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Can buy this now?
ARA Asset Management (ARA SP): BUY
Market Cap: US$870m | Average Daily Value: US$0.66m
Last Traded Price: S$1.18 Price Target: S$1.57 (Upside 33.1%) (Prev S$1.57)
Analyst
Derek Tan +65 6682 3716 [email protected]
Rachel Lih Rui Tan +65 66823713 [email protected]
Strong quality earnings
- 1Q16 earnings of S$19.4m in line
- S$100m cash available to fund growth initiatives
- ADF 1 likely to see minimal promote fees
Attractive valuations, BUY! The lack of newsflow and activity post the recent rights issue has resulted in a weak share price performance for ARA, which is unwarranted. We see 2016 as another banner year, supported by the widely anticipated launch of Asia Dragon Fund 3 (estimated AUM of S$1.0bn and above) and a growing AUM base as positive catalysts to share price. Our S$1.57 TP is based on sum-of-the parts valuation.
Positioned to capture opportunities. Armed with S$100m in capital from its recent rights issue, ARA is well positioned to capture opportunities that may arise in 2016. The group is hunting for deals in key markets of China, Australia, Korea and Japan. In addition, we understand that the group has invested close to S$200m as seed capital in its various funds, with an unrealised gain of US$21.7m, implying a return in the low-mid teens.
Country desk strategy in target markets of China, South Korea and Australia. ARA has put in place experienced local real estate professionals as heads of its various key markets (China, Korea, Australia, Malaysia, Japan, India/GCC) that the group is keen in deepening its real estate expertise, and thus gain further assess to deal flow in these respective markets. Therefore, having a combination of local real estate expertise and insights, coupled with ARA&rsquo s extensive reach to global capital partners should allow the group to remain nimble, anticipate trends and capitalise on any opportunities that may arise. We understand that China, South Korea and Australia are in focus in the immediate term.
Valuation:
We maintain our BUY call and TP at S$1.57 based on (i) 18x PE on its FY16F recurring fee income and (ii) market price of its REITs.
Key Risks to Our View:
Execution risk. Given pre-determined timeframes for most of its private funds, a prolonged downtown could result in the group not extracting full value upon exit of its various funds.
Wait for a few months first., before buying.
Goldfinger ( Date: 11-Feb-2016 16:46) Posted:
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Well on its way to penny stock status..
ARA Asset Management Limited (ARA) announced their financial results for the year ended 31 Dec 15 on 4 Feb 16, after trading hours.
Key pointers:
1. Full year revenue dropped 10% from S$173 million in FY14 to S$156 million in FY15. However full year adjusted net profit increased 16%, from S$62 million to S$72 million.
2. Due to the rights issuance, they cleared a huge chunk of their debt and strengthened their balance sheet. Current cash and current ratio to 2.05 and 4.22.
3. FY15 was a very busy year of acquisition and divestment. Suntec REIT had successfully acquired 3 floors of strata office space at Suntec Tower Two at a purchase consideration of S$101.6 million. Suntec also divested Park Mall for $411.8 million in conjunction with its 30% interest in the joint venture with SingHaiyi Group and Haiyi Holdings to develop Park Mall. Cache Logistics Trust acquired a total of 6 Australian properties worth approximately A$163.8 million. Cache also recycled their capital by divesting Kim Heng Warehouse for S$9.7 million at 9% premium over the original acquisition price. Fortune REIT divested Nob Hill Sqaure for HK$648 million at 2.9% yield.
4. ARA&rsquo s Asset Under Management (AUM) increased 11.6% from S$26.7 billion in FY14 to S$29.8 billion in FY15.
You can find more info at the following SGX website. I also did a deeper analysis in my blog: http://www.bytesizedinvestments.com/6-po...ar-report/
http://infopub.sgx.com/FileOpen/ARA%204Q...eID=388640 (news release)
http://infopub.sgx.com/FileOpen/ARA%204Q...eID=388641 (PPT)
http://infopub.sgx.com/FileOpen/ARA%204Q...eID=388639 (statement)
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Financial Freedom can be achieved through prudence and patience capital.
http://www.bytesizedinvestments.com/
ARA dropping like a rock... heading to new lows?? What's eating this counter..
李 嘉 诚 参 股 的 新 加 坡 上 市 公 司 亚 腾 资 产 管 理 有 限 公 司 （ ARA Asset Management， 下 称 ARA） ， 在 12月 8日 在 上 海 达 成 了 一 桩 成 交 价 高 达 30亿 元 的 写 字 楼 收 购 案 。
这 是 今 年 国 内 投 资 市 场 上 成 交 价 极 高 的 大 宗 物 业 交 易 。 接 近 该 交 易 的 知 情 人 士 透 露 ， 该 交 易 的 收 购 标 的 是 位 于 上 海 陆 家 嘴 的 东 亚 银 行 大 厦 ， 世 邦 魏 理 仕 是 这 一 交 易 的 中 间 商 。 对 此 ， 世 邦 魏 理 仕 回 应 界 面 新 闻 称 不 便 评 论 ， 但 多 个 信 源 向 界 面 新 闻 称 ， ARA在 上 海 寻 求 物 业 收 购 已 久 ， 东 亚 银 行 金 融 大 厦 的 收 购 交 易 在 历 经 若 干 交 易 流 程 后 ， 在 12月 8日 正 式 完 成 。
东 亚 银 行 金 融 大 厦 建 成 于 2008年 。 楼 高 198米 ， 地 面 共 42层 ， 地 下 3层 。 大 厦 位 于 上 海 陆 家 嘴 环 路 、 花 园 石 桥 路 口 ， 紧 邻 上 海 最 高 的 城 市 地 标 上 海 中 心 ， 并 临 近 新 鸿 基 上 海 国 金 中 心 。 作 为 外 企 最 爱 的 金 融 中 心 ， 陆 家 嘴 的 写 字 楼 长 期 保 持 极 低 空 置 率 。 此 前 ， 世 邦 魏 理 仕 曾 发 布 报 告 称 ， 预 计 陆 家 嘴 租 金 将 持 续 上 涨 ， 并 保 持 稳 定 收 益 。
东 亚 银 行 金 融 大 厦 原 名 高 宝 金 融 大 厦 。 2008年 年 底 ， 开 发 商 曾 将 十 层 写 字 楼 面 积 以 10亿 人 民 币 的 价 格 出 售 予 香 港 第 五 大 银 行 东 亚 银 行 。 东 亚 银 行 也 借 此 交 易 获 得 了 大 厦 的 冠 名 权 ， 并 将 其 改 名 为 &ldquo 东 亚 银 行 金 融 大 厦 &rdquo 。
如 今 ， ARA近 以 30亿 人 民 币 的 价 格 收 购 了 整 幢 大 厦 。 相 对 于 7年 前 东 亚 银 行 10亿 收 购 该 大 厦 不 足 1/3面 积 的 交 易 ， ARA这 笔 交 易 可 以 称 得 上 是 &ldquo 划 算 &rdquo 。
When " Superman" Li Ka Shing' s Cheung Kong reduced it' s stake in ARA thru a sale to the Straits Trading Company, I also reduced my stake in ARA.
anyone know the reason why ARA share price drop so much from close to $2???
Goldfinger ( Date: 01-Dec-2015 16:01) Posted:
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yes.... i am so angry about the recent dilution also!!!
ecekca ( Date: 01-Dec-2015 21:46) Posted:
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So unitholders in those others should remove their poor management...
ecekca ( Date: 01-Dec-2015 21:46) Posted:
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cos poor mgmt...!!! which impact Cache etc...and suntec..
Goldfinger ( Date: 01-Dec-2015 16:01) Posted:
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But, ARA share price has been plunging too, from $2 high? So, they are suffering much.
Goldfinger ( Date: 01-Dec-2015 16:00) Posted:
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Haha, spot onz...... And worse of all, they don' t take their own medicine.
ecekca ( Date: 01-Dec-2015 14:09) Posted:
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already upset those Cache investors...
Goldfinger ( Date: 01-Dec-2015 08:46) Posted:
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Yes ARA is at risk of upsetting unit holders of REITs and this will be a major blow
Bytesizedinvest ( Date: 01-Dec-2015 00:06) Posted:
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Raising script is like a subscription . Since they are like an investment mgmt company. Investors cannot invest in them like funds by subscribing it.
They need the $$ maybe to invest more during mkt downturn
They need the $$ maybe to invest more during mkt downturn
junction ( Date: 24-Nov-2015 10:17) Posted:
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My two cents worth is that ARA is trying to increase capital for (1) repayment of debt, (2) having a warchest to capitalise on opportunities should it arise. It is well-known that ARA is aggressively increasing its stake in Suntec, a move that many sees ARA steering away from its asset-light business model.
However there are other factors at stake too. (ARA) REIT managers are appointed by shareholders directly or indirectly. ARA realized that they must have strategic stakes in the listed companies that they managed, otherwise their position as the REIT manager would be threatened, should those REITs be majority owned by a single shareholder who has a different alignment as ARA. Hence ARA have to guard their interests by increasing their strategic stakes.
Fitch released a report saying that risks for Singapore real estate investment trusts (SREITs) will increase in 2016due to weak economic fundamentals. However SREITs with stronger balance sheets to become more acquisitive in 2016 as they try to boost earnings growth by capitalising on lower asset valuations. This would be an opportunity for ARA should they choose to execute based on the findings above.
Did a short write up on ARA Rights Issuance a couple of days back - http://www.bytesizedinvestments.com/what...ns-to-you/
These are my personal views and I stand corrected should I be wrong.
____
Financial Freedom can be achieved through prudence and patience capital.
http://www.bytesizedinvestments.com/
junction ( Date: 24-Nov-2015 10:17) Posted:
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I also ask the same question. They manage reits, raise money for what? Probably they have been keeping too many reits they manage - part of their fees paid in scripts and the prices of the reits they manage have been dropping significantly.
Goldfinger ( Date: 14-Nov-2015 17:24) Posted:
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I shorted it today.