Overseas Union Enterprise

[winston]

Vested

Up 2.8% on no news.

Technical rebound after the sharp sell-off ?

[winston]

They were asking you to buy from 3.50 all the way down to 2.82. And they didnt even mention the Convertible Bonds in this latest report ...

Vested. From UOBKH:-


Overseas Union Enterprise (OUE SP) BUY
Price/Target: S$3.04/S$4.25 onds
Mkt Cap: US$2,361.4m/S$2,984.1
Daily Vol: US$5.9m
1-Yr Hi/Lo: S$4.00/220

Stars are Aligned: Fundamentals + Technicals + Newsflow
Analysts: Vikrant Pandey/Vijay Natarajan


What’s New?

We view the current share price as an excellent buying opportunity as it shows deep value and this is reflected in the technical patterns showing a rounding and triple bottom breakout. Newsflow is also supportive of the same.


Fundamentals

Attractive developer play on office upcycle. Overseas Union Enterprise (OUE) is the sixth-largest listed property developer in Singapore, deriving 57% of its value from the office segment. We expect office rentals and capital values to rise 9-10% in 2011 and 17-20% in 2012.

Debt headroom of S$700m-1.2b to fund acquisition plans. Net gearing dropped from 0.58x last year to 0.49x as at end-10. Taking into account Mandarin Orchard’s revaluation surpluses of S$1.02b currently held at its books for a value of about S$125m, the gearing further drops to 36%.

Assuming a target net gearing of 0.6-0.8x will present a debt headroom of S$700m-1.2b for funding its acquisition plans.

Beneficiary of favourable hotel outlook. The hotel segment accounts for about 20% of OUE’s value with Mandarin Orchard strategically located along Orchard Road, Singapore’s prime shopping belt. We forecast hotel RevPAR to grow 17% in 2011 to S$211, driven by a 15% growth in room rates on the back of sustained high occupancy levels of above 85%.

Valuation. Maintain BUY, target price S$4.25. The target price is pegged at parity to FY11 RNAV, taking into account a 20% premium for the office and hotel portfolio, a 20% discount for the retail and residential portfolio, and other competitive strengths and risk factors.
Technicals

Breakout from a Rounding and Triple Bottom


Newsflow

Grade A office capital value up 11.2% in Q1 ( Source:The Business Times, Mar 24) The average capital value of Grade A office space in the Raffles Place/New Downtown area increased about 11.2% qoq to $2,322 psf in 1Q11, according to Colliers International. The property consultancy predicts the full year increase will come in at about 25% to about $2,600 psf.

[winston]

Vested. Another "expert" talking about everything else except their Convertible Bonds ..

Positive on the office sector, reiterate Buy

We reiterate our Buy rating on OUE with a target price of S$4.55. for the company. We like OUE’s disciplined strategy of targeting undervalued acquisitions, especially when asset
valuations are high now.

Between now and 2014, OUE will have one asset enhancement project completed annually. We believe that the positive outlook for the office sector is a major catalyst for the stock given that offices account for 49% of our RNAV forecasts.

OUE is trading at a 32% discount to RNAV vs Keppel Land’s 26%.

Source: RBS

[winston]

Vested. From UOBKH:-

Overseas Union Enterprise (OUE): Prices inaugural issue of S$300m unsecured fixed rate notes. The notes issued are expected to mature on 15 Apr 14 and will yield an interest of 4.3% payable semi-annually in arrears. (Source: The Business Times)

Comments: The fixed rate notes will be the first series of notes to be issued under the S$1b multicurrency medium term note programme established by OUE on Jan 11.

OUE has about S$481.1m of debt maturing (30.2% of total) in the current financial year. The proceeds from the notes will be used to finance OUE's general corporate funding, refinance the bank’s existing borrowings as well as general working capital purposes.

[winston]

Vested

Singapore's OUE says looking to launch office REIT by 2013

SINGAPORE, April 15 (Reuters) - Singapore real estate firm Overseas Union Enterprise (OUE) said it is looking to launch an office REIT by 2013 when the upgrading of its properties are expected to be completed.

"Our view is that 2013 would be a very good time because by then our asset enhancement initiatives hopefully will have been completed," chief financial officer Rudi Chuan told reporters.

Indonesia's Lippo Group took control of OUE last year after buying out partner Malaysian billionaire Ananda Krishnan in a deal valued at $684 million.


Source: Reuters

[winston]

Vested

Overseas Union Enterprise Ltd. (OUE) : The Singapore- based hotel operator said it will buy the Crowne Plaza Changi Airport Hotel for S$250 million ($201 million).

OUE will also buy an adjacent block of land for S$43 million and build a 200- room Holiday Inn Express. The acquisition will boost the number of hotel rooms it has in Singapore to as much as 2,146 from 1,626 now, OUE said.

The stock dropped 0.9 percent to S$3.16 before it was suspended from trading.

Source: Bloomberg

[ichew]

LC devlpt own 50% stake
so they will get abt $125m or S$0.12 cash per sh
but not sure how much debt LC has now
just curious how much div they will return (or if any at all )
LC dev last done at $0.175

[winston]

Vested. When was China overhang a problem ? it was all about the Convertible Bonds with CS. And none of the "expert" analysts have mentioned anything about it ..

Focus back in Singapore, China overhang removed - by Donald Chua

OUE has announced that it is acquiring a 100% stake in the Crown Plaza Changi Airport Hotel (CPCAH) for S$250m, with a proposal to develop a further 200 rooms for an additional S$80m.

While the immediate impact to RNAV may be relatively muted (+3%), the acquisition demonstrates to us two things;
1) OUE's eye in deriving higher yields from acquisitions through asset enhancements, and more importantly
2) OUE's commitment to remain as a Singapore pure-play with emphasis on prime assets.

This should dispel any China overhang concerns. We believe the acquisitions will not stop here. We view this development positively.

We raise our target price by 8% to S$4.16 on lower valuation discount from 15% to 10% and RNAV uplift from CPCAH. FY11-13 core EPS is raised by 1-6%.

Maintain Outperform with OUE replacing UOL as one of our top picks in the sector.

Source: CIMB

[winston]

Vested. From UOBKH:-

Valuation/Recommendationï‚·

Maintain BUY, with a revised target price of S$4.30.

We revise our RNAV estimates marginally up by +1% to S$4.30/share, factoring in acquisition contribution. The target price is pegged at parity to FY11 RNAV and takes into account a 20% premium for the office and hotel portfolio, a 20% discount for the retail and residential portfolio, and other competitive strengths and risk factors.

The stock is currently trading at a steep 27% discount to its FY11 RNAV.

http://research.uobkayhian.com/content_ ... c625108a5a

[winston]

Vested

Maintain OUTPERFORM

OUE remains one of our top picks for its prime commercial and hospitality exposure (58% and 19% of RNAV respectively). With the stock trading at a significant 32% discount to RNAV of S$4.67, we reiterate our OUTPERFORM rating.

Source: CS