Kenneth Koh, Market & Equity Analyst Osama … 2014-1…Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.

Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.

1

8th Dec 14, 11.15am Webinar

Market StrategistsJoshua Tan, Head of Research

Kenneth Koh, Market & Equity Analyst

Soh Lin Sin, Macro | Equities Economist

Osama Bakhteyar, Macro | Equities Economist

SG & US Equity Analysts Wong Yong Kai, US Equities

Colin Tan, Telecoms | Technology

Caroline Tay, Real Estate

Benjamin Ong, Finance | Offshore Marine

Richard Leow, Transport & Logistics

By Phillip Securities ResearchMr. Chan Wai Chee, CEO

Jaelyn Chin, Operations Exec



22

Disclaimer

This presentation is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to subscribe

for, purchase or sell the investment products mentioned herein. It does not have any regard to your specific investment objectives, financial

situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss

arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks including the

possible loss of the principal amount invested. The value of the units in any fund and the income from them may fall as well as rise. Access to

services and your account may be affected by market conditions, system performance and other reasons.

The information contained in this presentation has been obtained from public sources which PSPL has no reason to believe are unreliable and

any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this presentation are based on such

information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is

made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research

contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the information or Research made

available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect,

incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been

advised of the possibility of such damages.

You may wish to seek advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase

any of the investment products mentioned. In the event that you choose not to seek advice from a qualified financial adviser, you should

consider whether the investment product is suitable for you before proceeding to invest and we do not offer advice in this regard unless

mandated to do so by way of a separate engagement.

You are advised to read the Conditions governing Phillip Securities Trading Accounts and the Risk Disclosure Statement carefully before

investing in this product.



3

Update: SingPost($1.910, Accumulate, TP $2.03)

• Announced acquisition of Couriers Please from New Zealand Post for A$95 million (~$$105 million). Acquisition would be paid in cash.

• Excluding one-off items, purchase price estimated to be in 15-20x P/E range on a normalized basis, shared by management.

• 4-5.4% earnings (S$5.3 – 7m) contribution to FY14 PATMI (post-acquisition) based on pro forma.

• Rationale:

Specialised metropolitan small parcel delivery business in Australia, adding last-mile delivery capabilities, complementing existing freight forwarding (Famous Holdings) and warehousing (Quantium Solutions) capabilities in the country.

Tapping on growth in Australia’s ecommerce market, inline with group’s strategy on expanding ecommerce logistics network and strengths in Asia.

• Weak Aussie dollar provides opportune moment for acquisition and restructuring costs. However, risks include FX headwinds from weaker Aussie dollar.

• Maintain Accumulate in view of potential upside, strong growth potential from ecommerce.



4

Property Sector: Residential Outlook 2015

Caroline Tay

Investment Analyst

Phillip Securities Research

8th Nov 2014



5

Residential: Falling Prices

5

Private residential price index slid for 4th consecutive quarter 0.7% q-q, 3.9% lower than peak in 3Q13. CCR/RCR/OCR down 0.8%/0.4%/0.3% q-q and corrected 5.7%/4.5%/2.3% from peak respectively.

Price decline rate is highest for CCR, though overall we are seeing a slower decline as compared to 2Q14. (CCR: -0.8% vs -1.5% in 2Q, RCR: -0.4% same as Q2, OCR: -0.3% vs -0.9%)

Median price for new non-landed was $1.02 mn, lower than $1.09 mn in 2013

Median size shrunk 829 sf in 2013 to 753 sf in 9M14

Source: URA, CEIC

100

120

140

160

180

200

220

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

Property Price Index: Private Resdential Non Landed CCR RCR OCR



6

Residential: Launches vs New Sales

6000

7000

8000

9000

10000

11000

12000

13000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Launches New Sales Median Price per sqm Non Landed (RHS)

Slowing sales activities as 3Q14 transaction volumes falls to 2955 units -30% q-q, -27% y-y, 2nd lowest quarter since 2009

Primary sales plunge 43% q-q, 37% y-y to 1531 units sold mainly due to limited new projects release for sales (1294 units vs 2843 units in 2Q14 & 3313 units in 3Q13). Lowest launches and primary sales quarter since 2009

Source: URA, CEIC



77

Residential: Primary Sales

-4%

-2%

0%

2%

4%

6%

8%

10%

% price change q-q

CCR RCR OCR

OCR – 503 launches, 738 units sold , down 55.3% qoq

RCR – 685 launches, 656 units sold. down 26% qoq

CCR – 106 launches, 137 units sold, up 17% q-q

10M14 transacted volumes down 50% y-y to 6795 units for primary sales

26.0%

23.6%

20.3%

26.7%

0%

5%

10%

15%

20%

25%

30%

0

500

1000

1500

2000

2500

3000

4Q13 1Q14 2Q14 3Q14

Units Sold (Singaporean) Units sold (PR)

Units (Foreigners) % of PR & Foreigners

0%

20%

40%

60%

80%

100%

120%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

CCR Sales RCR Sales OCR Sales

Source: URA, CEIC




3Q14, developers focus on selling old inventory to avoid penalty. Only 780 or 60% were new launches. Vermont at Carnhill – 37 units sold $2110 psf 13% lower & The Panorama – 60 units sold $1240 psf 8% lower

Top performing new launches projects for 3Q14 are: City Gate, Highline Residence, Seventy Saint Patrick’s, Citron Residences

Sales volume likely to be higher in Q4 with highly anticipated launches like one tower of Marina One Residences, Sophia Hills, TRE Residences at Geylang East Avenue 1. Marina One sold 334 units (median price: $2228 psf).

Developers are expected to give “early bird” price discount or include other promotions to push for initial sales

Expect the primary sales for FY14 to be 7500-8500 units vs 14948 sold in 2013

8




9

New launches with good sales in 3Q14

Major upcoming launches

Source: ST Property, BusinessTimes, Company data, PSR

Region Total Units Launch Units Sold Units Price Range (S$/psf)

Highline Residence RCR 500 160 142 1599-2245

City Gate RCR 311 150 105 1529-2226

Seventy Saint Patrick OCR 186 140 110 1400-1795

The Citron Residences RCR 54 49 40 1400-1835

Location Total Units

TRE Residences RCR 250

Marina One CCR 1042

Poolen & Bleu CCR 106

Marine Blue RCR 124

Sophia Hills CCR 493

South Beach Residences CCR 190

Victoria ParK Villas CCR 109

North Point Residences OCR 920

Bellewoods OCR (EC) 561

Lake Life OCR (EC) 546

Bellewaters OCR (EC) 651

The Terrace OCR (EC) 747

The Amore OCR (EC) 395



Residential: Supply Pipeline

10

Supply of new private residential units at 3Q14 stands at 79,364 within next 5 years. Including EC, supply is 97,180.

unlaunched + unsold units with pre-requisites for sale = 21,275

Expected completion of 4336 in 4Q14 & 20824 in 2015

National Development Minister Khaw Boon Wan announced on 20 Oct that the government would reduce the supply of Build-to-Order (BTO) flats by 25 per cent to about 16,000 in 2015 and fewer sites will be put up for sale via the Government Land Sales (GLS) programme

0

20,000

40,000

60,000

80,000

100,000

120,000

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Planned Development Under Construction

Private Residential Supply Pipeline

0

5000

10000

15000

20000

25000

4Q14 2015 2016 2017 2018 >2018

Expection Completions of Supply Pipeline

Sold Unsold

Source: URA, CEIC



Residential: Rental Market

Rents of private residential homes continue to soften by 0.8% q-q after dip of 0.6% in 2Q14

This is the 4th consecutive quarter of decline

Vacancy rate remains flat at 7.1% in 3Q14 after 5 quarters of increase since 1Q13

Expect rents to face downward pressure and vacancy rate to increase with the anticipated stream of completions and foreign labour restrictions

11

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

Capital Gains y-y Rental Yield

Source: URA, CEIC

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Rental % change q-q

CCR RCR OCR

3%

4%

5%

6%

7%

8%

9%

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

Vacancy Rate Private Residential (Overall)

Vacancy Rate Private Residential (Non Landed)



1212

Residential: Resale Market

HDB resale price index continue the downtrend with -0.8% m-m after a rise of 0.1% m-m in Oct. Drop 9.8% since peak April 13

Private Residential (PR) resale index up 0.4% in Oct 14 after staying flat since Jul 14, down 4.5% y-y

HDB resale volume in Nov 14 was 1350, down 13.1% from 1553 transacted in Oct

HDB sales launch for 2014 is lower 20% (29K BTO+SBF in 2014 vs 35.5K units in 2013)

Source: SRX

120

130

140

150

160

170

180

190

Resale Index

Private Residential Resale Index HDB Resale Index



Residential: Resale Market

13

Taking longer time to secure a deal:

condo on average 6 months vs < 3 mths in 2013 – 120/137/154 days in 1/2/3Q in 2014

HDB 91 days vs 60 days in 2013

HDB Median Price spread 4.7,4.9,5.9% in 1/2/3Q respectively (3.8% in 3Q13 & 2.1% in 2012)

Non private median spread 6.3,7.3,8.2% in 1/2/3Q (4.9% in 3Q13 & 4.1% in 2012)

Resale prices likely to edge lower in 2015 due to oncoming flood of new homes with an increased number of second timers (6000 per annum) to new BTO flats



Property Outlook: Residential

Residential - Market outlook continues to face headwinds with cooling measures to stay in near term

Since 2009, property price index rose by 60%. Prices have been resilient with a gradual fall of 4% since peak. Strict financing and regulatory environment to continue to temper demand for homes and weigh down prices into 2015. Expect a total 10-15% correction by 2016

New sales volume is expected to remain modest with cautious buyers adopting wait-and-see approach for better pricing. Developers may delay launches while clearing old inventory

Well-located projects with strong location attributes for attractive pricing points like near new Thomson East Coast Line or new regional hubs will see strong sales

Rental housing market rents to remain depress for 2015 with many completions and slowing inflow of foreigners meaning shrinking tenant pool.

Government scale back the supply of private housing land (3020 units vs 3900 in 2H14)on GLS program for 1H2015

14



Office

Top performer for this year.

Driven by tight supply rather than increased demand.

Expect positive outlook to continue into 2015 though rental growth momentum to ease in 2H15 with anticipated upcoming supply glut for Grade A office in 2016.

Prime commercial assets rental should remain resilient while older offices will be affected

15

0

1,000

2,000

3,000

4,000

5,000

2015 2016 2017 2018

Upcoming Office Supply

Decentralised Fringe CBD Core CBD

0%

2%

4%

6%

8%

10%

12%

14%

-1000

-500

0

500

1000

1500

Q4

20

09

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

10

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

11

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

12

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

13

Q1

20

14

Q2

20

14

Q3

20

14

Change in Office Space (SQF'000) Absorption (SQF'000)

Vacancy Rate (RHS)



Retail

Neutral outlook.

Rent growth to be capped by influx of new suburban malls, falling footfall (down -1.5% yoy), rising business costs and slowing retail sales with increased competition from ecommerce and declining tourist arrivals

Demand for retail space in prime shopping areas are like Orchard Road should be healthy with (1) international retailers looking to Orchard area to launch their brands / expand their presence in the region and (2) limited supply

16

27

28

29

30

31

32

33

34

35

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

Prime Retail Rents ($S psf/mth)

Orchard Suburban

0

200

400

600

800

1000

1200

4Q2014 2015 2016 2017 2018

'000 Major Retail Development Supply Pipeline

Orchard City / City Fringe Suburban



Hospitality

• Neutral outlook.

• Facing headwinds with upcoming hotel supply in 2015 & 2016, slowdown in tourists arrivals with less Chinese visitors and increasing operating cost environment.

• Luxury hotels or hotels with strong corporate customer base should remain resilient which less affected by the decline in China tourists.

17

0

500

1000

1500

2000

2500

3000

3500

2014 2015 2016 2017 2018

Upcoming Hotel Supply

Economy Mid Tier Upscale Luxury

68%

72%

76%

80%

84%

88%

$0

$50

$100

$150

$200

$250

$300

2008 2009 2010 2011 2012 2013 9M2014

Hotel Performance

ARR Revpar AOR%



Recommendation

We believe property developers stock prices have taken into account the oversupply in residential market, but there is no bullish catalyst for the sector yet.

Prefer developers with

A geographically diversified portfolio and strong recurring income to weather the lumpy development sales cycle for this period

Low gearing or fixed rate debts to counter potential interest rate increase

Organic growth pipeline via AEIs or investment development / acquisition projects

18



Coverage: Amara Holdings

19

Amara Holdings Ltd

Upcoming Amara Bangkok (start commencement in 1Q15) and

Amara Shanghai to double revenue for hospitality by FY16 once

new completions

Resilient performance for 100AM and Amara Singapore underpin

by strong corporate customer base. 3Q14 revpar & AOR at $176 &

90%, above industry performance ($162 & 88.6%)

Higher revenue recognized from the JV project CityLife@Tampines

TOP in end FY15

Last closing price: $0.505

BUY TP$0.70

Local Hotel, 35.9%

Overseas Hotel, 15.2%

Local Retail & Office, 22.1%

Overseas Retail &

Office, 18.2%

Residential, 7.7%

Others, 0.9%



Coverage: Ho Bee Land Limited

20

Ho Bee Land Ltd

A geographical diversified portfolio

Strong recurring income from Metropolis and expanding London

portfolio

Development income from overseas residential projects to boost

earnings in FY16

Net gearing healthy at 0.35x


Accumulate TP$2.33

Local Commerical,

46%Local Residential,

18%

Overseas Commerical,

20%

Overseas Residential,

16%



Coverage: OUE Limited

21

OUE Limited

Proposed divestment of OUE Crowne Plaza Changi Airport for

S$495mn in 2 phases (end 2014 & end 2015) to unlock capital

Visible earnings pipeline with AEI activities: OUE Downtown and

Service Apartment in FY16, US Bank Tower observation deck, JV

Korea project for hotel developments.

Trades at 0.51x B/V, Net gearing at 0.40x


Accumulate TP$2.52 Office, 40.9%

Retail, 6.7%

Hospitality, 17.2%

Residential, 12.2%

REITs, 15.9%

Others, 7.1%



Coverage: Global Logistics Properties Ltd

22

GLP

Market leaders as an logistics property player in China, Japan &

Brazil

Outlook driven by value creation from development projects and

growing fund management platform

Expand to US with GIC to acquire US$8.1 bn US logistics portfolio.

Grow fund management platform by 61% to US$21.3 bn

Strong balance sheet with rich cash positions from divestment of

stablished assets


Accumulate TP$3.03

China, 49%

Japan, 33%

Brazil, 10%

Fund Management,

5%

Others, 3%



Coverage: Sinarmas Land Limited

23

Sinarmas Land

Unlock value from huge land banks

Superior profit margin indicates potential growth in the real estate

market in Indonesia

War chest of S$755mn and low gearing ratio of 2%

Deely under-valued with deep discount to RNAV


BUY TP$0.96

Indonesia, 84%

Malaysia, 4%

Singapore, 4%London, 7% China, 1%



24

Ask Questions!

Market StrategistsJoshua Tan, Head of Research

Kenneth Koh, Market & Equity Analyst

Soh Lin Sin, Macro | Equities Economist

Osama Bakhteyar, Macro | Equities Economist

SG & US Equity Analysts Wong Yong Kai, US Equities

Colin Tan, Telecoms | Technology

Caroline Tay, Real Estate

Benjamin Ong, Finance | Offshore Marine

Richard Leow, Transport & Logistics

By Phillip Securities ResearchMr. Chan Wai Chee, CEO

Jaelyn Chin, Operations Exec



2525

Disclaimer

This presentation is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to subscribe

for, purchase or sell the investment products mentioned herein. It does not have any regard to your specific investment objectives, financial

situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss

arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks including the

possible loss of the principal amount invested. The value of the units in any fund and the income from them may fall as well as rise. Access to

services and your account may be affected by market conditions, system performance and other reasons.

The information contained in this presentation has been obtained from public sources which PSPL has no reason to believe are unreliable and

any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this presentation are based on such

information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is

made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research

contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the information or Research made

available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect,

incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been

advised of the possibility of such damages.

You may wish to seek advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase

any of the investment products mentioned. In the event that you choose not to seek advice from a qualified financial adviser, you should

consider whether the investment product is suitable for you before proceeding to invest and we do not offer advice in this regard unless

mandated to do so by way of a separate engagement.

You are advised to read the Conditions governing Phillip Securities Trading Accounts and the Risk Disclosure Statement carefully before

investing in this product.

Kenneth Koh, Market & Equity Analyst Osama … 2014-1…Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated

Documents