Monday, August 19, 2013

Amara Holdings : Stellar 2Q13 results (Phillip)

Amara Holdings
Target Price (SGD) 0.74
Closing Price (SGD) 0.570
Stellar 2Q13 results

 Company Overview
Amara Holdings Limited is a home-grown integrated lifestyle group principally engaged in three business areas, namely, hotel investment and management, property investment and development, and specialty restaurants and food services.

• Stellar performance in 2Q13; 2Q13 revenue at $17.9mn, recording a 15.1% y-y increase, 2Q13 PATMI at $2.1mn, representing a 51.6% y-y growth.
• 1H13 revenue increased 33.8% to S$42.5mn, 1H13 PATMI
increased 107.9% to S$7.1mn.
• Favorable financial performance can be mainly attributed to contributions from Property investment and Development segment; rental revenue from re-opening of 100AM in November 2012.
• Expect current levels of strong recurring income to continue. Maintain watch on oversea ventures. Buy call with fair value at $0.74

What is the news?
Favorable financial performance in 2Q13. Earnings results revealed a 2Q13 PATMI of S$2.1mn, 51.6% y-y increase, mainly attributed to higher revenue from property investment and development segment. Management has guided that there were no significant variance in revenue from the Hotel Investment and Management segment. Company continues to look towards overseas, hunting for profitable development projects, as exemplified by its April’13 signing of MOU for a potential business hotel development in Myanmar.

 How do we view this?
Promising 2Q13 financial performance is sustainable for the foreseeable future. We expect revenue growth to be supported by the newly reopened 100am retail mall. Largely in line with our forecast, 1H13 revenue formed 36.0% of FY13 estimates. While 1H13 PATMI accounts for a mere 21.2% of FY13 estimates, the traditionally stronger second half financial performance should make up for it. We remain positive as current RNAV-valuations are still cheap.

Investment Actions?
With fundamentals intact, strong recurring income is expected. Expect their hotel to weather the upcoming supply glut. Fair value at $0.74 previously. Maintain Buy.

Accumulate with fair value at $0.74
There were no major transactions or change in the company major assets. We maintain the discount to RNAV at 40%. Consequently, Fair value remained unchanged at S$0.74.

We remained positive with a recommendation to Buy. We expect the 100am to continue to boost its recurring income and the adjoining hotel (Amara Singapore) RevPar to normalize. Additionally, opportunistic overseas development provides further upside.

Source/Extract/Excerpts/来源/转贴/摘录: Phillip-Research,
Publish date: 15/08/13

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