Monday, 4 July 2016

Metro – HOT STOCK Expects more divestment of 3 Properties in SHANGHAI and Guangzhou

Metro bought the 3 Properties in Shanghai and Guangzhou during 1993-94 at a bargain. Given that the company have conducted a property valuation report on METRO CITY SHANGHAI, METRO TOWER SHANGHAI and GIE TOWER GUANGZHOU, the valuation amounted to be $353m. From the past year, METRO has been unlocking value from its properties investment to reap good return to cushion the slow retail sector in Singapore and Indonesia. We certainty see good progress for METRO to unlock shareholder value in these properties during the financial year 2016-17 to migiate the retail sector slowdown. At $353m, it work out to be a $0.426 per share(828m outstanding shares). Given that METRO is trading at a market capitasliation of $853m, the CASH of $527m is a bonus in METRO balance sheet and high RNAV $1.66. Metro will also be distributing the 7cents dividend to shareholders in 2016. Yield of 6.7%(based on current price $1.03).

Will Metro be a M&A target by PRIVATE EQUITY FUNDS?

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