CAPITALAND COMMERCIAL TRUST | BUY
TARGET PRICE: $1.69
JAN 19 CLOSE: $1.565
DBS Group Research, Jan 19
We believe the acquisition of the remaining 60 per cent in CapitaGreen not only helps to offset potential negative rental reversions and lower occupancies for the rest of CapitaLand Commercial Trust's (CCT) portfolio, but will allow CCT to deliver 2 per cent growth in distribution per unit this year (excluding impact from redevelopment of Golden Shoe and potential sale of Wilkie Edge).
CCT's Singapore Grade A office portfolio trades at an implied value of about $2,000 per square foot (psf) compared to recent sales of between $2,700 and $3,500 psf.
While CCT's Grade A portfolio is unlikely to trade higher at $2,700 given the older profile of some of its properties, we believe the current strength of the physical market and 999-year leasehold status of some of its buildings warrants CCT to trade close to its book value of $1.73 per unit or an implied valuation of $2,100 psf. The next catalyst would be the sale of Wilkie Edge above book value.
FIRST REIT | HOLD
TARGET PRICE: $1.32
JAN 19 CLOSE: $1.30
OCBC Investment Research, Jan 19
First Reit reported a stable set of Q4 2016 results which met our expectations. While we like its healthy balance sheet (gearing of 30.8 per cent as at end-2016) and exposure to Indonesia's healthcare sector, we maintain "hold" rating as we see limited upside potential at price level.
QIAN HU CORPORATION | UNRATED
JAN 19 CLOSE: $0.181
NRA Capital, Jan 16
Qian Hu announced its Q4 2016 results on Jan 12. What's new is that Qian Hu took the opportunity to announce it is entering the edible fish business in China and the genetic breeding of albino dragon fish for the ornamental fish business.
The edible fish market is larger than that of ornamental fish. Based on our interpretation, the idea is that Qian Hu's proprietary filtration technology Hydropure and its fish nutrition know-how will allow it to breed fish with higher survival rates.
We find the recent events interesting but refrain from providing a rating at this juncture.
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