Compiled by Claire Huang
GLOBAL LOGISTIC PROPERTIES | NEUTRAL
JULY 17 CLOSE: $3.31
TARGET PRICE: $3.38
Credit Suisse, July 17
GLP announced that Nesta Investment Holdings, a consortium including HOPU and GLP chief executive Ming Mei, has proposed to privatise GLP for an offer price of $3.38 in cash via a scheme of arrangement.
This is expected to be completed by April 14, 2018.
At an implied price-to-book ratio of 1.3 times, we view the exit valuation as attractive.
We raise our target price to $3.38, representing the offer price and recommend that shareholders accept the offer.
For Singapore developer exposure, we advise investors to switch to UOL and City Developments Limited.
SINGAPORE PRESS HOLDINGS | HOLD
JULY 17 CLOSE: $3.03
TARGET PRICE: $3.25
OCBC Investment Research, July 17
SPH announced that its Q3 FY17 profit after tax and minority interests declined 45.2 per cent year-on-year to $28.9 million, mainly due to poorer results from its media segment and a sizeable $37.8m impairment charge related to the magazine business.
Excluding the impairment charge, we note that group recurring earnings would have fallen by $17.1 million or 19.2 per cent and deem this quarter's results to have missed our expectations.
The management team indicated that they are actively pursuing growth opportunities to diversify revenue streams with their recent acquisition of Orange Valley Healthcare and the recent winning tender for a mixed site at Bidadari with joint venture partner Kajima Development.
In addition, SPH has also completed the sale of 701Search on June 30, 2017 and expects to recognise a profit of about $150m from the divestment in the next quarter. Given the latest set of weak results, our fair value estimate slips to $3.25.
ESR REIT | HOLD
JULY 17 CLOSE: $0.595
TARGET PRICE: $0.60
DBS Group Research, July 17
Downgrade to "hold", awaiting clarity on the new roadmap. With a new sponsor in place, we remain optimistic about ESR Reit's ability to access growth initiatives that new sponsor Eshang Redwood offers.
But we believe that this has been priced in at current valuations (price-to-net asset valuation and yield) which is at historical average level, till more clarity is seen to drive valuations higher.
Given limited upside to our target price since our upgrade in early 2017, we downgrade ESR Reit to a "hold".
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