Share this
Digg
Del.icio.us
StumbleUpon
Netscape
Yahoo
Technorati
Googlize this
Facebook
Export PDF
Print
E-mail
Phillip Securities initiates coverage on Overseas Union Enterprise (LJ3.SG) at Buy with a $4.28 target price with zero premium/discount applied to RNAV, representing 18.9% upside over Friday’s closing price.
It says OUE’s revenue is strengthened with the acquisition of DBS Towers in August 2010. It notes “FY11 earnings will be further reinforced by the completion of two Grade-A office buildings - OUE Bayfront in 1Q11 and One Raffles Place Tower Two in 2H11, and recognition of sales from residential development Twin Peaks.”
It says OUE’s revenue is strengthened with the acquisition of DBS Towers in August 2010. It notes “FY11 earnings will be further reinforced by the completion of two Grade-A office buildings - OUE Bayfront in 1Q11 and One Raffles Place Tower Two in 2H11, and recognition of sales from residential development Twin Peaks.”
The house tips revenue growth in FY10 and FY11 at 46% and 83%, respectively. It notes, 48% and 23% of its GAV derive from office and hotel properties, respectively: “These sectors are expected to remain positive in 2011 supported by sound economic fundamentals in the region.”
It adds spinning off assets into a REIT “is another excellent option available to OUE as a move to crystallize its investment value while retaining a controlling stake over the properties.”
Shares are off 0.6% at $3.58.
