Monday, September 16, 2013

FIRST REIT : UPGRADE TO BUY ON VALUATION GROUNDS (OCBC)

FIRST REIT
Fair value S$1.20
add: 12m dividend forecast S$0.079
versus: Current price S$1.035

UPGRADE TO BUY ON VALUATION GROUNDS
• Hospitals well-equipped
• FY14F distribution yield of 8.3%
• Value has re-emerged

Indonesian properties visit
We visited five of First REIT’s (FREIT) properties (four hospitals and one hotel and country club) in Indonesia over a two-day period last week. This included its Siloam Hospitals TB Simatupang (SHTS), which is located in South Jakarta and acquired by
FREIT only in May this year. The hospitals are operated by Siloam International Hospitals (subsidiary of Lippo Karawaci) and are generally well-maintained and equipped with modern medical equipment from international brands such as Siemens and Philips. For example, SHTS, Siloam Hospitals Lippo Village (SHLV) and Mochtar Riady Comprehensive Cancer Centre (MRCCC) all offer the 3-tesla magnetic resonance imaging (MRI) machines, which we consider as advanced in today’s medical field.

Floating rate exposure reduced following refinancing exercise
FREIT announced on 28 Aug 2013 that it had successfully refinanced S$92m of its floating rate debt to a 4-year fixed-rate secured Transferable Term Loan Facility (all-in cost of borrowing of ~3.7%). We estimate that this would lower FREIT’s floating rate exposure from 72% to 46% of its total debt. Following this successful refinancing exercise, FREIT’s next refinancing need will only come in 2016.

Share price correction overdone; upgrade to BUY
Concerns over Indonesia’s easing economic growth, high inflation and sharp depreciation in the IDR have adversely impacted stocks with large exposure to Indonesia, such as FREIT. Coupled with QE tapering fears, FREIT’s share price has dipped 28% since mid-May this year. However, FREIT has minimal exposure to the IDR volatility, in our view. This is because the base rental for its Indonesian properties is denominated in SGD, while the variable rental component is pegged to a fixed SGD/IDR rate throughout the entire lease tenure. We had also previously taken into account the spike in the Singapore government 10-year bond yield in our risk-free rate assumption (2.6% used in our model). We believe that the correction in FREIT’s share price is overdone. Hence we upgrade FREIT from Hold to BUY on valuation grounds, with an unchanged fair value estimate of S$1.20. FREIT also offers an attractive forecasted distribution yield of 7.6% in FY13 and 8.3% in FY14.

Strong IPO debut for Siloam International Hospitals
Siloam International Hospitals made its trading debut on the IDX on 12 Sep 2013, raking in an impressive 7.2% increase in its share price from its IPO price of IDR9,000. Its share price rose another 4.2% the following day. Lippo Karawaci still retains ~86.5% control of Siloam International Hospitals after the IPO. According to Siloam International Hospitals’ IPO prospectus, its total revenue grew 22.2% and 42.0% to IDR1.26t and IDR1.79t in 2011 and 2012, respectively (includes hospitals which are not owned by FREIT but could be potential
acquisition targets in the future). A significant proportion of the proceeds raised from its IPO would be used for the development and acquisition of new hospitals. Hence we believe this will provide FREIT with a strong pipeline of possible acquisition targets in the future. We expect FREIT to remain as an important vehicle for Lippo Karawaci to implement its asset-light strategy via a sale and leaseback business model.




Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 16/09/13

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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
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