OUE LTD worth buying for long term

Written By Stock Fanatic on Wednesday, November 20, 2013

The Urban Redevelopment Authority (URA) has released the draft Masterplan 2013. Our key views are as follows:

A step in the right direction, in our view, balancing the economic priorities of housing, commercial and industrial developments with greater emphasis on decentralisation, eco-friendly initiatives and better public accessibility.

Greater priority on integrated and mixed-use developments could benefit larger developers with relevant experience such as CapitaLand, Frasers Centrepoint (F& N), Keppel Land, and City Developments.

Southern Waterfront development with the relocation of the Pasir Panjang and Tanjong Pagar terminals will benefit Mapletree Commercial Trust with its substantial retail and commercial exposure in the area.

Land earmarked for 500,000 new homes, with greater emphasis on HDB estates, will provide new opportunities for HDB construction companies such as United Engineers, Chip Eng Seng, Hock Lian Seng and Tiong Seng, together with HDB estate managers such as Isoteam, and material suppliers such as Hafary.

Opportunities for underground development (eg. 800m pedestrianised street with underground mall at Marina Bay) to benefit specialised underground construction players such as Kori Holdings.

Marina Bay and Marina South to offer new opportunities for office, retail and entertainment amenities that will complement REITs with existing developments in the area, such as Keppel REIT and Suntec REIT. Further development in the Jurong Lake District will be advantageous to CapitaMalls Trust and CapitaMalls Asia.

Development of Woodlands North Coast and Woodlands Central, together with the rail linkage to Malaysia, will generate greater demand for malls and upcoming developments owned by Frasers Centrepoint Trust (eg Causeway Point and Northpoint) and Frasers Centrepoint/F& N.

Figure 1: Key Beneficiaries Benefits to accrue over the medium to long term for the URA Masterplan. We remain cautious in the near term on the residential segment and prefer deep value and diversified property developers such as CapitaLand, Ho Bee and OUE as our top BUYs. (Read Report)

 

 



HOSPITALITY TRUST TO THE SHAREHOLDERS OF OUE LIMITED.

 

 

 

 

 

 

 

Copy & paste always come out rojak ....hope this one ok.....

2. THE PROPOSED DISTRIBUTION IN SPECIE OF STAPLED SECURITIES IN OUE HOSPITALITY TRUST TO THE SHAREHOLDERS OF OUE LIMITED

That subject to and contingent upon the passing of Ordinary Resolution 1:

(i) a distribution in specie of the stapled securities in OUE Hospitality Trust held by the Company be declared and distributed to shareholders of the Company after the Proposed Disposal is completed, subject to the terms and in the manner described in the Company?s circular to shareholders dated 19 November 2013 and

(ii) the Company and any director of the Company be and are hereby severally authorised to do all such acts and things as they may consider necessary, desirable or expedient for the purpose of giving effect to the Proposed Distribution In Specie by the Company and/or the transactions contemplated under this resolution, including without limitation to the foregoing, to negotiate, sign, execute and deliver all documents, approve any amendments, alterations or modifications to any document (if required).

NOTICE OF EXTRAORDINARY GENERAL MEETINGthat an EXTRAORDINARY GENERAL MEETING of OUE Limited (the " Company" ) will be held at 10.00 a.m. on 4 December 2013 at Mandarin Orchard Singapore, Mandarin Ballroom III, 6th Floor, Main Tower, 333 Orchard Road, Singapore 238867 for the purpose of considering and, if thought fit, passing (with or without modification) the following Ordinary Resolutions:

ORDINARY RESOLUTION

That:

(i) approval be and is hereby given for the proposed disposal of the property located at Collyer Quay in Singapore?s central business district comprising (i) OUE Bayfront, an 18-storey premium office building with rooftop restaurant premises located at 50 Collyer Quay, which is complemented by retail facilities at its ancillary properties, namely (ii) OUE Tower, a conserved tower building located at 60 Collyer Quay and (iii) OUE Link, a link bridge located at 62 Collyer Quay with retail units, together with the plant and equipment therein (collectively, the "

(ii) approval be and is hereby given for the payment of all fees and expenses relating to the Proposed Disposal

(iii) approval be and is hereby given for the entry by the Company (whether directly or indirectly through its subsidiaries) into all agreements and transactions in connection with the Proposed Disposal and all ancillary agreements contemplated thereby or incidental thereto, or which are necessary to give effect to the Proposed Disposal and

(iv) the Company and any director of the Company be and are hereby severally authorised to do all such acts and things as they may consider necessary, desirable or expedient for the purpose of giving effect to the Proposed Disposal by the Company and/or the transactions contemplated under this resolution, including without limitation to the foregoing, to negotiate, sign, execute and deliver all documents, approve any amendments, alterations or modifications to any document (if required).OUE Bayfront Property" ) to a proposed real estate investment trust to be known as OUE Commercial Real Estate Investment Trust (the " Proposed Disposal" ) by the Company on the terms and conditions set out in the property sale and purchase agreement to be entered into between the Company and DBS Trustee Limited, in its capacity as trustee of OUE Commercial Real Estate Investment Trust, for the Proposed Disposal

ORDINARY RESOLUTION

2. THE PROPOSED DISTRIBUTION IN SPECIE OF STAPLED SECURITIES IN OUE HOSPITALITY TRUST TO THE SHAREHOLDERS OF OUE LIMITED

(ii) the Company and any director of the Company be and are hereby severally authorised to do all such acts and things as they may consider necessary, desirable or expedient for the purpose of giving effect to the Proposed Distribution in specie of the stapled securities in OUE Hospitality Trust held by the Company be declared and distributed to shareholders of the Company after the Proposed Disposal is completed, subject to the terms and in the manner described in the Company?s circular to shareholders dated 19 November 2013 andIn Specie by the Company and/or the transactions contemplated under this resolution, including without limitation to the foregoing, to negotiate, sign, execute and deliver all documents, approve any amendments, alterations or modifications to any document (if required).

NOTICE IS HEREBY GIVEN

OUE Limited - In the Process of Transformation

Written By Stock Fanatic on Monday, November 11, 2013

3Q13 affected by higher borrowing costs and one-off expenses. OUE reported lower-than-expected 3Q13 net profit of SGD13.4m (-8% QoQ, -44% YoY), due mainly to higher borrowing costs as well as a SGD5m loss from the sale of its two hotels in China. 9M13 PATMI fell short, coming in at just 33% of our full-year estimate. 

Maintain BUY with a revised TP of SGD3.05, pegged to a 30% discount to RNAV following a transfer of coverage. 

Expenses on the rise

Besides higher borrowing costs arising from fair value loss on derivatives, other OPEX also increased on higher legal and professional fees incurred in the listing of OUE Hospitality Trust (OUEHT). 3Q13 PATMI would have been even lower, if not for a SGD4.9m tax credit as opposed to a SGD4.4m tax charge in 2Q13. OUE Bayfront suffered a marginal SGD72.2m fair value loss, which was offset by a SGD73.1m fair value gain on US Bank Tower.

MOS and MG remain consolidated within OUE

OUE spun off Mandarin Orchard Singapore (MOS) and Mandarin Gallery (MG) into OUEHT, which was listed in Jul 2013. Despite the fact that MOS was transacted at SGD1.2b, the asset remains consolidated on OUE?s balance sheet at historical cost less accumulated depreciation (~SGD115m) due to the adoption of FRS110 ? a new accounting standard that requires investees to be consolidated if the investor retains control over the former, regardless of its equity stake.

Next up, OUE Commercial Trust? 

Following the listing of OUEHT, OUE is exploring the listing of a commercial REIT comprising OUE Bayfront as a seed asset, along with Lippo Plaza in Shanghai, currently held by HK-listed Lippo China Resources Limited. While we see this positively as it will strengthen OUE?s fund management business and raise the probability of bumper dividends in FY14, we will also keenly watch how OUE will redeploy the balance of the proceeds.

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Valuations are inexpensive

We cut our FY13-15 forecasts by up to 45% after factoring in higher cost of borrowing and adjusting our sales assumptions for Twin Peaks. Nonetheless, OUE currently trades at 0.6x FY14 P/B and 0.55x FY14 P/RNAV, which we think are inexpensive. We expect some re-rating with the fruition of the commercial REIT listing, which is likely to happen in 2014.(Read Report)