014): CPI
SG: 4Q14 Real Estate Statistics
Q3: Ascendas REIT
Q4: Ascott Residence Trust / Keppel
Corp
Q1: Frasers Centrepoint Trust
Q4: CapitaMall Trust
*Q4: Lonza Grp
SG (Dec 2014): Index of Industrial
Production
23-Jan
28-Jan
29-Jan
30-Jan
SG (Dec 2014): Unemployment Rate
& Employment
Q4: CDL Hospitality Trusts
Q4: Cache Logistics Trust
2-Feb-15
3-Feb
4-Feb
Q4: Osim Int'l
9-Feb
5-Feb
Q3: Global Logistics Properties
10-Feb
11-Feb
Q4: OCBC (Before mkt open) / Utd
Overseas Insurance
6-Feb
Q4: Great Eastern Hldgs
12-Feb
Q4: Starburst Hldgs / Wilmar Int'l
13-Feb
Q2: Olam Int'l
Q4: Hi-P Int'l / Utd Overseas Bank
* Tentative
Source: Company; Bloomberg
AmFraser Securities Pte Ltd
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AmFraser Tuesday, 13 January 2015
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______________________________ LEE Wing How
for AmFraser Securities Pte Ltd
AmFraser Securities Pte Ltd
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