Overseas Union Enterprise

[winston]

Vested

Buyback of 800,000 shares out of 1.1m shares traded on Oct 19

[winston]

vested

Buyback of 1m shares out of 1.6m shares traded today

[winston]

Vested. Looks like they are starting quite predictable with their buybacks. Always buying close to the closing ? Wanna front-run them ?

Buyback of 993,000 shares out of 1.6m shares

[winston]

vested

Buyback of 2.2m shares out of 3.8m shares traded today

[winston]

Vested

OUE's Q3 profit dives in absence of fair-value gains
Revenue up 68.7%, helped by hospitality and property investment arms


By EMILYN YAP


OVERSEAS Union Enterprise (OUE) yesterday posted a higher revenue for the third quarter, but greater finance costs and the absence of fair value gains led to a lower bottom line.

For the three months ended Sept 30, profit attributable to owners of the company dived 84.5 per cent to $19.8 million from Q3 2010's $127.3 million.

Earnings per share slipped to two cents from 13 cents a year earlier.

This was despite OUE reaping a 68.7 per cent increase in turnover to $86.4 million.

The main cause for the profit fall was the absence this time round of $128.4 million in fair value gains on investment properties it booked in Q3 2010.

For the July-September 2011 quarter, OUE registered a $1.8 million fair value loss on other investments.

Heavier finance expenses also partly offset the higher takings. The line item jumped to $13.7 million - against just $498,000 for Q3 2010 - as borrowings increased.

At the operating level, Q3 profit actually surged 76.6 per cent to $34.3 million.

OUE's hospitality arm brought in a higher revenue of $57 million on the back of better performance at all its hotels and the acquisition of Crowne Plaza Changi Airport.

The group's property investment division also posted an increased top line of $27 million, helped by contributions from DBS Towers One and Two and OUE Bayfront.

For the nine months ended Sept 30, OUE's profit attributable to owners of the company was $267.5 million, dropping 18.6 per cent from a year ago.

Earnings per ordinary share were 27 cents, lower than last year's 33 cents.

Nine-month revenue climbed 50.3 per cent to $226.9 million, but a 22.3 per cent drop in 'other gains' to $247.4 million weakened performance.

A key factor was the inclusion in the first nine months of 2010 of a $52.5 million reversal of impairment losses on development property.

OUE expects its recurring income base to receive a boost when One Raffles Place Tower 2 is completed.

The group has a partial indirect interest in the development, which will offer 350,000 square feet of prime office space when it is ready.

'In spite of the softening in office rentals, we expect that there will still be demand for Grade A office space, in view of the rising number of foreign companies setting up offices here,' said OUE executive chairman Stephen Riady.

On the stock market yesterday, OUE gained six cents to close at $2.28.

Source: Business Times

http://www.businesstimes.com.sg/sub/com ... 62,00.html?

[winston]

vested

OUE: Signs of asset weakness (BUY, S$2.28, TP Under Review)-Flash

OUE released 3Q11 results broadly below expectations, mainly due to lower than expected contributions from the hospitality segment and higher finance costs.

We raise concerns regarding the slow take up for office space in OUE Bayfront and easing of ASPs at Twin Peaks, as well as its consequent negative implications to OUE’s RNAV.

Pending conference call with management for more takeaways regarding the results and recent updates, we place our target price for OUE under review and BUY maintained for now.

Only marginal improvement in OUE Bayfront occupancy. We note that occupancy of
OUE Bayfront has only crept up marginally by c.3% to 80.65% from 2Q11 to 3Q11.

We believe this is a reflection of weakening office sector fundamentals which likely affected
take up for this recently completed prime asset (NLA 394.253 sf, TOP Jan 11), with negative implications for OUE’s c.50% GAV exposure to the office sector.

Twin Peaks showing weakness. With the loss in momentum for the residential sector
prices especially in the high-end segment, we also note 8 units for OUE’s sole residential project Twin Peaks sold in the quarter of which 5 units were transacted at S$2,600 level.

From higher prices of units sold at S$2,900 level in Jan 11 to S$2,700 level in Jun 11 and further pricing weakness in 3Q11, we note possible erosion of OUE’s RNAV from Twin Peaks’ exposure to the high-end residential segment.

TP under review, downward revision bias but BUY maintained for now. We place our TP for OUE under review for now pending conference call with the management.

While we continue to like OUE for its asset quality; however with writings on the wall regarding headwinds shrouding the office sector;

We are likely to revise our RNAV downwards to account for weakness in its office exposure as well as ascribing higher discount to RNAV to factor in poor trading liquidity;

As well as pricing risk in the high-end segment which is more subject to the downside during periods of economic weakness.

Source: DMG

[winston]

vested

Overseas Union Enterprise [ PDF]
Of acquisition costs and timing
OUE SP / OVES.SI | OUTPERFORM - Maintained | Share Price S$2.28 - Tgt. S$2.45

3Q11 results miss Street estimates on slower residential sales (Twin Peaks), a one-time charge from the purchase of CPCA and lower contributions from OUEB. The latter is 83% preleased but has yet to contribute fully.

These masked a strong showing from its hotels. 3Q11 core earnings form 20% of our FY11 forecast and 12% of consensus. 9M11 earnings form 57%.

Maintain Outperform and estimates, together with our target price of S$2.45 (30% disc to RNAV), pending the results conference call.


Source: CIMB

[winston]

vested

While we still expect a better 4Q11 as OUE Bayfront fills up, we cut FY11-13E EPS by 21-35% to factor in higher costs, slower leasing for remaining space in OUE Bayfront and One Raffles Place Tower 2, and sales at Twin Peaks.

We cut our end-12 RNAV to S$3.66 (from S$4.67), as we reduce office, retail, hotel cap values by 10-20% on slower growth, eg. OUE Bayfront at
S$2,350/sqft from S$2,720/sqft.

We raise TP discount to 20% from 10% to factor in economic headwinds. New TP of S$2.93 still
offers an attractive 28% upside.

Source: CS

[winston]

vested

Maintain Sell with TP of S$1.96 pegged to a 45% disc to NAV.

We trim our FY11-13e PATMI by 2-3% reflecting higher interest expense and slower devt profit recognition and now expect core FY11e PATMI of S$97.2m (-16% YoY) with stronger contribution in 4Q from CPCA & OUE Bayfront.

We maintain Sell with the group vulnerable in a weaker operating environment with its portfolio skewed towards the volatile office and hospitality segments with relatively low pre-commitments and bulky lease expiries.

Valuations are not particularly attractive at 0.74x P/B, 17x FY12e PER and 36% disc to RNAV, narrower than larger peer Keppel Land's 40% disc.

Source: DB

[winston]

vested

Maintain O-PF with S$2.67 target

We maintain Outperform on OUE with S$2.67 target, pegged at 40% discount to S$4.45/share RNAV estimate.

Despite the softening of office leasing activities, we believe the market has factored in significant downside as reflected by the steep RNAV discount of 49%.

Source: CLSA