Planting Roots for Next Stage of Growth

Transcription

1 Planting Roots for Next Stage of Growth Financial Highlights (Y/E Dec) S$m FY13 FY14 FY15F Revenue Gross Profit Profit from Assoc EBIT Earnings EPS (S cents) Key ratios (FY15F) PER 8.2 P/ANAV 0.69 Return on Common Equity 18.1% Net Debt / ANAV 50.6% Current Ratio 2.1 Page 1 of 6

2 Kyoto, Japan Phuket, Thailand Perth, Australia Grand Mercure Roxy Singapore* Est. Completion End Existing Op. No of Rooms/Villas Land Cost per Room/Villa (S$m) Est. Construction cost per Room/Villa (S$m) N/A Land Cost (S$m) Est. Construction Cost (S$m) N/A Total Costs (S$m) Est. Rate per Room/Villa (S$) Occupancy 80% 80% 90% 91.20% Est. Annual Rev per Room/Villa (S$m) Est. Annual Total Rev (S$m) Estimated NOP Margin 20% 20% 35.0% 36.5% Expected Cap Rate 3.5% 3.5% 3.5% 3.3% Implied Valuation (S$m) * Implied Valuation per Room/Villa (S$m) Potential Revaluation Surplus N/A % Attributable to Roxy 100% 100% 49% N/A Potential Revaluation Surplus *We refer to the valuation of Grand Mercure Roxy Singapore for comparison purposes, inserting book value and fair value figures as land cost and implied valuation respectively. We assume that the hotel has a fair value of S$530m out of the total reported fair value of S$553.4m for both the hotel and office premises. 1 Roxy Resort, Chalong Bay has 85 villas. We assume each villa has about two rooms on average, for simplicity. Typically, some villas may have up to three rooms. 81 rooms (Kyoto)+85x2(Phuket)+332x49% (Perth)+576 (Singapore)=990 rooms. Page 2 of 6

3 Roxy Hotel (Kyoto, Japan) Roxy Resort, Chalong Bay (Phuket, Thailand) We estimate lower construction cost for Roxy Hotel, as the company only plans to renovate the property and reposition it as an upscale boutique hotel. The Roxy Resort shall comprise of two to three bedroom villas with private pools. Additional facilities include a spa, gym, library, bar and lounge, and etc. Not Shown: 609 Wellington Street, Perth, Australia. This project shall be a four star hotel targeted at business travellers under the Marriot Courtyard brand name. Page 3 of 6

4 Wima Infinitum Brisbane, Australia Est. GFA (sq. ft.) 698, ,271 Land Cost per GFA (S$) Construction Cost per GFA (S$) Land Costs (S$m) Est. Construction Costs (S$m) Est. ASP per sq. ft. (S$) > Est. Gross Margin 20%-40% 15%-20% Roxy's Stake 47% 40% Forecast Gross Profit to Roxy (S$m) Page 4 of 6

5 Property Development (Inclusive of share of associates) FY15F FY16F FY17F FY18F FY19F Revenue Gross Profit Other Expenses Tax Development Gains Discount Rate PV of Development Gains Total PV of Development Gains BV of Equity Risk Free Rate 2.5% Revaluation Surplus on Hotel & Shops Beta 1.0 Premium on Overseas Properties 44.1 Market RP 7.5% Value of Equity (S$m) Cost of Equity 10.0% Discount to 15% Adjusted Value of Equity Number of shares (m) Value per Share (S$) S$m FY11 FY12 FY13 FY14 FY15F FY16F FY17F FY18F Revenue Property Development Hotel Ownership Property Investment Gross Profit Share of Associates' Profit Fair Value Gains EBIT + Fair Value Gains Net Profit To Shareholders Total Current Assets Total Non-Current Assets Total Current Liabilities Total Non-Current Liabilities Total Equity Adjusted Net Asset Value (ANAV) Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Net Change in Cash Gross Margin 34.4% 39.8% 34.1% 30.6% 32.9% 27.3% 27.1% 33.4% Net Margin 27.0% 30.7% 25.0% 30.4% 20.4% 12.9% 14.6% 28.9% Return on Common Equity 25.7% 25.0% 31.6% 26.5% 18.1% 7.5% 8.5% 12.4% Return on Assets 7.4% 7.0% 8.3% 7.1% 5.7% 2.7% 3.2% 4.8% Net Debt / ANAV 45.2% 56.0% 68.2% 58.3% 50.6% 49.8% 45.6% 43.0% Current Ratio EPS (S cents) BV / Share (S cents) ANAV / Share (S cents) Page 5 of 6 PER P/BV P / ANAV Per share information has been adjusted to reflect post-bonus issue number of shares.

6 Rating Definition: Increase Exposure The current price of the stock is significantly lower than the underlying fundamental value. Readers can consider increasing their exposure in their portfolio to a higher level. Invest The current price of the stock is sufficiently lower than the underlying fundamental value of the firm. Readers can consider adding this stock to their portfolio. Fairly Valued The current price of the stock is reflective of the underlying fundamental value of the firm. Readers may not need to take actions at current price. Take Profit The current price of the stock is sufficiently higher than the underlying fundamental value of the firm. Readers can consider rebalancing their portfolio to take advantage of the profits. Reduce Exposure - The current price of the stock is significantly higher than the underlying fundamental value of the firm. Readers can consider reducing their holdings in their portfolio. IMPORTANT DISCLOSURE: As of the date of this report, the analyst and his immediate family may own or have positions in any securities mentioned herein or any securities related thereto and may from time to time add or dispose of or may be materially interested in any such securities. Portfolio structure should be the responsibility of the investor and they should take into consideration their financial position and risk profile when structuring their portfolio. Investors should seek the assistance of a qualified and licensed financial advisor to help them structure their portfolio. This research report is based on information, which we believe to be reliable. Any opinions expressed reflect our judgment at report date and are subject to change without notice. This research material is for information only. It does not have regards to the specific investment objectives, financial situation and the particular needs of any specific person who may receive or access this research material. It is not to be construed as an offer, or solicitation of an offer to sell or buy securities referred herein. The use of this material does not absolve you of your responsibility for your own investment decisions. We accept no liability for any direct or indirect loss arising from the use of this research material. We, our associates, directors and/or employees may have an interest in the securities and/or companies mentioned herein. This research material may not be reproduced, distributed or published for any purpose by anyone without our specific prior consent. Page 6 of 6