Background: One of the oldest companies in Singapore (founded since 1821), Guthrie GTS Limited is a mini conglomerate engaged in property, investments, engineering and leisure businesses. It owns a 50% stake in Jurong Point I and II, estimated to be worth close to $1.2b, and some office and retail units at The Adelphi.
Recent developments: Guthrie entered into a framework agreement with Asia Retail Mall Limited (ARML) on 10 October 2011 to monetise its investment gains in ARML I, II and ARMF II Tampines for $124.4m in cash and convert ARML into a perpetual corporate fund vehicle, known as Pramerica AsiaRetail Limited. It has received shares worth $30.8m, representing a 1.9% stake in Pramerica AsiaRetail.
Our view
Minimal involvement. Pramerica AsiaRetail will be managed by Pramerica Real Estate Investors. Its initial portfolio of assets will consist of six suburban retail malls (with a connected office tower) in Singapore, namely, Tiong Bahru Plaza, Century Square Shopping Centre, Hougang Mall, White Sands Shopping Centre, Tampines 1, Liang Court and Central Plaza, as well as four suburban retail malls in Malaysia. Guthrie’s involvement in the management of these malls is through an existing mall management company, AsiaMalls Management Pte Ltd.
Opportunistic player. Together with joint-venture partner Lee Kim Tah Holdings, Guthrie still owns Jurong Point I and II whose value has yet to be unlocked. It is currently developing a commercial property near the Paya Lebar MRT station in conjunction with Low Keng Huat and Sun Venture Commercial. On the residential property front, it is developing an 806-unit public housing project in Yishun, called Adora Green, under the Design, Build and Sell Scheme. Guthrie appeared opportunistic in its recent ventures and was quick to lock in gains in the case of the sale of strata office units at The Adelphi.
Return cash to shareholders? Guthrie made fair value gains of $125.7m in 1H11 and will likely book $124.4m (11.5 cents per share) in realised gains for the divestment of investments in ARML, II and ARMF II in 2H11. A potential catalyst is the return of cash to shareholders, though the return of all cash gains is unlikely due to its current development commitments.
Key ratios…
Price-to-earnings: 4.2x
Price-to-NTA: 0.6x
Dividend per share / yield: $0.025 / 5.5%
Net (cash)/debt per share: $0.44
Net gearing: 0.6x
Share price S$0.45
Issued shares (m) 1,077.9
Market cap (S$m) 485.1
Free float (%) 29.6
Recent fundraising Nil
Financial YE 31 December
Major shareholders Anthoni Salim and Putra Masagung (GA1821 Pte Ltd) 68.9%
YTD change +0.38%
52-wk price range S$0.375-0.536
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