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Ezrareceives SGX HNAGroup's


statutory mandates S$1.4boffer
demandfor minimum forCWTmay
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Brokers'take
Wednesday, April 12, 2017 - 05:50

Cache Logistics Trust | Sell


Target price: S$0.71
April 11 close: S$0.875
CIMB, April 10

WHAT are the possible implications with the impending takeover of CWT? HNA Holding Group has oered to buy CWT for S$1.4 billion or
S$2.33 per share, representing about 13 per cent premium over the stock's last trading price on April 5. CWT prides itself as Singapore's
largest homegrown logistics provider.

It is also the sponsor of Cache Logistics Trust. For Cache, CWT and ARA Asset Management own 40 per cent and 60 per cent of the Reit
manager respectively; and 60 per cent and 40 per cent of the property manager respectively.

We expect it to be business as usual for Cache, unless there is a major restructuring at CWT level. HNA said that it intends to keep CWT's
management team. In addition, the Rights of First Refusal (ROFR) pipeline remains intact.

Now that uncertainty over the future of CWT has lifted, we expect asset injections to accelerate. We believe HNA would undertake capital
recycling. We also postulate that HNA could inject its assets into the Cache platform.

SEE ALSO: HNA Group's S$1.4b oer for CWT may transcend logistics

Pending release of Q1FY17 results on April 20, we maintain our recommendation, target price and forecasts. Bottoms up, nothing
fundamentally has changed; topdown, we remain cautious on the logistics sector in the near-term due to strong completions in 2017.

Amara Holdings | Buy


Target price: S$0.88
April 11 close: S$0.54
RHB, April 11

WE initiate coverage on Amara. Its new 343-room hotel in Shanghai is expected to start operating in Q3 2017, and we see it as a key
catalyst for a potential share price re-rating. The potential revenue enhancement could be in excess of S$20 million, which is more than
24 per cent of its FY16 revenue.

Amara trades at a P/RNAV of 0.38x, ie lower than peers' P/BV average multiple of 0.8x. In May or June, shareholders stand to receive nal
and special dividends totalling three Singapore cents, which implies a dividend yield of about 6 per cent.

There could be some initial losses from the hotel operations, but management expects the retail and oce parts to be protable from
the start. We expect signicant contributions to Amara's earnings by FY18. The group's balance sheet reects only the cost of the hotels.
There are several signicant valuation upsides for Amara Singapore, Amara Sanctuary Resort Sentosa and Amara Signature Shanghai.

Compiled by Melissa Tan

Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on
the information published and should seek independent nancial advice prior to making any investment decision. The publisher accepts no
liability for any loss whatsoever arising from any use of the information published herein.

Brokers who wish to send in their reports can email us at btnews@sph.com.sg

CACHE LOGISTICS TRUST AMARA HOLDINGS CWT LIMITED

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