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Company Initiation
City Developments Limited
24 Oct 16, 8.15am/11.15am Morning Call/Webinar
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2
Disclaimer
The information contained in this presentation has been obtained from public sources which Phillip Securities Pte Ltd (“PSPL”) has no reason to
believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this
presentation are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or
warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any
such information or Research contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the
information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be
liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made
available, even if it has been advised of the possibility of such damages.
This presentation is intended for general circulation only and does not take into account the specific investment objectives, financial situation or
particular needs of any particular person.
You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment
objectives, financial situation or particular needs, before making a commitment to invest in such products.
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3
“ACCUMULATE” rating, TP: S$9.98, Last close: S$8.77
52-week range: S$6.55 – S$9.24
Market Cap: S$8bn
Initiating coverage
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4
CDL Gross Asset Value by Segment
SG Residential, 37%
Overseas Residential, 16%SG Hotels, 5%
SG Office, 19%
SG Retail, 6%
Others (SG), 1%
Overseas Commercial, 4%
Millenium and Copthorne (65% stake), 11%
City e-Solutions (53% stake), 1%
Source: Company, Phillip Securities Research (Singapore)
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Singapore Property Development
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6
CDL to benefit amid thinning supply of new CCR properties
3-year time gap no land sales in CCR
Unsold units in CCR made up 40.7% of CDL’s development properties
CCR Market Segment
Source: REALIS, Phillip Securities Research (Singapore)
5,000
7,000
9,000
11,000
13,000
15,000
17,000
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15
Unsold units in CCR (RHS) CCR/RCR (LHS) CCR/OCR (LHS)
Ratio of CCR properties to RCR and OCR and remaining unsold units in CCR
Development Project Total Units Unsold Units Sold Units
St Regis Residences 173 12 161
The Oceanfront @ Sentosa Cove 264 1 263
One Shenton 341 14 327
Cliveden@Grange^ 110 66 44
UP@Robertson Quay 70 13 57
South Beach Residences* 190 190 0
New Futura* 124 124 0
Gramercy Park 174 137 37
Echelon 508 2 506
The Venue Residences^^ 266 115 151
Forest Woods 519 179 340
Commonwealth Towers 845 416 429
Bartley Ridge 868 1 867
D'Nest 912 12 900
Coco Palms 944 88 856
Total (Exclude EC) 6,308 1,370 4,938
The Brownstone 638 139 499
The Criterion 505 354 151
Total (Include EC) 7,451 1,863 5,588
* - Development is unlaunched
^^ - 150 units are unlaunched
EC
Source: Company Data, Phillip Securities Research (Singapore)
^ - 44 units are owned under a special purpose vehicle and leased out
CCR
OCR
RCR
CDL’s portfolio of unsold units as at 2Q16
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7
…D9 and D10 in focus
ASP of new developments in D9, 10 and 11 fell an average of 20% in last 5
years
iLiv@Grange sold at S$1,623 PSF, S$307 PSF losses
Gramercy Park (22% sold), Cliveden@Grange (37% sold including leased units)
and New Futura (yet to be launched)
Near term price pressure in CCR…
Images of Gramercy Park, Cliveden@Grange and New Futura, Source: Company Website
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8
3rd Tranche of Profit Participation Security (PPS) launched on 21 October 2016
Injected Nouvel 18 development project into 3rd PPS for a price of S$977.6 mn
Investors get a 5% yield per annum in return
The result?
1. Fetched a price of S$2,750 PSF for a c.22% PBT margin
2. Avoid QC extension charge of S$37.2 mn in Nov-16
3. Expanded fund management platform to S$3.5 bn (Target FY18: S$5 bn)
Timely launch of 3rd PPS
Images of Nouvel 18, a 174-unit luxury development located at Ardmore Park, Source: www.nouvel18.com
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9
7 development projects have more than 10 % unsold units
No QC or ABSD due for the 2016; next is Sep-17
Strong balance sheet (20% net gearing) - not pressed for time to clear
these units
Apart from Commonwealth Towers and The Venue Residences, in good
stead to clear inventory of unsold units
No need to perform fire sale
Projects with >10% unsold units, impacted by upcoming QC extension charges
Project Market segment Unsold units (%) Land cost (S$'mn) Estimated QC fee (S$'mn) QC/sqft QC deadline
Gramercy Park CCR 79 383 24 73 May-18
New Futura (Unlaunched) CCR 100 287 23 92 Nov-18 (est)
Source: Company Data, Phillip Securities Research (Singapore)
Projects with >10% unsold units, impacted by upcoming clawback of ABSD
Project Market segment Unsold units (%) Land cost (S$'mn) Estimated ABSD (S$'mn) ABSD/sqft ABSD deadline
The Venue Residences RCR 43 245 31 233 Sep-17
Commonwealth Towers RCR 49 563 70 224 Dec-17
The Criterion [EC] OCR 70 179 22 58 May-18
The Brownstone [EC] OCR 22 226 28 197 Jan-19
Forest Woods RCR 35 321 40 253 Nov-20
Source: Company Data, Phillip Securities Research (Singapore)
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10
Balance sheet has S$3.3 bn cash and a net gearing of 26% vs. historical average
of 40%
Net gearing of 20% (including fair value gains) is lower than the industry average of
26%
Large cash pile and low gearing to pick up value accretive investments when
opportunities surface
Strength in balance sheet
CDL’s historical net gearing
0.40 X
0.00 X
0.10 X
0.20 X
0.30 X
0.40 X
0.50 X
0.60 X
0.70 X
0.80 X
0.90 X
3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Company Data, Phillip Securities Research (Singapore)
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11
CDL Launched Forest Woods, 519-unit RCR development in Serangoon, on 15
October 2016
Sold 66 % of the project within the first weekend
Smaller units (<1,000 sqft) accounted for 60% of total sales volume
Unlike The Venue Residences, where more than half of the development remained
unsold (including 44% of unlaunched units)
Smaller sized units in Forest Woods is most likely behind the buoyancy in sales
Strong take up at Forest Woods
Images of Forest Woods, Source: Company Website
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12
Commonwealth Towers (416 / 845 units unsold)
Plenty of competition in the Queenstown and Potong Pasir area
Queen’s Peak, a new project which add another 736 units to the current available units within the
area.
Healthy YTD average price of S$1,750 PSF, higher than our estimated breakeven cost
Need to clear 32 units per month till ABSD remission clawback on Dec-17; YTD sales volume is
36 units
Price cuts expected at Commonwealth Towers and The Venue Residences
Price transactions at Commonwealth Towers (S$'PSF)
Source: REALIS, Phillip Securities Research (Singapore)
1,748
1,400
1,300
1,350
1,400
1,450
1,500
1,550
1,600
1,650
1,700
1,750
1,800
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
Average monthly transacted price Average YTD transacted price Breakeven cost
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13
The Venue Residences (115 / 266 units unsold )
Poiz Residences, a nearby development still has 166 units unsold. + recent en-bloc transaction
at Raintree Residences add another 750 units
Purchase price of units in The Venue Residences is larger than Poiz Residences due to larger-
sized units
Land cost of S$710 PSF at The Venue Residences is the lowest among the three projects (Poiz
Residences: S$775 PSF, Raintree Residences: S$797 PSF)
Price cuts expected at Commonwealth Towers and The Venue Residences
Source: REALIS, Phillip Securities Research (Singapore)
1,190
1,392
1100
1150
1200
1250
1300
1350
1400
1450
1500
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
Average monthly transacted price Average YTD transacted price Breakeven cost
Price transactions at The Venue Residences (S$'PSF)
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14
No catalyst for a market recovery until unwinding of cooling measures
Property prices retraced by 10 % from a high in 2013
Further price gains would reduce affordability as prices of private propertieshave grown by c.70% in the past 10 years while median wage growth was up60%
Premature for the Singapore Government to unwind the existing propertycooling measures
Committed to moderate growth and not create hard landing
Developers with strong balance sheet like CDL will weather this period ofslowness and emerge largely unscathed
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Singapore Investment Properties
Segment
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16
Solid execution for Group’s office portfolio
Rental Properties contributed 21.3% of total profit before taxes and is the
second largest contributor of profits
Office properties formed bulk of the portfolio’s value (72.6%)
Group’s portfolio of offices continues to enjoy healthy occupancy of 97.4%
versus the national average of 90.9% as at 2Q16 despite the softness in
demand for office space
We expect negative rental growth in the next 2 years
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17
South Beach on track to be fully completed by 4Q16
South Beach, a mixed development consisting of a hotel, office, retail space
and 190 residential units
Office and retail space are 99% and >76 % leased respectively
~50 % of retail space has already been opened to the public.
We will be monitoring the hotel segment of the mixed development after it has
been rebranded to The JW Marriott Hotel Singapore South Beach.
Images of South Beach, Source: Company Website
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Hospitality Segment
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19
65% stake in Millennium and Copthorne (Listed in London)
Asset-heavy/Capital Intensive Business Model
Millennium and Copthorne
% of self-owned hotels amongst major international hotel chains
67%
33%
6%3% 2% 1% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
M&C Accor Hyatt Hilton Starwoods Marriott IHG
Source: Company Annual Reports, Bloomberg, Phillip Securities Research (Singapore)
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20
Investor Concerns over asset-heavy business model
Asset-light hotel operators (eg. InterContinental) outperformed
Millennium and Copthorne
Price performance of major international hotel chains vs M&C since post GFC (2010 to present)
39
160
71
64
181
329
-50
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014 2015 2016
Millennium & Copthorne Hotels PLC Starwood Hotels & Resorts Worldwide LLC
Accor SA Hyatt Hotels Corp
Marriott International Inc/MD InterContinental Hotels Group PLC
Source: Bloomberg, Phillip Securities Research (Singapore)
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21
Current P/NAV of 0.56 Below 10-year historical mean of 0.7
Singapore Hospitality S-REITs trade from 0.66-0.92x
Reversion to mean trading valuations OR Monetisation strategies could be
positive to CDL (Eg CDL HT, First Sponsor)
Low Price to NAV valuations
M&C Historical Price to NAV chart
0.56
0.7
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Bloomberg, Phillip Securities Research (Singapore)
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22
London and Singapore are main markets
Improving outlook for both segments from Year-To-Date data
Tourism Outlook
Breakdown of M&C’s 126 hotels by geographic regions
32
48
19
27
Asia
Europe
US
Australasia
Source: Company, Phillip Securities Research
(Singapore)
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23
London welcomed a record 18.5m international visitors in 2015 (up 6.8% y-o-y)
2016 is slower, but could be different post BREXIT. July saw first positive growth
since March
London Tourism
London International Tourist Arrivals and Total Spending
£0
£2,000
£4,000
£6,000
£8,000
£10,000
£12,000
£14,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Spending (£m) (RHS) Total International Visitors (000s)
Source: VisitBritain.org, Office for National Statistics, Phillip
Securities Research (Singapore)
-3.3%
2.9%
-5.9%
-0.5%
-7.2%
-8.8%
2.3%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
Jan Feb Mar Apr May Jun Jul
Source: UK Office for National Statistics, Phillip Securities Research
(Singapore)
BREXIT
2016 UK International Tourists Total Receipts Y-o-Y change
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24
GBP has depreciated c.14% against the USD to c.1.27 since Brexit in June
Bloomberg Composite forecast for GBP/USD is c.1.32 going forward to 2017/2018.
Continued weakness in GBP could help tourism (See Japan Example)
Depreciation of GBP could help
USD/JPY – Depreciation of the yen since 2012…
2016 UK International Tourists Total Receipts Y-o-Y change
60
70
80
90
100
110
120
130
2010 2011 2012 2013 2014 2015 2016
Source: Bloomberg, Phillip Securities Research (Singapore)
Yen started depreciating following announcements of
loose monetary policies by BOJ -27.8%
34.4%
24.0%29.4%
47.1%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
2011 2012 2013 2014 2015
Source: Bloomberg, Phillip Securities Research (Singapore)
Strong growth in tourism bouyed by weak yen and
tourists' increased spending power
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25
Improvements in data for 2016 year to date
Tourist arrivals grew 11.8% January-July 2016 (2014: -3%, 2015: 0.9%)
Total Room Revenue average growth 3.8% ytd (2015: 0.9%)
Impact of low oil prices, Airbnb etc
Singapore Tourism
Singapore 2016 Tourist Arrival Numbers and Total Room Revenue Y-o-Y change
12.73% 12.30%
16.85%
15.28%
10.85%
7.16%6.74%
2.55%
11.25%
0.45%
9.49%
3.25%
-6.92%
6.29%
-10%
-5%
0%
5%
10%
15%
20%
Jan Feb Mar Apr May Jun Jul
2016
Tourist Arrivals Total Room Revenue
Source: CEIC, Phillip Securities Research (Singapore)
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Overseas Residential Properties
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27
International growth and overseas diversification strategy will start reaping rewards
from 2016-2018
Substantial sales and developments complete during this period
China: Suzhou Industrial Park project already profitable, Shanghai Villas in demand
UK: Hanover House Sales expected to fully complete by 2H16
Overseas Residential Projects
Launched overseas residential projects under CDL
Projects LaunchedCity Total Units Total Sold % Sold
Total Estimated
Saleable Area (Sq ft)
Estimated
Completion
Australia
Ivy and Eve Brisbane 472 423 90 348,678 1H2018
China
Hong Leong City Center (Phase 1) Suzhou 1374 945 69 1,376,570 4Q2016
Hongqiao Royal Lake Shanghai 85 18 21 385,394 Completed
UK
Hanover House (Reading) London 82 82 100 29,893 Completed
Source: Company, Phillip Securities Research (Singapore)
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28
China: Substantial completions in 2017. Shanghai, Suzhou, and Chongqing saw
median property prices increase 76.5%, 42% and 5.1% respectively since 2010
UK: Group remains confident of high end residential segment in London.
Overseas Residential Projects
Yet to be launched overseas residential projects under CDL – A series of completions from 2017-2019 to boost revenue
ProjectCity Total Units
Total Estimated
Saleable Area (Sq ft)
Estimated
Completion
China
Hong Leong City Center (Phase 2) Suzhou 430 448,844 4Q2017
Eling Residences Chongqing 126 354,814 2Q2017
Huang Huayuan Chongqing TBC 1,304,062 TBC
UK
Belgravia London 6 12,393 1Q2017
Knightsbridge London 3 5,193 1Q2017
Chelsea London 9 16,143 2018
Teddington London 239 240,000 2018/2019
Knightsbridge (Pavilion Road) London TBC 135,000 TBC
Stag Brewery, Mortlake London TBC 1,000,000 TBC
Japan
Shirokane Tokyo TBC 180,995 TBC
Source: Company, Phillip Securities Research (Singapore)
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29
Upside
•Unwinding of property cooling measures with ABSD and 60% TDSR in focus
•Broadening of immigration policy
•Depreciation in the S$ which could boost inbound tourism to Singapore
Downside
•A further slowdown in Singapore’s Real Estate sector
•Unforeseen circumstances (e.g. terrorism and pandemic) that are adverse to the Hospitality
subsector
Risks to our views
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30
Valuation Methodology
Investment properties: By applying appropriate market cap rates on net operating income
Development properties: Valued at Net Present Value of their after tax cash flow less all
associated costs RNAV Table
Segment Location Amount (S$'m) Per share (S$)
Residential SG 5,336 5.87
Overseas 2,356 2.59
Hotels SG 733 0.81
Office SG 2,698 2.97
Retail SG 927 1.02
Others SG 83 0.09
Commercial Overseas 550 0.60
Add: Market Value of stakes in Listed Entities
Millenium and Copthorne (65% stake) 1,569 1.73
City e-Solutions (53% stake) 138 0.15Total GAV 14,390 15.83
Add cash: 3,300 3.63
Less debt: 6351 6.98
RNAV: 11,339 12.47
No. of shares ('m) 909
Discount to RNAV (%) 20
Target Price 9.98
Source: Phillip Securities Research (Singapore)
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31
Historical Price to NAV
Trading at close to 2009 trough P/NAV Valuations
Our use of 20% discount to RNAV is conservative and lower than historical mean
1.22
0.97 0.93
0.72
0.5
1
1.5
2
2.5
3
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16
Price to NAV Mean +/-1SD +/-1SD +/-2SD +/-2SD
Source: Bloomberg, Phillip Securities Research (Singapore)
CDL Historical Price to NAV
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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32
Peer comparison
Name Mkt Cap (SGD mn)
Last
Price
(SGD) P/E ROE ROA
Dividend
Yield P/B Debt/Assets
CITY DEVELOPMENTS LTD 7,975 8.77 10.7 6.2 3.8 1.8 0.90 31.9
CAPITALAND LTD 13,221 3.12 14.0 4.2 2.1 2.9 0.79 33.9
GLOBAL LOGISTIC PROPERTIES 8,530 1.82 10.3 -0.1 3.4 3.3 0.72 21.8
UOL GROUP LTD 4,594 5.7 14.6 4.4 2.7 2.6 0.58 23.5
FRASERS CENTREPOINT LTD 4,393 1.515 7.4 7.6 2.6 5.7 0.69 41.2
UNITED INDUSTRIAL CORP LTD 3,874 2.73 12.4 5.2 3.7 1.1 0.63 16.0
YANLORD LAND GROUP LTD 2,700 1.39 7.0 5.8 2.3 1.1 0.64 21.1
GUOCOLAND LTD 2,390 2.02 3.5 4.0 7.4 2.5 0.68 48.4
WHEELOCK PROPERTIES (S) 1,795 1.5 31.6 1.9 1.5 4.0 0.60 12.9
HO BEE LAND LTD 1,419 2.13 5.2 10.2 6.8 3.3 0.52 33.5
OXLEY HOLDINGS LTD 1,360 0.465 6.6 32.8 4.8 4.4 1.74 55.6
WING TAI HOLDINGS LTD 1,323 1.71 187.9 0.2 0.1 1.8 0.42 27.7
BUKIT SEMBAWANG ESTATES 1,168 4.51 13.1 6.8 6.1 7.3 0.89 0.0
SIM LIAN GROUP LTD 1,086 1.08 15.8 5.9 4.0 6.7 0.94 17.1
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Singapore Exchange Limited
Seasonally lower costs provide respite
Jeremy Teong
Phillip Securities Research Pte Ltd
24 October 2016
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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34
Securities Trading and Clearing dragged down by low SDAV
SDAV $0.99bn ( 19% y-o-y): primary listing market cap 3% y-o-y, velocity y-o-y to 36% from
46% and 14th July shutdown
Issuer Services and Market Data & Connectivity stable
Supported EC World REIT and China Jinjiang Env Holding listings, bonds listings and colocation
services
Do not expect margin accretion from cost savings
FY16 Opex S$409mn, PSR’s FY17e Opex before 1Q17 results was S$429mn, Mgmt’s guidance on
FY17e Opex is S$420mn to S$430mn.
Near term catalyst
RMB initiatives to engage companies from Chongqing, Suzhou and Tianjin
Singapore Exchange Limited(Maintain Accumulate. Lower TP:S$7.69, previously S$7.99. Last:S$7.21)
Results at a glance
(SGD mn) 1Q17 1Q16 y-o-y 4Q16 q-o-q Comments
Securi ties 47.1 55.9 -16% 47.6 -1%Average clearing fee unchanged at 2.89bps y-o-
y. SDAV decreased 19% y-o-y
Derivatives 70.8 90.9 -22% 74.5 -5% Decl ine in China A50 and Nikkei 225 volumes
Others 72.9 72.8 0% 76.0 -4% Supported by IPO and Bond Lis tings and growth
in Colocation Services
Total Revenue 190.8 219.6 -13% 198.1 -4%
Opex 93.7 102.3 -8% 106.4 -12%Seasonal ly lower Dep. Costs , lower marketing
costs and lower Staff Variable Bonus
Net Income 83.1 99.3 -16% 76.8 8%
Source: Company, Phill ip Securities Research (Singapore)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Keppel DC REIT
Preferential Offering to fund acquisition of
Keppel DC Singapore 3
Richard Leow
Phillip Securities Research Pte Ltd
24 October 2016
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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36
High portfolio occupancy (92.3%→92.7%), but at the expense of negative
reversions
Higher occupancy at KDC SGP 1 (f.k.a. S25): 85.7%→87.6%
Client expanding by 6,800 sq ft in two phases (half in 2HFY16, half in
2HFY17)
100% occupancy maintained at KDC SGP 2 (f.k.a. T25), with a major
client renewing for more than five years, thus extending WALE to 4.2
years from 1.2 years, but…
-8% reversion, estimate client occupies c.75% of the data centre
Keppel DC REIT(Accumulate, TP:$1.26, FY16e DPU: 7.00 cents (5.7%), Last:S$1.18)Results at a glance
(SGD mn) 3Q16 3Q15 yoy (%) Comments
Gross revenue 22.66 25.74 (12.0) Client at Dublin 1 downsized in 1Q16, one-off non-csah downward adjustment at
Almere, drop in variable income at Singapore Properties, depreciation of GBP and
MYR against SGD
Net property income 22.70 21.37 6.2 Lower property operating expenses
Distributable income 16.78 14.48 15.9 Higher unreal ised foreign exchange gains , lower other expenses and
higher finance income
DPU (cents) 1.90 1.64 15.9 Includes one-off distributable income arising from net property tax refund
DPU, adj. (cents) 1.67 1.64 1.8 Adjusted for one-off refund of 0.23 cents
Source: Company , Phi l l ip Securi ties Research (Singapore)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
37
Acquisition of 90% interest in Keppel DC Singapore 3 (KDC SGP 3, f.k.a.
T27), targeted for December
Requires Unitholder approval at EGM
Fully-committed to two clients
Stability of income: SGD-denominated and long WALE of 5.7 years
274-for-1,000 PO to raise c.S$279.5M, increasing Unitholder base by 27%
S$208.6M: acquire 90% interest in KDC SGP 3
S$33.4M: repay existing short-term debt associated with acquisition of IC2
S$33.3M: repay loans, capex and/or future acquisitions
S$4.2M: fees and expenses incurred in connection with PO
Keppel DC REIT(Accumulate, TP:$1.26, FY16e DPU: 7.00 cents (5.7%), Last:S$1.18)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Cache Logistics Trust
Takes a hit from Schenker Megahub
Richard Leow
Phillip Securities Research Pte Ltd
24 October 2016
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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39
No capital distribution component this quarter; and do not expect it going
forward
S$2.98mn balance from divestment of Kim Heng Warehouse, to be used
for capex
51 Alps Avenue (Schenker Megahub) fair value adjusted downwards by 31%
Revalued downwards by S$36.1mn from S$116.8mn to S$80.7mn
Prospects for opportunistic acquisition dimmed, expect downside to
organic DPU
Aggregate leverage: 39.8%→41.2%, recycle capital and pare down debt
Cache Logistics Trust(Reduce, TP:$0.81, FY16e DPU: 7.58 cents (8.6%), Last:$0.88)Results at a glance
(SGD mn) 3Q16 3Q15 yoy (%) Comments
Gross revenue 28.05 23.14 21.2 Contributions from six Australian properties acquired in 1Q15 and 4Q15, and DHL
Supply Chain Advanced Regional Centre (DSC ARC), offset by lower income from
Schenker Megahub
Net property income 22.07 18.78 17.5 Higher property related expenses due to convers ions to multi -tenanted
leases
Distributable income 16.58 16.81 (1.3) 3Q15 includes S$1.51mn capita l dis tribution
DPU (cents) 1.847 2.140 (13.7) 14.3% larger unit base - 897.8mn in 3Q16 vs. 785.6mn in 3Q15
DPU, adj. (cents) 1.847 1.948 (5.2) Adjusting for partial capital distribution of 0.192 cents from Kim Heng Warehouse in
3Q15
Source: Company, Phi l l ip Securi ties Research (Singapore)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
40
Disclaimer
The information contained in this presentation has been obtained from public sources which Phillip Securities Pte Ltd (“PSPL”) has no reason to
believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this
presentation are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or
warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any
such information or Research contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the
information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be
liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made
available, even if it has been advised of the possibility of such damages.
This presentation is intended for general circulation only and does not take into account the specific investment objectives, financial situation or
particular needs of any particular person.
You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment
objectives, financial situation or particular needs, before making a commitment to invest in such products.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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41
Analysts Pei Sai Teng, Macro
Jeremy Ng, Technical Analysis
Jeremy Teong, Banking & Finance
Soh Lin Sin, Consumer | Healthcare
Richard Leow, Transport | REITs (Industrial)
Dehong Tan, REITs (Commercial, Retail, Healthcare) | Property
Peter Ng, Property | Infrastructure
Ho Kang Wei, US Equity
Chen Guangzhi, Oil and Gas | Energy
By Phillip Securities ResearchMohamed Amiruddin, Operations Exec
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