STI : 3,210.18
Price Target : 12-Month S$ 1.07
Divests NZ property business for HK$356m
China Merchants Holdings Pacific announced on Friday that it has entered into a conditional sale and purchase agreement to sell its entire New Zealand property business to sister company China Merchants Properties Development Ltd for HK$356m.
The sale is targeted for completion in 4Q13, and the Group will realise a gain of c. HK$111m on its P&L. The divestment and consideration amount (which is about 7Scts per share) is in line with our expectations and will help the Group to focus on its core toll road business, while improving its balance sheet slightly.
Next for the Group will be to look for more toll road acquisitions to grow its business.
We maintain our BUY call and DCF-based TP of S$1.07, which assumes the outstanding convertible bonds will be converted.
Publish date: 30/09/13