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(Post 1 of 1445) 09/10/1999.00:38:00 |
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OUE 1999's 1st-Half Results 5. Review of the performance of the company and its principal subsidiaries The Company's turnover declined by 6.56% from S$61.709 million to S$57.658 million mainly because of lower hotel income from Mandarin Singapore which continued to operate in a very competitive business environment. The Group's turnover decreased by 6.41% from S$76.954 million to S$72.019 million. The Company's pre-tax profit however improved 50.15% from S$12.408 million to S$18.631 million owing to cost-cutting measures implemented, lower interest expense from reduced bank borrowings, higher dividend income and reduction in government charges and taxes and lower payroll costs. With inclusion of profits from the laundry and trading businesses and lower losses from Hainan Mandarin Hotel, Haikou, PRC, the Group's pre-tax profit before share of results of associates rose by 165.31% from S$5.497 million to S$14.584 million. The Group's share of profits less losses of associates increased from S$0.129 million to S$3.526 million mainly on account of improved operating performance by OUB Centre, which also benefited from lower interest rates, government charges and taxes. 6. Commentary on current year prospects There are signs that the economic recovery in Singapore may be stronger than expected, but the outlook is still for slow growth in the tourist industry. The rental market for office and shop space remains weak and this, together with hotels' low room rates, may affect revenue growth. However, with expected low interest rates, better dividend income and effective productivity drives, the Board expects the profit performance of the Company to be better than that of last year. The Group is likely to show modest contributions from most subsidiaries and a reduced loss from Hainan Mandarin Hotel for the year. The Group's associates are expected to post improved results for the year with the recovery of the East Asian economies from recession. |
| (Post 2 of 1445) 09/10/1999.01:24:00 |
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Overseas Union Enterprise (OUE - 10Sep1999) Valued investors should simply love OUE. It is very much undervalued possibly because it is viewed as a Hotel stock only. In reality, beside its Hotel operations, OUE has a huge "banking component" and also a "property component". OUE trades at a huge discount to its underlying assets and offer good upside price potential. While waiting for its share price to perform, you also get to enjoy a reasonably good dividend yields of some 2.6% at current price level - a tag higher than current CPF & saving rates. OUE DETAILS Issued Shares : 176.32m Price at 09Sep99 : $4.56 Mkt Capitalisation : $805m OUE owns substantial Properties and Hotel interests in Spore,China,Msia and Vietnam OUE also owns some 94m shares in OUB Bank and around 3m SPH shares. The OUE group have some 5000 hotel rooms under its management in above countries. Just considering its assets located within Spore alone, it have... - 9.85% stake in OUB Bank(93.6m shares) meaning each OUE share owns 0.53 OUB share - OUB Centre (50% stake) - Overseas Union Building (100%) .....(this is the 37 storey hotel+39 storey Tower block aka Mandarin Spore along Orchard Rd) - Marina Mandarin (not sure how many %) - Overseas Union House (100%, Redevelopment potential at higher plot ratio) - Change Alley Aerial Plaza (100%) - SPH (3m shares > note:I cannot confirm whether this is still being held by OUE) At about $4.60 per share, OUE mkt cap is some $811m. It's 93m OUB shares at current market price(09Sep99 ex-bonus) already worth over $700m meaning you can "get" the rest of OUE's properties & hotel assets for only $100m. >>I dun have valuations for OUB Centre or Mandarin Orchard ....but to get an idea, here are some recent valuations of OCBC properties ......OCBC Centre=$625m, OCBC East-wing=$210m & OCBC South-wing = $80m ......Specialist Centre=$279m =====> so Mandarin Spore Hotel alone worlth much more than $100m, there is still OUB Centre etc... Looking from another angle, for each OUE share you are getting 0.53 OUB share,which at current mkt price, already worlth over $4, and all the rest of its property/hotel assets at just 60c a share. OUE is very much undervalued because most people view it only as a Hotel stock. In reality, beside its Hotel operations, OUE has a huge "banking component" and also a "property component". As can be seen from OUE financial results for past 2-years(1998 and 1997 - reference below), Though hotel operations contributed 65% (68% in 97) to turnover, hotels accounted for only 40% of profits in 1998 and 51% in 1997. while 60% of OUE profits in 1998 and 50% in 1997, are derive from properties and other investments... and this is unlikely to change soon, OUE can be assured of a $14m recurrence earnings every year - in the form of dividend incomes from its 93m OUB bank shares. OUE Financial Results for year ending 31Dec98 & 1997 ==================================================== Turnover PBIT 1998 1997 1998 1997 BY ACTIVITY S$'000 S$'000 S$'000 S$'000 Hotel 103,568 121,745 15,851 27,591 Property invest 15,238 15,636 7,844 7,224 Other invest 21,374 21,632 16,099 18,114 Others 17,660 18,608 (327) 314 Total 157,840 177,621 39,467 53,243 My Personal Views ================= For the present, with completion of OUB L+F shares merger, OUB share price look set to scale greater heights as it current trades at only 17.5x PE (FY99 prospective earnings) and 1.7x P/B ratio. And any price appreciation for OUB, is likely to see OUE tagging along. Over the longer term, if OUB bank is taken over or merges with another bank, it will throw out great values for OUE. I believe that barring a major DOW crash, we should see OUE achieving a $6 price target within a 12 months timeframe, possibly much sooner. NB:- As usual, do your research and make your own judgement... >>gains are all yours to keep, any losses are also your own responsibility only. >>I accept NO liability whatsoever for any losses arising from the use of this opinion. |
| (Post 3 of 1445) 09/10/1999.06:11:00 |
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Good research and commentary. It is a proxy to the upside potential of OUB. Now, if only OUB will fly ... |
| (Post 4 of 1445) 09/10/1999.07:33:00 |
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Thanks for the nice FA. Technically (warning: amateur) it looks quite interesting to me as well, even for a quick dance as opposed to looking for a life partner. RSI is nicely oversold, and 14 day Stochastic has just crossed upwards after dropping below the lower line. |
| (Post 5 of 1445) 10/08/1999.23:01:00 |
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OUE says considers redeveloping buildings Singapore, Oct 8 -- Overseas Union Enterprise Ltd., hotel arm of Overseas Union Bank Ltd., is considering redeveloping properties in the central business district, and hoping to raise hotel rates in Singapore by the year end, its general manager said. Properties that OUE could redevelop include the Overseas Union House, an eight-story office and car park building, and Change Alley Aerial Plaza, which has mostly shops. ``We want to maximize the economic usefulness of these buildings,'' Chong Kim Chow, director and general manager of the company, said in an interview. He added, however, ``We are giving ourselves a couple of years.'' In land-scarce Singapore, older buildings are constantly rebuilt or their use changed to obtain better yields. The redevelopment of such buildings typically incurs charges from the government. Chong said any plans to knock down and rebuild the existing complexes would need government approval, and that ``initial inquiries'' had been made. The company's stock has risen 49 percent this year. OUE, which is Singapore's second-largest hotel operator by market capitalization, runs the Mandarin Singapore in the heart of the shopping belt of Orchard Road. Chong said that room rates for the flagship hotel were likely to be raised only by the end of the year. ``The market has picked up a bit, but we are held to the rates by contractual commitments,'' he said. ``It's not a problem with occupancy but there's some problem with rates.'' Source: Bloomberg |
| (Post 6 of 1445) 10/09/1999.12:07:00 |
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A pity that Neptune restaurant has to be torn down to make way for a high rise building. It's being my showcase to my foreign friends that Singapore has such a large restaurant with no Pillars blocking the view to the stage. Must visit a few more times before it's gone forever. |
| (Post 7 of 1445) 10/11/1999.22:49:00 |
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Hi all, There's been quite a bit of selling by deemed interest in the last few days. Does anyone know what's going on? |
| (Post 8 of 1445) 10/12/1999.18:11:00 |
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Disposal of assets by Msian associates Overseas Union Gardens arising from a Capital Reduction excercise to distribute some assets back to OUB & OUT. Decision was taken back in late May1999...but supposed took some time to clear the approvals & EGMs. |
| (Post 9 of 1445) 11/18/1999.10:20:00 |
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OUE - Well trapped within $4.44 ~ $4.94 (50c range)  1. As shown, trading prices trapped within both BLUE parallel trendlines since end-Jul. 2. Stochastic currently on the high end of 80% - negative factor. 3. MAs hav been laying flat, partly could be due to erractic trading record formed on 13/10 & 11/11 - Buy, if prices closes above $4.94 (double-bottom brkout, targeting towards $5.40+ technically) Support - $4.44 ~ $4.50 (brkout towards downside) Resist - $4.92 ~ $4.94 (brkout towards upside) |
| (Post 10 of 1445) 11/18/1999.11:15:00 |
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I am hanging on to this one. If it moves to the lower end of the range, I am buying some more. I guess everyone is waiting for OUB to make its next move...the reward to OUE shareholders will be good either way:: A) If OUB takes over another bank, valuation goes higher. B) If OUB is being taken over, OUE will cash out (if there is conflict of interests). |
| (Post 11 of 1445) 11/30/1999.11:30:00 |
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Anyone knows why OUE keeps climbing in the last few days. I am fortunate to have picked mine up at between $4.44 and $4.56 a few days ago. Today it is up to $4.82. |
| (Post 12 of 1445) 11/30/1999.12:16:00 |
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Just a guess - 1 Dec CPF effects? It could be interesting to see (academic purposes) the trustee stocks' performance over the past week, up to today, to see if there could be any relationship between the 1 Dec changes & the run-up to it. Just speculating. Purely of academic interest. :) |
| (Post 13 of 1445) 11/30/1999.16:04:00 |
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Premier Zhu Rongji's staying at Mandarin Hotel ? |
| (Post 14 of 1445) 12/01/1999.09:49:00 |
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Hi Fun$ Bought into 3 lots of OUE at $3.56... |
| (Post 15 of 1445) 12/01/1999.13:50:00 |
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Oops... It should be $4.56. A lot of difference.... |
| (Post 16 of 1445) 12/23/1999.11:08:00 |
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Anyone notice OUE at $5 today ? Thanks must go to Fundollar for showing us how to fish this one. |
| (Post 17 of 1445) 12/23/1999.11:12:00 |
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Oldman, fyi me test-sell @ 5.10. Also gone!! Looks interesting again. Yes, thanks to fun$ fa. Cheers!!! |
| (Post 18 of 1445) 12/23/1999.12:59:00 |
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Fishing is a sport that need alot of patience, some time wait long long before the fish bites. Taking some profits is never wrong, but dun throw away all - WBL may give you an idea what could happen to this one too. How soon? 3 mths? 6 mths ? 2 years - I dun know. I'm queing to sell 10% at $5.45 The venerable Mr Lien Yien Chow is both Chairman & CEO of OUE, you can bet that market will react very positively towards any signs of management change. For OUE case, board members are appointed during AGM and hold office till the next AGM which usually falls in Apr/May period when reappointment are considered. |
| (Post 19 of 1445) 12/23/1999.17:54:00 |
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This one trying to play catchup with OUB. Still have some, hold tight tight. Not letting go now! Once again, thank you fun$. Cheers!!! |
| (Post 20 of 1445) 12/23/1999.18:26:00 |
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First highlighted on this forum in Sep 99 by Fun$, but how many bought? Thanks Fun$, and enjoy your profits. Sweet gains. |
| (Post 21 of 1445) 12/23/1999.22:25:00 |
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Congratulations fun$. A real "Stock Holmes" on OUE. |
| (Post 22 of 1445) 12/24/1999.09:01:00 |
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Thks! oldman, mc, skysobig, moneytree and others for all the encouragement. In perspective, at $5.40 closing yesterday(hope it is not just window-dressing), OUE had only risen a "miserable 17%" from the $4.60 level back in Sep99. For many, this is far too slow tortise esp. during such times when things jump in leaps and bounces. Like many others, I too wished that this tortise will put on a pair of turbo-rollerskates:- but this is unlikely to happen UNTIL OUB-bank get taken over/or involved in a merger with another bank, let hope this will happen soon in the new year. In event that OUB bank get involved in such a situation, some possible scenarios:- i) OUE get to either cash in on its 93m OUB shares OR swap for new shares in the enlarged-merge-bank (like the ICS situation.) OR ii) swap its 93m OUB shares in return for more of assets (eg. properties or hotels) OR iii) (top on my wish list) OUE sell a)all its hotel/properties interests to others(eg. CDL Hotels) and b) sell its 93m OUB shares for cash and c) sell its listed status and d) RETURN all the proceeds to shareholders :- wow at least $9-$10. So for all of us together on this "OUE" fishing expedition...let hope there's much more good cheers to come and come SOON. |
| (Post 23 of 1445) 12/24/1999.09:36:00 |
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Fun$, Thanks again for your postings on OUE. I went into it as well. Conducted some research of my own AFTER I bought (which I don't recommend), I went to ask friends of mine working inside the Bank (recently retired) how FOR or AGAINST is venerable Mr Lien open to change. Apparently he's AGAINST changes. Lee Hee Seng is EVEN more resistant to mergers or any change to the status quo. It's riveting how this saga is going to be played out. Obviously, the agent of agent comes in the form of BG Lee (For the record, I like what he's doing to the finance industry). Let's hope we will see some changes in the not too distant future. |
| (Post 24 of 1445) 12/24/1999.10:52:00 |
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IT is not surprising at all that Mr Lien is against any changes, and most people are likely to expect little or no changes so long as he is around. I can imagine him exclaiming "I'm almost a century old, dun shake my CHAIR !!" and even Premier Chu shorten his "Spore Lecture" speech out of deference to him. So going forward, and more important will be the positions of Mr Lien's childrens or other beneficiaries...sometime, somewhere further into the future. I always wonder why Peter find himself another preoccupation at SemCorp, and why both OCBC & OUB are so slow at consolidating their operations, their other listed subsidiaries(eg. finances+Insurance arms) or acquiring other banking interests - so unlike DBS & UOB, infact they are now one-year behind DBS & UOB in this aspect >>> so I wonder and wonder...unless ofcourse both are too busy attending to other much bigger & more important thing right now - but what is that ??? |
| (Post 25 of 1445) 12/24/1999.11:58:00 |
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Lee *hehehe* right on! Yes, none of his kids are his left or right hand, BUT his relatives a few good many other Lien's are aiding ... Alfred Lien shld be in his 50's now, was put in Sonny's place when father n son fell out. Apparently, Sonny sold his Master's Laundry biz which is slated to be his share in elder Lien's assets and that was final. (no more strings attached). I wonder how's Sonny fairing now and in Vietnam? Gee, his wife is French you know. Lesson learnt, Blood not nbecessary thicker than water, when it comes to money, woman/man , and whatelse? *hMmm* |
| (Post 26 of 1445) 12/24/1999.14:42:00 |
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1st HIT !! |
| (Post 27 of 1445) 01/02/2000.12:22:00 |
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Folks, As many of you would have read or heard by now, market talk has it that OUB is to merge with OCBC, but there has still been no comment from either company. Although unsubstantiated, if it is true then OUE could be expected to liquidate its holdings in the new merged entity. That would throw up a HUGE surplus in its favour, and a significant rerateing expected alongside the banks. |
| (Post 28 of 1445) 02/06/2000.11:42:00 |
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ING Barings 28-1-00: Here’s another value investing idea to think about. Look at the volume chart in OUB (S$9.30). The average daily turnover for the last three months is 2.2m shares per day. Yesterday it traded 7.8m shares and they day before that 5.6m. Someone has been buying a lot of it in the past three days. If there really is any truth to ongoing market expectations, as discussed in a Reuters article today, that this bank and OCBC (S$14.90) are about to merge in some fashion, OUE (S$5.00) could benefit. None of these companies have commented on this subject. The mentality of any banking family is to have control. But once they are just minority shareholders, that control is gone (at least in most countries ...let’s not talk about Indonesia). So OUE would have two choices. It could hand the portfolio to the youngest of the board members (who is fifty-something) to run. Or they could just sell out of OUB and take the cash. Either way the shares would be likely to go up. Its assets are worth more than twice its share price. It has a 9.9% stake in OUB, which at current levels is worth S$5 per OUE share, which is what OUE is currently trading at. At an stimated NAV of S$11.7 for OUE, it looks like there is still another S$6.7 of value left in the share price. Granted, most of that is property and therefore not so liquid. But with the government having said that cross-holdings between banks and property companies is not the best thing, a merger of the two banks could be the first step in 'the big picture' streamlining effort for Singapore Inc, that most investors had written off as a fairy tale. |
| (Post 29 of 1445) 03/16/2000.02:59:00 |
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OUE - Weekly Candlesticks As of Last Week. (Note : Failure to hold onto $4.42 this week would confirm a Double-Top Formation}  |
| (Post 30 of 1445) 03/16/2000.06:09:00 |
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Overseas Union Enterprise unit buys 75 pct stake in e-magination.com Overseas Union Enterprise Ltd said its wholly-owned subsdiary OUE Trading Pte Ltd has acquired a 75 pct stake in e-magination.com Pte Ltd for 225,000 sgd. In a statement, the company said e-magination.com is a joint-venture between OUE Trading and int.ent.net Pte Ltd. It is an e-communications company that provides consultancy, e-branding, e-marketing services and products. |
| (Post 31 of 1445) 03/16/2000.06:14:00 |
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Overseas Union Enterprise 1999 net profit 34.248 mln sgd vs loss 21.458 mln Overseas Union Enterprise Ltd 1999 results: Net profit - 34.248 mln sgd vs loss 21.458 mln Sales - 150.687 mln sgd vs 156.315 mln Pretax profit - 51.239 mln sgd vs loss 4.521 mln EPS - 19.42 cents vs loss per share 13.68 Final div - 6.0 cents; unchanged The company said it expects the group's performance to improve this year, supported by better occupancy rates at the Mandarin Singapore and reduced losses from the Hainan Mandarin. |
| (Post 32 of 1445) 05/31/2000.18:24:00 |
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A news report in the evening reported OUE has been closing higher last few sessions near the close while on most days it was down. source  J A valuation exercise of sort may happen soon following this type of development according to dealers familiar with price analysis. Any forumers have a favourable view of this being possible, and any impact to its price tomolo. Appreciate comment.regrds |
| (Post 33 of 1445) 06/21/2000.22:40:00 |
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oub 'forced' to 'let go' oue, is that possible? |
| (Post 34 of 1445) 08/11/2000.02:43:00 |
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Overseas Union Enterprises H1 net profit 13.911 mln sgd vs 10.822 SINGAPORE (AFX-ASIA) - Overseas Union Enterprises Ltd six months to June results: Net profit - 13.911 mln sgd vs 10.822 mln Revenue - 80.102 mln sgd vs 72.019 mln EPS - 7.89 cents vs 6.14 Interim div - 6 cents vs 6 In a report, OUE said earnings were lifted by higher dividend income and improved revenue from its hotel operations. OUE closed down 0.04 at 4.70 sgd on volume of 104,000 shares. |
| (Post 35 of 1445) 08/17/2000.20:55:00 |
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Fun$. here she comes. Following OUB from behind. Still holding some. What brewing ? Anybody.... |
| (Post 36 of 1445) 08/20/2000.09:41:00 |
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Fraser recommended OUE as a buy I believe...each OUE share is worth about S$ 4.40 cash if you just look at their 9.4% holding in OUB....in my view OUE is worth S$9.50 on break-up basis but fair value at S$8 if it exits all its non-core holdings such as OUB , OUB Centre & other commercial properties & concentrate on hotels...but I know this is a fat hope as these conglomerates believe in cross-holdings to keep predators at bay and retain vice-like grip on their companies ...they don't believe in delivering value to share-holders....only because of MAS they will be forced to get out of non-core holdings ; so long-term holders & minorities have to thank MAS for releasing value to us...have vested interest in OUE for more than a year....interestingly most trades are taking place on the OFFER side....someone is certainly accumulating the stock.....be patient ; returns will come after 6-7 months |
| (Post 37 of 1445) 08/23/2000.01:45:00 |
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CESSATION OF INTEREST IN DENTSU MANDATE SINGAPORE PTE LTD Pursuant to Clause 904(2)(c) of the Listing Manual of The Singapore Exchange Limited, Overseas Union Enterprise Limited (the "Company") wishes to announce that its wholly-owned subsidiary, Mandate Advertising International Pte Ltd, has on 17 August 2000 entered into an agreement to dispose of its entire 35% shareholding in Dentsu Mandate Singapore Pte Ltd to Dentsu Inc. In accordance with the agreement, the transfer of the 35% shareholding will be effected and completed on 1 September 2000. With this disposal, Dentsu Mandate Singapore Pte Ltd will cease to be an associated company of the Company with effect from 1 September 2000. Neither the Directors of the Company nor its substantial shareholders have an interest in this transaction. The disposal will not have any material impact on the Company's net tangible asset value and earnings per share for the financial year ending 31 December 2000. Submitted by Foo Joon Kim, Company Secretary on 22/08/2000 to the SGX |
| (Post 38 of 1445) 08/24/2000.02:58:00 |
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ANNOUNCEMENT ON ACQUISITION OF SHARES Overseas Union Enterprise Limited wishes to announce that its wholly-owned subsidiary, Singapore Meritus International Hotels Pte Ltd, has subscribed for and been allotted 49 per cent of the shareholdings each in the following companies which were incorporated in Thailand on 6 July 2000: 1. Meritus Hospitality Services (Thailand) Co., Ltd; and 2. SMI Services (Thailand) Co., Ltd. The registered capital of each of the afore-mentioned companies is 40,000 Baht, consisting of 8,000 shares of 5 Baht each. The total issued and paid-up capital of each of the companies is 10,000 Baht consisting of 8,000 shares with a paid-up value of 1.25 Baht each. Submitted by Foo Joon Kim, Company Secretary on 23/08/2000 to the SGX |
| (Post 39 of 1445) 08/30/2000.10:25:00 |
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OUB is seeking a foreign bank as a minority shareholder as the city opens the industry up to greater competition, bankers familiar with its plans said. The bank hired J.P. Morgan & Co. to help with the search, said the bankers, who asked not to be identified. Chong Wee Lian, a spokesman for Overseas Union Bank, declined to comment. Philip Lee, J.P. Morgan's head of Singapore investment banking, also declined comment.” This is interesting. OUB was thought to be too small to survive in the impending rationalisation of the Singapore banking industry. It was thought to merge with someone else. Well, there’s no reason they couldn’t do that and also team up with a foreign bank. But this doesn’t exactly sound like ‘teaming up’ with a foreign bank. What good is a minority share? What you really want to see is a foreign bank with deep pockets and pioneering technology come in as people who DO STUFF. Minority shareholders are seldom the kind of participants who bring STUFF to the table. They are passive usually, which is just the way the bigger shareholders and management like them to be. Given the three-year deadline for divestment in non-banking assets, the only good news in this is (maybe) for OUE, the Lien family’s primary holding vehicle that owns 9.37% of OUB (conversely, OUB owns 24.3% of OUE). There is logic in this in the sense that it kills two birds with one stone. They can get the foreign partner in to strengthen their side when an eventual merger with another Singapore bank occurs. And they can get J.P. Morgan to sell the hotel and property assets that OUE holds to a third party, while the holding in OUB goes to the strategic foreign partner. If indeed such a breed of animal exists that would want to do this. After all, what can OUB really offer to a foreign bank. Sure Singapore is a lucrative little place, but if you’re just a shareholder, so what? And how can you use that as a springboard into the other Asian markets? Source: Ing Barings |
| (Post 40 of 1445) 09/01/2000.17:17:00 |
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OUE's unit Meritus is appointed by Thailand's Challenge Group to manage a deluxe service appartment complex in central Bangkok, reported a newswire. The 573-unit Meritus RCK residence will be the first Thai property managed by the group and will be added to properties in Singapore, Malaysia, Vietnam and China. |
| (Post 41 of 1445) 09/04/2000.11:38:00 |
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OUE has a reason to break out to S$7.50 in future: On Aug 29, when discussing the revival of speculative interest in OUB taking in a foreign partner, we said the possibility of OUE selling its 93m OUB shares or 9.3% stake will focus market attention on the value of OUE’s investment in OUB and other investments, equities and properties. OUE’s 93m shares in OUB alone are worth about S$800m or S$4.58 a share. We said then the OUB stake together with other investments were worth S$8.56 per OUE share. In the light of such future interest, we have subsequently reviewed our valuation and updated the valuation for certain investments e.g. OUB Centre, from S$1,200psf to S$1,500psf. Valuing its equities investments at the latest market value and its property and hotel investments at current market value would give the stock a theoretical value of S$9.30 a share. However, a more appropriate approach would be to value the equities at market but the investment properties at a typical 40% discount to market value. That would give us a more credible RNAV of S$7.51 a share. We have had a "sell" recommendation on OUE since 23 October 1997 (S$5). The stock has since fallen with the 1997-98 crisis to a low of S$1.75 and recovered to a recent high of S$5.80. Recent focus on official guidelines requiring banks to unwind their cross-holdings and sell down their non-bank interests have helped lift the stock from about S$4 to about S$5. The probable future sale of its OUB shares will likely send the shares up to about S$7.50, way above its 1999-2000 range of S$4.00-5.60. Even if it does reach that target, we do not expect the stock to hold its value at that level - unless the company introduces a new approach to its hotel and property investment business to ensure sustainable long-term growth. Operating profits from its hotel and property business have not grown for several years, moving up and down between S$30m and S$40m through the 1990s. Earnings have recovered since 1998 but not expected to be significantly better than 1995-96’s peak of S$37m. Against this background, we would like to revise our recommendation but only to a "hold", to allow for an opportunistic trading buy. Research from Sassy (Sassoon) |
| (Post 42 of 1445) 09/21/2000.04:22:23 |
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UNAUDITED NET TANGIBLE ASSET
The Board of Directors of Overseas Union Securities Limited is pleased to announce that the Group's unaudited net tangible asset backing per S$1.00 share as at 31 August 2000 was S$2.84. BY ORDER OF THE BOARD JEANNIE TNG SECRETARY SINGAPORE, 20 SEPTEMBER 2000 Submitted by Mrs Jeannie Tng, Secretary on 20/09/2000 to the SGX |
| (Post 43 of 1445) 10/05/2000.10:49:39 |
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According to the papers, OUE is expected to embark on its
redevelopment of Overseas Union House (OUH) and the Change Alley aerial plaza soon. Our check with management revealed that the group has stopped taking leases at OUH in excess of 2 years. This seems to suggest that a redevelopment of the complex could occur within the next 2 years. Separately, we also hear that plans may be submitted to the authorities within the next 9 months. - The redevelopment of OUH (together with Change Alley) is expected to yield a commercial complex with 840,000 sf net lettable area. A figure of $800m has been cited as the total cost of the project. We estimate the construction cost to be $300m, development charge and financing cost another $300m and land cost $200m. - With commencement of redevelopment in 2 years' time, we expect completion in 2004 / 2005. - Our current RNAV is estimated at $10.44, but we believe there is scope for upward revision to $11.00-12.00 given a more generous assumption of capital values for the office sector. - The stock offers a good 2-year bet not just on the rising capital values for the office sector, but also the bank's mandatory divestment of non-core financial assets. We see potential to reap 40% annualised returns for this investment. Maintain rating as Outperform. GK Goh |
| (Post 44 of 1445) 10/05/2000.15:15:04 |
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Research reproduced with permission from GK Goh
OUE -- A Potential Good Bet 05/10/00, 10:00 am by Cheong Kwok Mun According to the papers, OUE is expected to embark on the redevelopment of Overseas Union House (OUH) and the Change Alley aerial plaza soon. Our check with management revealed that the group has stopped taking leases at OUH in excess of two years. This seems to suggest that a redevelopment of the complex could occur within the next two years. Separately, we also hear that plans may be submitted to the authorities within the next nine months. The redevelopment of OUH (together with Change Alley) is expected to yield a commercial complex with 840,000 sf net lettable area. A figure of S$800m has been cited as the total cost of the project. We estimate the construction cost to be S$300m, development charge and financing cost another S$300m and land cost S$200m. With commencement of redevelopment in two years’ time, we expect completion in 2004/2005. Our current RNAV is estimated at S$10.44, but we believe there is scope for upward revision to S$11.00-12.00, given a more generous assumption of capital values for the office sector. The stock offers a good two-year bet not just on the rising capital values for the office sector, but also the bank’s mandatory divestment of non-core financial assets. We see potential to reap 40% annualised returns for this investment. Maintain rating as OUTPERFORM.
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