Brokers' Take
Published February 11, 2006
BT
GuocoLand
Feb 10 close: $1.94
UBS INVESTMENT RESEARCH, Feb 9
GUOCOLAND has undertaken a series of balance sheet restructurings in the past five years. It is now well capitalised with a good management team. GuocoLand is 68 per cent controlled by Malaysian tycoon Quek Leng Chan through his 70 per cent interest in Guoco Group, which is listed in Hong Kong.
Guoco Group currently has US$3.1 billion cash in its balance sheet. We believe Quek Leng Chan has ambitions for GuocoLand to be transformed into a major real estate player in Asia, focusing on China, Vietnam, India, Malaysia, Singapore and Japan. With the support of its parent, GuocoLand is set to re-leverage and redeploy capital into Asian real estate.
GuocoLand has accumulated 11 million square feet gross floor area land bank in China. It is intending to double the land bank. GuocoLand has taken advantage of China's austerity measures by boosing its land bank in Shanghai, Beijing and Nanjing.
GuocoLand is planning to divest $370 million worth of non-core investment and redeploy into land banks in China, Vietnam and India. Divestment plans over the next 12 months include divesting a 21 per cent stake in Hotel Properties and a 5 per cent stake in Brierley Investment Holdings.
Its 14.5 times price-earnings ratio reflects a trough earnings cycle. GuocoLand is inexpensive from an asset valuation perspective. Its 4.1 per cent net dividend yield provides solid share price support. We initiate coverage with a price target of $2.50 per share. The price target implies one times price-revalued net asset value.
BUY
Pacific Andes Holdings
Feb 10 close: $0.68
OCBC INVESTMENT RESEARCH, Feb 10
PACIFIC ANDES Holdings delivered a 51 per cent year-on-year rise in Q3 earnings to HK$25.9 million (S$5.4 million). Recently listed China Fishery Group performed well. Demand for frozen fish remains strong in China.
We are keeping our FY06 earnings of HK$199 million as we are expecting Q4 to once again be the peak season.
With the successful launch of China Fishery, we expect management's next initiative to involve the deployment of the proceeds from the initial public offering into China Fishery's vessels as specified in the listing prospectus and also to look into vertical integration plans for its group of listed companies.
We continue to favour Pacific Andes despite the recent gains as we see two legs of growth: from China Fishery and from the core frozen fish trading business. With more certainty to its FY07 earnings and based on the same eight times parameter, we are raising our fair value from 59 cents to 68 cents.
BUY
Genting International
Feb 10 close: $0.37
MERRILL LYNCH, Feb 9
WE initiate coverage on Genting International (GIL) with a 12-month price objective of $0.43 per share. Our price objective is the sum of our net asset value estimate of $0.24 per share and our assessed option value of $0.19 per share.
We see potential short-term catalysts to the share price as largely relating to the legalisation of casinos in Singapore. GIL will submit bids for the Marina Bay and Sentosa sites.
GIL is the international investment arm of the Genting Group. It currently holds strategic investments in the UK market. GIL is the largest shareholder in Stanley Leisure and London Clubs International, which are two of the largest casino operators in the UK.
We believe GIL will focus on both the UK and Asia for new business opportunities due to its existing portfolio, the experience of the Genting Group and opportunities that we believe exist in these regions.
The group has extensive knowledge of the Asian casino market. It is the only casino gaming company in the world to have undergone probity checking by all of the major gaming markets, including the US, Australia, the UK and Malaysia. As to investment risks, the timing and extent of casino legalisation may differ from our forecasts and GIL's growth may be restricted by competition.
BUY
The Hour Glass
Feb 10 close: $0.745
NRA Capital, Feb 9
SWISS watch export data shows strong double-digit growth rates for Singapore (+59 per cent) and Australia (+67 per cent), where Hour Glass has significant retail presence. Japan and Australia confirmed their outstanding situations during the 12 months in 2005.
Growth in Hour Glass's group revenue in 2H of FY ending March 06 is expected to come from Singapore, Japan and Australia. The group's Montblanc distribution business in Australia is also likely to benefit from the extended period of strong economy in Australia with its additional two Montblanc outlets that opened in the H1 of FY06.
We are raising our net profit forecast for FY06 and FY07 by 7 per cent assuming higher revenue growth of 10 per cent for FY06. New target price of $0.88 is based on eight times price-earnings ratio of FY07 earnings.
Assuming the same dividend rate is maintained as previously, with proceeds from the recent sale of an investment property, the stock offers an attractive yield of 6 per cent.
BUY
- Compiled by LESLIE YEE
BT
GuocoLand
Feb 10 close: $1.94
UBS INVESTMENT RESEARCH, Feb 9
GUOCOLAND has undertaken a series of balance sheet restructurings in the past five years. It is now well capitalised with a good management team. GuocoLand is 68 per cent controlled by Malaysian tycoon Quek Leng Chan through his 70 per cent interest in Guoco Group, which is listed in Hong Kong.
Guoco Group currently has US$3.1 billion cash in its balance sheet. We believe Quek Leng Chan has ambitions for GuocoLand to be transformed into a major real estate player in Asia, focusing on China, Vietnam, India, Malaysia, Singapore and Japan. With the support of its parent, GuocoLand is set to re-leverage and redeploy capital into Asian real estate.
GuocoLand has accumulated 11 million square feet gross floor area land bank in China. It is intending to double the land bank. GuocoLand has taken advantage of China's austerity measures by boosing its land bank in Shanghai, Beijing and Nanjing.
GuocoLand is planning to divest $370 million worth of non-core investment and redeploy into land banks in China, Vietnam and India. Divestment plans over the next 12 months include divesting a 21 per cent stake in Hotel Properties and a 5 per cent stake in Brierley Investment Holdings.
Its 14.5 times price-earnings ratio reflects a trough earnings cycle. GuocoLand is inexpensive from an asset valuation perspective. Its 4.1 per cent net dividend yield provides solid share price support. We initiate coverage with a price target of $2.50 per share. The price target implies one times price-revalued net asset value.
BUY
Pacific Andes Holdings
Feb 10 close: $0.68
OCBC INVESTMENT RESEARCH, Feb 10
PACIFIC ANDES Holdings delivered a 51 per cent year-on-year rise in Q3 earnings to HK$25.9 million (S$5.4 million). Recently listed China Fishery Group performed well. Demand for frozen fish remains strong in China.
We are keeping our FY06 earnings of HK$199 million as we are expecting Q4 to once again be the peak season.
With the successful launch of China Fishery, we expect management's next initiative to involve the deployment of the proceeds from the initial public offering into China Fishery's vessels as specified in the listing prospectus and also to look into vertical integration plans for its group of listed companies.
We continue to favour Pacific Andes despite the recent gains as we see two legs of growth: from China Fishery and from the core frozen fish trading business. With more certainty to its FY07 earnings and based on the same eight times parameter, we are raising our fair value from 59 cents to 68 cents.
BUY
Genting International
Feb 10 close: $0.37
MERRILL LYNCH, Feb 9
WE initiate coverage on Genting International (GIL) with a 12-month price objective of $0.43 per share. Our price objective is the sum of our net asset value estimate of $0.24 per share and our assessed option value of $0.19 per share.
We see potential short-term catalysts to the share price as largely relating to the legalisation of casinos in Singapore. GIL will submit bids for the Marina Bay and Sentosa sites.
GIL is the international investment arm of the Genting Group. It currently holds strategic investments in the UK market. GIL is the largest shareholder in Stanley Leisure and London Clubs International, which are two of the largest casino operators in the UK.
We believe GIL will focus on both the UK and Asia for new business opportunities due to its existing portfolio, the experience of the Genting Group and opportunities that we believe exist in these regions.
The group has extensive knowledge of the Asian casino market. It is the only casino gaming company in the world to have undergone probity checking by all of the major gaming markets, including the US, Australia, the UK and Malaysia. As to investment risks, the timing and extent of casino legalisation may differ from our forecasts and GIL's growth may be restricted by competition.
BUY
The Hour Glass
Feb 10 close: $0.745
NRA Capital, Feb 9
SWISS watch export data shows strong double-digit growth rates for Singapore (+59 per cent) and Australia (+67 per cent), where Hour Glass has significant retail presence. Japan and Australia confirmed their outstanding situations during the 12 months in 2005.
Growth in Hour Glass's group revenue in 2H of FY ending March 06 is expected to come from Singapore, Japan and Australia. The group's Montblanc distribution business in Australia is also likely to benefit from the extended period of strong economy in Australia with its additional two Montblanc outlets that opened in the H1 of FY06.
We are raising our net profit forecast for FY06 and FY07 by 7 per cent assuming higher revenue growth of 10 per cent for FY06. New target price of $0.88 is based on eight times price-earnings ratio of FY07 earnings.
Assuming the same dividend rate is maintained as previously, with proceeds from the recent sale of an investment property, the stock offers an attractive yield of 6 per cent.
BUY
- Compiled by LESLIE YEE
posted by SmartYInvestor at 9:47 AM
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