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Investors’ Corner
Investors' Corner | 11 March 2011
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By: Ong Qiuying
Articles (131) Profile

Price – $2.91
Target – $3.73

While Bharti’s targets for Africa are not easy, we believe the top-line target does not need significant market share increase along with a number of opportunities to improve cost structure. Despite fierce competition, we expect Optus to deliver 7-10% earnings growth and benefit from VHA’s poor network performance for the next 12-18 months. We also see capital management as a catalyst for Singtel. With the its net debt/EBITDA of 0.8x, SingTel is well-positioned to execute further capital management. If it extends its net debt/EBITDA to around 1.5x or 2.0x, it would imply a cash distribution of $5-8.7b, allowing it to finance potential acquisitions. In addition, it is expected to generate a 6% dividend yield and currently trades at 23% discount to the Singapore market. Maintain OUTPERFORM. – Credit Suisse (4 Mar)

Singapore Land
Price – $7.20
Target – $10.18

Singapore Land (SingLand), through its associated company, United Venture Development, has put in the highest bid of $320m for a Government Land Sale site at Bedok Reservoir Road. The bid price appears fairly in line with market rates, coming in at a 3% premium to the next highest bidder. Based on average prices of $950-980psf for nearby projects like the Waterfront series, we project reasonable margins of 13-17% and expect the acquisition, if successful, to be earnings accretive. Nonetheless, unsold units at the Waterfront series could pose competition. We continue to like SingLand on account of an improving office market (office assets account for 76% of its GAV) and see catalysts from higher office rents. Hence, we maintain OUTPERFORM. – CIMB (4 Mar)

Noble Group
Price – $2.18
Target – $3.00

Noble Group (Noble) is raising US$400m fresh equities through a private placement. The pricing is yet to be confirmed but we estimate it will represent a 5% discount to current price. CIC will participate fully on a pro-rata basis as Noble’s significant investor. A possible reason for the equity raising is that Noble could be eyeing a significant-size merger and acquisition transaction. This might be a pre-emptive capital raising to prevent its debt to equity ratio from spiking up and reducing its investment grade credit rating. Noble emphasises that all investors who took up its equity raising have seen capital appreciation in the past five years. It had raised a total of US$250m in two primary issuances, US$600m placement to CIC and a US$250m sale of secondary shares. We retain BUY. – RBS (3 Mar)

Qiuying oversees the construction and real estate investment trusts sectors at Shares Investment.

Please click here for more information about this author.

Singtel  3.180 -- --   
Business: Asia's leading communications group. [FY19 Turnover] Mobile Comm (31.1%), Data & Internet (19.2%), Infocomm Technology (17.5%), Sale of Eqmt (16.5%), Digital Biz (7.2%), Fixed Voice (5.2%), Pay-TV (2.1%), Leasing (0.8%), others (0.4%).

Insight: May-19, FY19 operating revenue remained flat at $1... Read More

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