Money Talk: GLP, Stamford Land, Vard Holdings

SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.

1. Global Logistic Properties (GLP)

Broker: CIMB

GLP's Q4 and FY2014 core net profits were in line, at 26 per cent and 105 per cent of our FY2014 forecasts respectively.

Operationally, GLP continued to benefit from strong leasing in China, driven by e-commerce. We expect a ramp-up of land acquisitions and development starts, partly attributable to its strategic China partnership.

We have yet to factor in its Brazil transaction, but estimate that a 100 per cent injection into its private fund has the potential to add up to $0.09 to our target price.

We maintain our Add rating and target price of $3.48, with further capital recycling through injections as catalysts. Our FY2015-2016 earnings per share forecasts have been lifted by 8-10 per cent as we factor in faster development starts and completions.

2. Stamford Land

Broker: OSK-DMG

Stamford Land reported headline net profit of $27.1 million for FY2014, a decline of 14 per cent year-on-year. Stripping out revaluation gains from its Perth office property in the prior year, we estimate core earnings growth of 20 per cent.

Notwithstanding a weaker Australian dollar, Stamford's hotel division comprising seven hotels in Australia and one in New Zealand delivered a 6 per cent rise in operating profit to $40.1 million on the back of a recovery in its Adelaide hotels and higher occupancies.

Its property division reported higher turnover of $48 million (up 118 per cent from a year ago) from sales at its projects in Auckland and Sydney. Taking advantage of a strong residential market in Sydney, Stamford Land has substantially sold its upcoming project Macquarie Park Village, a re-development of its North Ryde hotel property. However, revenue and profit recognition will only commence in 2017 on completion.

Meanwhile, the group has obtained development approvals for the redevelopment of its Sir Stamford Circular Quay hotel and Dulwich Hill property, and we expect these projects to be progressively launched over the course of the next 12 months.

We reiterate a Buy on the stock with a target price of $0.73.

3. Vard Holdings

Broker: OCBC

Vard announced that it has been awarded a new contract for the construction of one offshore support vessel of Rolls-Royce design.

The value of the contract is in excess of 1 billion Norwegian krone (S$210.8 million) and is for Island Offshore, a repeat customer which manages a fleet of more than 30 high quality vessels.

Delivery is scheduled in 2Q16 from one of its Norway yards. This latest contract win boosts Vard's year-to-date order wins to about 6.8 billion krone, based on our estimates.

We maintain our Hold rating and $0.97 fair value estimate on Vard.