Dawn Of a New Era
GLL is embarking on a hotel-operator model that will see it expanding to 100 major cities by 2023. Its hotel division CEO, Michael DeNoma, has an impressive record for value-creation in his previous appointments, and we are positive on his execution capability. We reduce our holding company discount from 30% to 20%.
Maintain BUY, with a higher TP of SGD1.43.
New broosweepm s clean. Since Michael DeNoma came on board as CEO of GLL’s hotel operations about two years ago, the group has embarked on an overhaul of its business model, retrofitting its flagship hotels to revitalise earnings while introducing new brands to serve niche segments more effectively. Underpinning the overall strategy is a vision to become a global hotel operator with a presence in 100 major cities by 2023.
Capable CEO whose interest is aligned with shareholders’. Mr DeNoma has a sound record in creating value in his previous capacity as CEO of Standard Chartered Global Consumer Bank. With his experience in brand-building coupled with GLL’s portfolio of prime hotel properties, the shift towards an asset-light hotel management model will enhance returns on capital as well as catalyse the stock’s re-rating. Notably, the interests of Mr DeNoma and his top managers – who have received up to 33m share options exercisable at SGD0.86 each - are aligned, and there is now incentive to move the options deep into the money.
Earnings on an upswing. London’s hospitality market is poised for strong gains in 2014-15, with revpar (revenue per available room) projected to grow 4-5% over 2014-15 as hoteliers regain pricing power, spurred by rising corporate demand. As one of the largest hotel operators in London, we expect GLL to benefit from the upswing. While retrofitting cost will weigh on earnings in the current year, this will be offset by interest savings from expiring high-cost mortgage bonds.
Maintain BUY, with higher TP of SGD1.43. We are reducing our holding company discount from 30% to 20% as the group makes the transition to an earnings-driven model. GLL has defined hospitality as its core business, while its non-core assets such as its Molokai property or Bass Straits Royalty may be divested at the right price, with the potential proceeds re-invested in its hospitality business
Source: DMG Research
Monday, March 10, 2014
Wednesday, March 5, 2014
Singapore Stock Picks: Centurion Corp: SGD0.62 BUY (TP: SGD0.82)
More Sterling Growth Ahead
CENT’s 4Q13 core PATMI of SGD5.6m (+26.3% y-o-y), made on the back of SGD17.6m in revenue (+1% y-o-y), was in line. Its outlook remains positive, as total beds are expected to increase 60% to 54k which leads to a 32% core earnings CAGR in FY13-16. Expect further upside from new acquisitions of student accommodations in the UK and Australia. Maintain BUY, with a DCF-based TP of SGD0.82.
Drastic shortage of supply leads to 43% growth in accommodation business. Within Singapore’s workers accommodation business, an additional 50k-60k beds are expected to be delivered by the end of this year. This will increase the total supply of dormitory beds to 200k-210k, which falls well short of the demand created by the 500k work permit holders in Singapore. The evident shortage of supply will continue to put upward pressure on rental rates and occupancy levels coupled with CENT’s rapid expansion plans, we can expect the company to see strong growth from FY13 to FY16.
Gross and net margins continue to improve. All in all, we expect CENT’s gross and net margins to continue to improve. It grew 4% and 5% to 52% and 28% respectively in FY13 due to the: i) increase in contributions from its accommodation business, and ii) a 30% decrease in contribution from the optical business. We expect optical disc’s contribution to continue declining at a 30% rate annually, and the unit to cease operations by the end of 2015 - which would improve its margins as the optical business has been a drag on their earnings and margins.
Dividend increases 50% y-o-y to SGD0.006. Due to the company’s strong performance in FY13, management has declared a dividend of SGD0.006, up 50% from FY12. However, its dividend payout will remain low as the company is on an aggressive expansion plan.
Diversifying further into student accommodation business. After the acquisition of RMIT village, we expect management to further diversify into the student accommodation business by making acquisitions focused in Australia and London. For this segment, 2014 will be an exciting year of expansion
Source: RHB Research
CENT’s 4Q13 core PATMI of SGD5.6m (+26.3% y-o-y), made on the back of SGD17.6m in revenue (+1% y-o-y), was in line. Its outlook remains positive, as total beds are expected to increase 60% to 54k which leads to a 32% core earnings CAGR in FY13-16. Expect further upside from new acquisitions of student accommodations in the UK and Australia. Maintain BUY, with a DCF-based TP of SGD0.82.
Drastic shortage of supply leads to 43% growth in accommodation business. Within Singapore’s workers accommodation business, an additional 50k-60k beds are expected to be delivered by the end of this year. This will increase the total supply of dormitory beds to 200k-210k, which falls well short of the demand created by the 500k work permit holders in Singapore. The evident shortage of supply will continue to put upward pressure on rental rates and occupancy levels coupled with CENT’s rapid expansion plans, we can expect the company to see strong growth from FY13 to FY16.
Gross and net margins continue to improve. All in all, we expect CENT’s gross and net margins to continue to improve. It grew 4% and 5% to 52% and 28% respectively in FY13 due to the: i) increase in contributions from its accommodation business, and ii) a 30% decrease in contribution from the optical business. We expect optical disc’s contribution to continue declining at a 30% rate annually, and the unit to cease operations by the end of 2015 - which would improve its margins as the optical business has been a drag on their earnings and margins.
Dividend increases 50% y-o-y to SGD0.006. Due to the company’s strong performance in FY13, management has declared a dividend of SGD0.006, up 50% from FY12. However, its dividend payout will remain low as the company is on an aggressive expansion plan.
Diversifying further into student accommodation business. After the acquisition of RMIT village, we expect management to further diversify into the student accommodation business by making acquisitions focused in Australia and London. For this segment, 2014 will be an exciting year of expansion
Source: RHB Research
Singapore Stock Picks: Kingsmen Creatives: SGD0.95 BUY (TP: SGD1.10)
KMEN’s 4Q13 PATAMI rose 23.1% y-o-y to SGD7.6m on the back of a 8.2% y-o-y revenue growth, as it completed some projects during the quarter. The company’s outlook remains healthy, supported by the pipeline of MICE events and theme park launches across the region - although growth may be limited by its ability to take on more projects. Maintain BUY with a SGD1.10 TP, based on a 8x FY13F P/E (ex-cash).
Expect a better year ahead. Kingsmen Creatives (KMEN) has a healthy current orderbook of SGD138m (vs SGD81m a year ago), of which SGD117m is expected to be recognised in FY14. KMEN typically continually secures interior fit-out contracts throughout the year. That, coupled with the planned developments in the region (ie new malls and theme parks), indicates revenue and PATAMI are likely to continue to grow. On top of that, KMEN’s strong balance sheet (net cash of SGD59.2m as of end-FY13) puts it in a good position to bid for upcoming projects.
Regional developments a boon for KMEN. The pipeline of theme parks and shopping malls across Asia would be beneficial for KMEN. Closer to home, the Government’s plans for Changi Airport’s Project Jewel (a new mixed-use complex) is likely to benefit KMEN. International luxury brands are still expanding into Asia and into new markets, eg travel retail (in order to establish a retail presence in airports). As airports are being refurbished and new terminals built, such developments would provide more opportunities for the company. Other developments that could be positive for the company include the pickup of meetings, incentives, conferences and exhibitions (MICE) events as well as the pipeline of theme park launches in Asia.
Opportunities to enhance portfolio. There are several exciting theme parks expected to be launched over the next few years, which would benefit KMEN. Given the size of its operations, KMEN successfully securing some parcels of work in each theme park project – which is likely, given its track record - would enhance its portfolio. As such, we remain positive on its outlook for growth. Maintain BUY with a TP of SGD1.10.
Source: RHB Research
Expect a better year ahead. Kingsmen Creatives (KMEN) has a healthy current orderbook of SGD138m (vs SGD81m a year ago), of which SGD117m is expected to be recognised in FY14. KMEN typically continually secures interior fit-out contracts throughout the year. That, coupled with the planned developments in the region (ie new malls and theme parks), indicates revenue and PATAMI are likely to continue to grow. On top of that, KMEN’s strong balance sheet (net cash of SGD59.2m as of end-FY13) puts it in a good position to bid for upcoming projects.
Regional developments a boon for KMEN. The pipeline of theme parks and shopping malls across Asia would be beneficial for KMEN. Closer to home, the Government’s plans for Changi Airport’s Project Jewel (a new mixed-use complex) is likely to benefit KMEN. International luxury brands are still expanding into Asia and into new markets, eg travel retail (in order to establish a retail presence in airports). As airports are being refurbished and new terminals built, such developments would provide more opportunities for the company. Other developments that could be positive for the company include the pickup of meetings, incentives, conferences and exhibitions (MICE) events as well as the pipeline of theme park launches in Asia.
Opportunities to enhance portfolio. There are several exciting theme parks expected to be launched over the next few years, which would benefit KMEN. Given the size of its operations, KMEN successfully securing some parcels of work in each theme park project – which is likely, given its track record - would enhance its portfolio. As such, we remain positive on its outlook for growth. Maintain BUY with a TP of SGD1.10.
Source: RHB Research
Sunday, February 23, 2014
Malaysia CPO Intra Day Trading Signals for February 20, 2014. Gross Profit of RM925 today!!
Dear readers, Long Signal detected. Enter at 2717 and Profit target hit at 2754.
That is whooping RM925 gross profit
The published results are delayed. If you would like real time signal please drop me a whatsapp message "Subscribe 3CPO". Trial is only for 1 week to test.
Malaysia CPO Intra Day Trading Signals for February 19, 2014
Dear readers, Short Signal detected. Enter at 2717 and Profit target hit at 2705
. The published results are delayed. If you would like real time signal please drop me a whatsapp message "Subscribe 3CPO". Trial is only for 1 week to test
Thursday, February 13, 2014
High Growth stocks Selection for EPF Account 1- Asset Management
Dear readers,
Below are my stock picks for interested readers who are keen to withdraw from their Account 1 and to utilized it to invest in high growth Malaysian Stocks via my asset management services.
These stocks has been selected based on their fundamental criteria. Minimum capital size is RM10K. In this particular example I am using a RM100K portfolio size to be spread out evenly across the stocks and rebalance it on a quarterly basis.
Here are my stock picks and the date stamp of my entry quantity and price.
Monday, February 10, 2014
US Undervalue Stock Picks for Jan 2014
Dear readers, This is my stocks pick for the US Market based on Benjamin Graham screening criteria. Typical holding period for this stocks is 6 months to 1 year. Portfolio is rebalanced every quarter.
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HIGH PROBABILITY STOCK SCREENER
