Tuesday, July 23, 2013

Fraser & Neave : SOP value after capital reduction (CIMB)

Fraser & Neave
Current S$5.63
Target S$6.53
SOP value after capital reduction

 FNN shares have commenced “ex” trading. We believe that more clarity from TCC/Thai Bev on its plans to 1) restructure FNN’s F&B and property businesses and 2) restore the stock’s public float will be the key milestones to watch for and could catalyse the stock.

We slash our SOP estimates from S$10.94 to S$7.60,largely to account for the capital reduction. Our FY14-15 core EPS numbers are cut by 3-6%. Thus, our target price (still based on a 20% discount to its property RNAV) is now lower. We estimate that investors will be getting its property business at an implied discount to RNAV of 37% –among the widest in the sector. Maintain Outperform.


What Happened
FNN’s shares have commenced “ex” trading, following the proposed cash distribution of S$3.28 via capital reduction. Book closure date will take place on 24 Jul 13 at 5pm, with the expected payment date on or about 31 Jul 13.

What We Think
In our view, the decision to repay shareholders is the first of many corporate actions expected of the group. On 28 Jun 13, FNN announced that it will carry out a strategic review of the group, which may involve a break-up of the current conglomerate structure. Media reports also suggest that its controlling shareholder, Charoen Sirivadhanabhakdi, may be spinning off FNN’s hospitality assets into a REIT, along with assets under his TCC group. TCC/Thai Bev has yet to reveal its strategy for FNN. The final deadline to restore FNN’s free float to 10% or above has been extended to 31 Dec 13, and we expect TCC/Thai Bev to finalise its intentions in the next few months. Overall, we believe that there is a huge potential for the stock’s valuation gap to narrow via more corporate restructuring moves. TCC Land owns a large portfolio of investment properties in the region (e.g. the largest owner of Marriot-branded hotels in Asia Pacific). FNN, which currently has two REITs in place and over S$1.4bn worth of serviced apartments, should be TCC’s ideal property vehicle for pursuing growth. At current levels, we estimate that investors of FNN will be getting its property business at an implied RNAV discount of 37%, backed by a low FY13Fnet gearing of 12%.

What You Should Do
Maintain Outperform with more corporate actions expected to act as share price catalysts.



Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 23/07/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock