外文报告：maybank-Ho Bee Investment：Focus on Sentosa Cove in FY13？-121108

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Results Review
8 November 2012
Singapore
Co. Reg No: 198700034E
MICA (P) : 099/03/2012
Ho Bee Investment
Focus on Sentosa Cove in FY13?

Respectable third quarter. Ho Bee posted a 3Q12 PATMI of
SGD31.5m (-3% YoY; -57% QoQ), mainly on the back of profits from
Trilight and Parvis, largely in line with expectations. What stood out was
that Ho Bee managed to sell the remaining eleven units at The Orange
Grove subsequently in 4Q12. Maintain BUY.
The Orange Grove is now sold-out. Even as recent as at end-Sep,
there were eleven unsold units at the 72-unit The Orange Grove, which
had obtained its TOP in 2010. Ho Bee has since sold the remaining
units in 4Q12, which we expect to yield net profit of ~SGD14m to be
recognized in the quarter. Earnings in 4Q12 will also be underpinned by
recognition from Trilight, which obtained its TOP in October 2012.
Taking cues from Sentosa Cove. While Ho Bee has not been selling
units from its Sentosa Cove projects, there appears to be some activity
in the secondary market there. Resale transactions at the Cove have
come off a low of just three units in 1Q12 following the introduction of
the Additional Buyer’s Stamp Duty in Dec 2011 to twenty-one units
transacted in both 2Q12 and 3Q12 each, suggesting that demand there
is not completely dead. We expect Ho Bee to step up marketing efforts
to sell the remaining 104 units at Seascape in FY13.
Buzz over The Metropolis. The Metropolis, with 1 million sq ft of office
space, is expected to be completed by 2H13. There have been reports
suggesting various companies interested in taking up space there, such
as Neptune Orient Lines purportedly seeking to lease over 100,000 sq
ft, after recently agreeing to sell the NOL Building. Proctor & Gamble
had been named as potentially being the biggest tenant, possibly taking
up > 200,000 sq ft of space. On a stabilized basis, we estimate that The
Metropolis can contribute ~SGD48m in net property income per annum.
Maintain BUY. We raise our target price to SGD1.95, pegged at a 40%
discount to RNAV as we incorporate an estimated development surplus
on The Metropolis. Trading at 0.6x P/B and 0.46x P/RNAV, valuations
remain very attractive.
Ho Bee – Summary Earnings Table
FYE Dec (SGD m) 2010A 2011A 2012F 2013F 2014F
Revenue 539.0 341.5 369.3 165.9 222.1
EBITDA 359.9 203.1 152.2 101.3 113.3
Recurring Net Profit 308.4 202.5 157.9 94.5 115.6
Recurring Basic EPS (SG cents) 43.8 28.8 22.5 13.4 16.4
EPS growth (%) -8.5 -34.3 -22.0 -40.2 22.4
DPS (SG cents) 4.0 4.0 4.0 4.0 4.0
PER 3.4 5.2 6.6 11.1 9.1
EV/EBITDA (x) 4.8 7.4 9.3 14.3 9.2
Div Yield (%) 2.7 2.7 2.7 2.7 2.7
P/BV(x) 0.7 0.6 0.6 0.6 0.5
Net Gearing (%) 45.0 27.1 20.1 21.4 18.5
ROE (%) 20.9 12.3 8.9 5.1 6.0
ROA (%) 12.7 8.8 6.6 3.9 4.7
Consensus Net Profit (SGD m) 128.5 129.8 178.0
Source: Maybank KE
Buy (unchanged)

Share price: SGD1.49
Target price: SGD1.95 (from SGD1.79)


Wilson LIEW
wilsonliew@http://wendang.chazidian.com.sg
(65) 6432 1454






Stock Information
Description: A real estate development and investment
company with an extensive and diverse portfolio covering
residential, commercial and high-tech industrial projects.

Ticker: HOBEE SP
Shares Issued (m): 701.6
Market Cap (USD m): 856.1
3-mth Avg Daily Turnover (USD m): 0.8
ST Index: 3,043.3
Free float (%): 31.7

Major Shareholders: %
Ho Bee Holdings 68.3





Key Indicators
ROE (%) 8.9
Net gearing (%) 20.1
RNAV (SGD) 3.25
NAV as at Sep 2012 (SGD) 2.48
Interest cover (x) 15.0



Historical Chart


Performance:
52-week High/Low SGD1.545/SGD0.975

1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -1.7 18.7 10.4 18.3 45.4
Relative (%)
0.4 19.7 6.1 10.7 26.4
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12
HOBEE SP Equity