China Aviation Oil (KimEng)

Background: China Aviation Oil (CAO) is the largest purchaser of jet fuel in the Asia Pacific. It supplies 90% of jet fuel imports to China’s aviation industry. The country’s three major international airports are its key clients. Its other business includes petrochemical and oil trading.

Recent developments: Over the weekend, CAO announced its US$32m investment for a 26% equity stake in Oilhub Korea Yeosu Co. Ltd (OKYC), a joint‐venture company that is building an oil storage terminal in Yeosu, South Korea. This follows hot on the heels of another investment in a greenfield oil storage terminal project in Johor, Malaysia, announced on 6 October.

Key ratios…

Price‐to‐earnings: 9.2x

Price‐to‐NTA: 1.5x

Dividend per share / yield: S$0.02 / 2.2%

Net cash/(debt) per share: S$0.05

Net cash as % of market cap: 5.5%

Share price S$0.91

Issued shares (m) 718.2

Market cap (S$m) 653.6

Free float (%) 28.5

Recent fundraising Nil

Financial YE 31 December

Major shareholders China National Aviation Fuel Group (51.0%), BP Plc (20.0%)

YTD change ‐41.6%

52‐wk price range S$0.83‐1.71

Source: Company

Our view

Strategic asset for oil trading business. The investment in Johor is a joint venture with Malaysian company Centralised Terminals Sdn Bhd (CTSB) to build and operate an oil storage terminal for jet fuel, gasoil and fuel oil at the Port of Tanjung Langsat in Johor (Terminal Three Facility). CAO will own a 26% equity stake in the facility with an equity investment of US$10m over the next two years. The facility will provide CAO with a steady income stream when it is completed by 2013, as well as a platform for expanding its oil trading business outside China.

Adding value to customers. OKYC will be jointly owned by CAO, Korea National Oil Corp (29% stake) and several other Korean conglomerates such as Samsung C&T Corp and LG International Corp. This investment strengthens CAO’s ability to ensure jet fuel supply to its China customers.

FY11 earnings may set new high. CAO reported strong 1H11 earnings on the back of robust volumes and associate earnings. Despite the gloomy global economic outlook for 2H11, the company expects to achieve record earnings for the full year with 1H11 net profit already making up 75% of its FY10 net profit. Valuations are attractive at 9.2x historical PER after the recent sell‐down, with growth prospects aided by strategic investments and robust growth in China’s aviation industry.

City Developments Limited (KimEng)

Event

City Developments Limited (CDL) recently announced that it will take a 30% effective stake in a development acquired by Millennium & Copthorne (M&C) in Ginza, Tokyo. M&C owns the remaining 70% stake. The acquisition allows M&C to gain a strategic foothold in Ginza at what we believe is a reasonable price. Going into 2012, the potential slowdown in M&C’s European (ex‐London) operations is unlikely to have a significant impact on its bottomline. Maintain HOLD.

Our View

M&C will be working with Mitsui Fudosan to redevelop the prime site in Ginza into a deluxe 325‐room hotel, expected to be completed by end‐2014. Mitsui Fudosan will be the project manager and also the eventual lessee to operate the hotel. M&C estimates the total development cost including land to be £113m, or £349,000 per key. We think this is a fair price, as we estimate the breakeven Average Room Rate (ARR) to be £173/night, when we think the hotel may eventually command an ARR of £200/night.

Meanwhile, the ongoing Eurozone debt crisis could weigh on the hospitality business in Europe, particularly if demand for business travel shrinks. However, we believe that the impact on M&C will be minimal as Europe ex‐London generally accounts for less than 5% of its EBITDA. In contrast, London, its biggest market in Europe accounting for about 25% of earnings, should perform well next year as the city hosts the 2012 Summer Olympics from 27 July to 12 August.

In Singapore, we expect CDL to moderate the pace of its new launches. In particular, we think the launch of high‐end projects such as Lucky Tower will likely be deferred until the jitters in global markets dissipate. On the other hand, the raising of the monthly income ceiling to buy executive condominium units from $10,000 to $12,000 should benefit CDL, which has an inventory of about 700 unsold EC units from Blossom Residences, as well as the yet‐to‐be‐launched site at Choa Chu Kang.

Action & Recommendation

Given the strong likelihood of a recession next year, we see few positive catalysts to upgrade our call. Maintain HOLD with a target price of $11.05, pegged at 15% discount to RNAV.

续租约起争论如何解决？

笔者谈了很多如何鉴选一位好的租户，如何防止租户耍赖欺骗，讲尽了租户的不是。

最后也得告诉亲爱的房东，很多业主会沦为穷房东、房子租不出去，主宾关系闹僵，还得怪业主无知、自大或吝啬。

好的租户也会有一定的妥协底线，但市场有波动，租金有起落，房东当然要争取最高的租金。

但当时的“最高”不一定是比现有的租金“更高”。

笔者在这里不得不向无知房东传达正确的租赁方式与策略。

房东必须掌握租金市场，了解租户动向，才能包赢，或者说双赢。

调整租金应低于市价

租约上的条例有特别规定，房东在续约时调整租金的方式，然而，若房东与租户无法达致协议，房东必须能够给予合理的实证，包括专业人士的估价报告来支持提起租金的要求。

对于长期的好租户，房东必须了解续约之下，租户等于租上一个旧房子，不能以全新房子的租金比较。

更何况续约之下，房东节省了替代租户的中介费、维修与装修费，以及物业空置风险。

因此，若有必要调整租金，应定于市价以下是最理想的。

当然，租户搬迁到其他地方也是一项时间与经济负担，房东也可捉住租户心理，争取到一个理想的租金。

贪婪房东逼走好租户

笔者相信好房东是拥有好租户的其中一个基本因素，至少坏房东不会有好租户，这里举个续约租金调整的例子供房东们参考：

笔者的一位好友义明在旧巴生路租了一间公寓，房东是一位上市公司老板，也是义明的好朋友，其他同样单位都以1200令吉租出，义明却以2000令吉租下。

原因是他不想对朋友太计较，也不好意思与房东朋友的太太争辩市价，到底房东都把自己的产业看得最好最高，二来是该单位的装潢比其他单位来得高尚美观，只要住得 舒服贵一点
也算了。然而，住下去才发觉很多问题，自来水两年来不时污浊泥黄、垃圾臭味两年来夜夜飘香、楼下卡拉OK噪音不断、电梯不时故障、管理层其差……

投诉无门，将不满忍了下来，岂知在约满时谈续约时，他还以为可以要求减租10％，反而被房东太太要求起租10％。

无可奈何下，他唯有匆匆搬家，房东失去一位好租户，有关单位之后空置超过一年都租不出去。

公正与冷静看待

一些不愉快的意外发生，都在双方意料与控制之外，房东应该理智和理性的处理有关问题。

事实上，这一类事件是最容易引起争执的起源。

譬如，管理公司的一些疏忽导致租户的不便或亏损，而房东认为缴交管理费，就是聘请管理层来保障住户的安全与居住环境舒适。

一些租户无法区分房东与管理层的责任，在这种情况下，房东应该冷静和理智的向租户解释，免却引起争辨，严重破坏双方关系。

确保购买盗窃保险

一般房东都会为本身物业购买水火保险，但却忽略为屋内电器、家具、设备等等投保，包括盗窃或毁坏保险等。

万一发生爆窃案，屋内电器、家具、设备被盗走或破坏，房东与租户将为责任问题闹得脸红耳赤。

房东通常会认为租户应该负起全责，租户则会驳斥这种事件不在他的控制能力范围内而拒绝赔偿。

或者房东对事件质疑，也有可能双方对于损失和赔偿数额有分歧，包括财物折旧价值争拗，这会引发冲突，破坏宾主良好关系。

租户或可索赔

相反的，在某一些情况之下，租户也有可能向房东索取赔偿。

租户可用房东疏于保安问题或房子结构没有达到安全标准，而要求房东为他的私人财物损失赔偿。

若有购置保险，同样的，一切调查和赔偿数额皆由保险公司负责。


http://www.nanyang.com.my/node/388704?tid=691