Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li><a href="https://www.smartkarma.com/entities/oue-commercial-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:912" rel="noopener">OUE Commercial REIT (OUECT SP)</a> 2H21 DPU -4.2% YoY; Weakness in MG and LP offset by office and hotel recovery</li><li><a href="https://www.smartkarma.com/entities/prime-us-reit" target="_blank" data-smartkarma-citation="entities:28144" rel="noopener">Prime US REIT (PRIME SP)</a> 2H21 DPU +0.9% YoY; Strong reversions continue but occupancy remains a struggle</li><li>Frasers Hospitality forays into Cambodia, to launch 3 more properties</li></ul>

OUE Commercial REIT (OUECT SP) 2H21 DPU -4.2% YoY; Weakness in MG and LP offset by office and hotel recoveryPrime US REIT (PRIME SP) 2H21 DPU +0.9% YoY; Strong reversions continue but occupancy remains a struggleFrasers Hospitality forays into Cambodia, to launch 3 more properties

ASEAN Builder's Scoop (17Feb22) - OUECT Persistent Weakness in MG and LP

<ul><li>Prime US REIT (PRIME SP) terminates lease with WeWork; Fully covered until 4Q22  </li><li>Hoi Hup, Sunway (SWB MK) acquire two freehold land parcels for S$815m; Potential GDV of S$2bn</li><li>CanningHill Piers saw robust 77% take-up rate at ~S$3,000psf</li></ul>

Prime US REIT (PRIME SP) terminates lease with WeWork; Fully covered until 4Q22  Hoi Hup, Sunway (SWB MK) acquire two freehold land parcels for S$815m; Potential GDV of S$2bnCanningHill Piers saw robust 77% take-up rate at ~S$3,000psf

ASEAN Builder's Scoop (22Nov21) - PRIME terminates WeWork lease

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Cuscaden is offering an all-cash offer of S$2.36 or cash &amp; units offer to comprise S$1.602 in cash and 0.782 <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> units per SPH share (worth S$2.40).</li>
<li>SPH independent directors preliminarily recommend to shareholders to vote against the Keppel scheme and vote in favour of the Cuscaden scheme. Cuscaden’s offer will be implemented by February 2022. </li>
<li>Cuscaden’s revised offer options are attractive in the context of SPH’s long-term multiples/share prices and <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>’s final offer. Cuscaden’s revised offer seems like a done deal. </li>
</ul>


Cuscaden is offering an all-cash offer of S$2.36 or cash &amp; units offer to comprise S$1.602 in cash and 0.782 SPH REIT (SPHREIT SP) units per SPH share (worth S$2.40).
SPH independent directors preliminarily recommend to shareholders to vote against the Keppel scheme and vote in favour of the Cuscaden scheme. Cuscaden’s offer will be implemented by February 2022. 
Cuscaden’s revised offer options are attractive in the context of SPH’s long-term multiples/share prices and Keppel Corp (KEP SP)’s final offer. Cuscaden’s revised offer seems like a done deal. 


Cuscaden’s Revised Offer Options to End the Battle for SPH

<p><a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> announced a final and improved privatisation offer from <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>. Keppel’s final offer bumps up the cash consideration 30% from S$0.668 cash per SPH share to S$0.868 cash per SPH share while keeping unchanged 0.596 <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> units per SPH share along with SPH distributing-in-specie 0.782 <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> units per SPH share. Based on the last close price of Keppel REIT and SPH REIT, the total consideration is S$2.351 per SPH share, which is a 12.0% premium to the previous Keppel offer of S$2.099 per SPH share and a 12.0% premium to Cuscaden’s offer of S$2.10 cash per SPH share.</p><p>As discussed in <a href="https://www.smartkarma.com/insights/sph-s-rival-offer-from-cuscaden" target="_blank" data-smartkarma-citation="insights:59774" rel="noopener">SPH’s Rival Offer from Cuscaden</a>, on 29 October, SPH received a competing privatisation offer from Cuscaden at S$2.10 cash per SPH share. Since the announcement, SPH has facilitated due diligence to obtain a revised proposal from Cuscaden.</p><p>Keppel’s final offer requires SPH to hold its EGM and scheme meeting to vote on Keppel’s scheme by 8 December. Keppel has obtained all regulatory approvals and waived the MAC clause. SPH has recognised that Keppel’s final offer is superior to Cuscaden’s offer and will call for the scheme meeting.</p><p>We previously noted that Cuscaden’s offer has greater certainty of value as it is all cash, eliminates the risk of changing REIT unit prices (Keppel REIT and SPH REIT) and does any require further shareholders' approval on the part of Cuscaden (Keppel’s offer requires approval from Keppel shareholders). </p><p>However, since the announcement of Cuscaden’s offer, SPH REIT and Keppel REIT unit prices have increased by 4.6% and 1.8% respectively, increasing the combined value of the REIT units by S$0.047 per SPH share. SPH REIT also has a floor price due to the minimum chain offer price of S$0.964 per SPH REIT unit which Cuscaden is obliged to offer under its proposal. Crucially, the rising REIT unit prices had lifted Keppel’s previous offer ($2.15 at last close prices) above Cuscaden’s offer.  </p><div class="content-highlight"><p>Keppel’s final offer is attractive in the context of SPH’s historical long-term multiples and share prices. Based on the SPH REIT and Keppel REIT traded prices since the announcement of Keppel’s previous offer, Keppel’s final offer implies a range of S$2.201-2.355 per SPH share. Under the terms of the final Keppel proposal, any competing offer by way of a scheme of arrangement must be signed by 16 November and any competing general offer must be announced by 1 December. Barring a material decline in the REIT unit prices, we think it will be difficult for Cuscaden to launch a more compelling all-cash offer. Overall, we think that Keppel’s final offer has a good probability to be the winning bid.  </p></div>

Singapore Press Holdings (SPH SP) announced a final and improved privatisation offer from Keppel Corp (KEP SP). Keppel’s final offer bumps up the cash consideration 30% from S$0.668 cash per SPH share to S$0.868 cash per SPH share while keeping unchanged 0.596 Keppel REIT (KREIT SP) units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT (SPHREIT SP) units per SPH share. Based on the last close price of Keppel REIT and SPH REIT, the total consideration is S$2.351 per SPH share, which is a 12.0% premium to the previous Keppel offer of S$2.099 per SPH share and a 12.0% premium to Cuscaden’s offer of S$2.10 cash per SPH share.As discussed in SPH’s Rival Offer from Cuscaden, on 29 October, SPH received a competing privatisation offer from Cuscaden at S$2.10 cash per SPH share. Since the announcement, SPH has facilitated due diligence to obtain a revised proposal from Cuscaden.Keppel’s final offer requires SPH to hold its EGM and scheme meeting to vote on Keppel’s scheme by 8 December. Keppel has obtained all regulatory approvals and waived the MAC clause. SPH has recognised that Keppel’s final offer is superior to Cuscaden’s offer and will call for the scheme meeting.We previously noted that Cuscaden’s offer has greater certainty of value as it is all cash, eliminates the risk of changing REIT unit prices (Keppel REIT and SPH REIT) and does any require further shareholders' approval on the part of Cuscaden (Keppel’s offer requires approval from Keppel shareholders). However, since the announcement of Cuscaden’s offer, SPH REIT and Keppel REIT unit prices have increased by 4.6% and 1.8% respectively, increasing the combined value of the REIT units by S$0.047 per SPH share. SPH REIT also has a floor price due to the minimum chain offer price of S$0.964 per SPH REIT unit which Cuscaden is obliged to offer under its proposal. Crucially, the rising REIT unit prices had lifted Keppel’s previous offer ($2.15 at last close prices) above Cuscaden’s offer.  Keppel’s final offer is attractive in the context of SPH’s historical long-term multiples and share prices. Based on the SPH REIT and Keppel REIT traded prices since the announcement of Keppel’s previous offer, Keppel’s final offer implies a range of S$2.201-2.355 per SPH share. Under the terms of the final Keppel proposal, any competing offer by way of a scheme of arrangement must be signed by 16 November and any competing general offer must be announced by 1 December. Barring a material decline in the REIT unit prices, we think it will be difficult for Cuscaden to launch a more compelling all-cash offer. Overall, we think that Keppel’s final offer has a good probability to be the winning bid.  

Keppel’s Final Offer for SPH - Game, Set and Match?

<h2>Singapore</h2><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/816/original/image_54862238621636079380984.png?1636079382" class="editor-image img-responsive" data-smartkarma-image-id="239816"></figure><h3><a href="https://www.smartkarma.com/entities/lendlease-global-commercial-reit" target="_blank" data-smartkarma-citation="entities:28292" rel="noopener">Lendlease Global Commercial REIT (LREIT SP)</a> 1Q22 Business Updates – Robust occupancy despite hiccups in tenant sales and shopper traffic</h3><ul><li>1Q22 Revenue, NPI, DPU and NAV numbers are not disclosed</li><li>Overall portfolio occupancy stood at 99.8% in 1Q22 (vs. 99.8% in 4Q21 and 99.7% in 3Q21), with a long WALE of 8.5 years by NLA and 4.4 years by GRI. Lease expiring in FY22E has been de-risked to 4% by NLA and 11% by GRI within 1Q22 period</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Lendlease Global Commercial REIT (LREIT SP) 1Q22 Business Updates – Robust occupancy despite hiccups in tenant sales and shopper traffic1Q22 Revenue, NPI, DPU and NAV numbers are not disclosedOverall portfolio occupancy stood at 99.8% in 1Q22 (vs. 99.8% in 4Q21 and 99.7% in 3Q21), with a long WALE of 8.5 years by NLA and 4.4 years by GRI. Lease expiring in FY22E has been de-risked to 4% by NLA and 11% by GRI within 1Q22 period

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Prime US REIT (PRIME SP)

ASEAN Builder's Scoop (17Feb22) - OUECT Persistent Weakness in MG and LP

OUECT persistent weakness in MG and LP; PRIME strong reversions continue; Condo/HDB rents continued rising in Jan22; ALCO introducing FY23E...

SCCM Asia Research

ASEAN Builder's Scoop (22Nov21) - PRIME terminates WeWork lease

PRIME terminates WeWork lease; SWB/Hoi Hup acquires site for S$815m; CanningHill Piers robust 77% take-up rate; MEG PHP6bn new Bulacan township;...

SCCM Asia Research

Cuscaden’s Revised Offer Options to End the Battle for SPH

Cuscaden is offering an all-cash offer of S$2.36 per share or cash & units offer to comprise S$1.602 in cash and 0.782 SPH REIT units per SPH share...

Arun George

Keppel’s Final Offer for SPH - Game, Set and Match?

Keppel's final and improved offer is worth S$2.351 per share. It will be difficult for Cuscaden to launch a more compelling all-cash offer....

Arun George

ASEAN Builder's Scoop (5Nov21)

LREIT hiccups in tenant sales and visitations; CERT timely pivot to logistics sector; PRIME strong reversions; PLIFE new master lease offers long...

SCCM Asia Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)