SGX:TS0U

Stock Analysis Report

OUE Commercial Real Estate Investment Trust

Executive Summary

OUE C-REIT is a real estate investment trust listed on the Main Board of Singapore Exchange Securities Trading Limited since 27 January 2014.In September 2019, OUE C-REIT completed the merger with OUE Hospitality Trust to become one of the largest diversified REITs with total assets of S$6.8 billion.

Rewards

Trading at 41.8% below its fair value

Earnings are forecast to grow 26.26% per year

Risk Analysis

Shareholders have been substantially diluted in the past year

Dividend of 4.64% is not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with high growth potential.

Share Price & News

How has OUE Commercial Real Estate Investment Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TS0U has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

TS0U

-0.3%

SG REITs

-1.4%

SG Market


1 Year Return

14.3%

TS0U

15.3%

SG REITs

0.7%

SG Market

Return vs Industry: TS0U underperformed the SG REITs industry which returned 17% over the past year.

Return vs Market: TS0U exceeded the SG Market which returned 2.1% over the past year.


Shareholder returns

TS0UIndustryMarket
7 Day0%-0.3%-1.4%
30 Day-0.9%3.6%0.5%
90 Day1.8%1.8%1.9%
1 Year22.4%14.3%22.4%15.3%4.8%0.7%
3 Year12.1%-19.4%52.1%26.0%13.7%1.6%
5 Year19.2%-30.4%59.3%15.9%11.5%-7.2%

Price Volatility Vs. Market

How volatile is OUE Commercial Real Estate Investment Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is OUE Commercial Real Estate Investment Trust undervalued compared to its fair value and its price relative to the market?

41.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TS0U (SGD0.56) is trading below our estimate of fair value (SGD0.96)

Significantly Below Fair Value: TS0U is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TS0U is good value based on its PE Ratio (13.6x) compared to the REITs industry average (15.3x).

PE vs Market: TS0U is poor value based on its PE Ratio (13.6x) compared to the SG market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: TS0U is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: TS0U is good value based on its PB Ratio (0.9x) compared to the SG REITs industry average (1x).


Next Steps

Future Growth

How is OUE Commercial Real Estate Investment Trust forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

26.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TS0U's forecast earnings growth (26.3% per year) is above the savings rate (1.8%).

Earnings vs Market: TS0U's earnings (26.3% per year) are forecast to grow faster than the SG market (6.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TS0U's revenue (20.9% per year) is forecast to grow faster than the SG market (5.6% per year).

High Growth Revenue: TS0U's revenue (20.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TS0U's Return on Equity is forecast to be low in 3 years time (4.9%).


Next Steps

Past Performance

How has OUE Commercial Real Estate Investment Trust performed over the past 5 years?

17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TS0U has a large one-off gain of SGD54.6M impacting its September 30 2019 financial results.

Growing Profit Margin: TS0U's current net profit margins (56%) are lower than last year (76.4%).


Past Earnings Growth Analysis

Earnings Trend: TS0U's earnings have grown by 17.8% per year over the past 5 years.

Accelerating Growth: TS0U's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TS0U had negative earnings growth (-7%) over the past year, making it difficult to compare to the REITs industry average (7.1%).


Return on Equity

High ROE: TS0U's Return on Equity (3.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is OUE Commercial Real Estate Investment Trust's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: TS0U has a high level of physical assets or inventory.

Debt Coverage by Assets: TS0U's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

Asset Level: TS0U's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if TS0U has a sufficient allowance for bad loans.

Low Risk Liabilities: TS0U reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if TS0U has an acceptable proportion of non-loan assets held.

Low Risk Deposits: TS0U has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if TS0U has an appropriate level of bad loans.


Next Steps

Dividend

What is OUE Commercial Real Estate Investment Trust's current dividend yield, its reliability and sustainability?

4.64%

Current Dividend Yield


Dividend Yield vs Market

company4.6%marketbottom25%2.5%markettop25%5.5%industryaverage5.1%forecastin3Years6.1%

Current dividend yield vs market & industry

Notable Dividend: TS0U's dividend (4.64%) is higher than the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: TS0U's dividend (4.64%) is low compared to the top 25% of dividend payers in the SG market (5.41%).


Stability and Growth of Payments

Stable Dividend: TS0U has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: TS0U has only been paying a dividend for 5 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.3%), TS0U's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TS0U's dividends in 3 years are not forecast to be well covered by earnings (114.1% payout ratio).


Next Steps

Management

What is the CEO of OUE Commercial Real Estate Investment Trust's salary, the management and board of directors tenure and is there insider trading?

0.8yrs

Average management tenure


CEO

Shu Lin Tan (46yo)

0yrs

Tenure

0

Ms. Shu Lin Tan, CFA serves as the Chief Executive Officer of OUE Commercial REIT Management Pte. Ltd., the Manager of OUE Commercial Real Estate Investment Trust and has been its Executive Director since  ...


Management Age and Tenure

0.8yrs

Average Tenure

46.5yo

Average Age

Experienced Management: TS0U's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

2.3yrs

Average Tenure

57yo

Average Age

Experienced Board: TS0U's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellS$25,62710 Jun 19
Lion Global Investors Limited
EntityCompany
Shares52,300
Max PriceS$0.49
SellS$101,50010 May 19
Lion Global Investors Limited
EntityCompany
Shares203,000
Max PriceS$0.50
SellS$60,00009 May 19
Lion Global Investors Limited
EntityCompany
Shares120,000
Max PriceS$0.50
SellS$40,35022 Apr 19
Lion Global Investors Limited
EntityCompany
Shares80,000
Max PriceS$0.51

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 91.2%.


Management Team

  • Shu Lin Tan (46yo)

    CEO & Executive Director of OUE Commercial REIT Management Pte. Ltd.

    • Elaine Cheong

      Head of Investor Relations - OUE Commercial REIT Management Pte. Ltd.

      • Lionel Chua (47yo)

        Chief Financial Officer at OUE Commercial REIT Management Pte. Ltd.

        • Tenure: 0.3yrs
      • Natalie Wong (42yo)

        Head of Treasury & Corporate Finance

        • Rodney Yeo (47yo)

          Head of Asset & Investment Management at OUE Commercial REIT Management Pte. Ltd.

          • Celine Kam

            Executive Secretary of OUE Commercial REIT Management Pte. Ltd.

            • Tenure: 7.2yrs
          • Lisa Mak

            Senior Accounts Executive of OUE Commercial REIT Management PTE Ltd

            • Thia Jackie

              Company Secretary of OUE Commercial REIT Management Pte. Ltd.

              • Tenure: 0.8yrs

            Board Members

            • Christopher James Williams (60yo)

              Deputy Chairman of OUE Commercial REIT Management Pte. Ltd.

              • Chee Ming Liu (68yo)

                Independent Non-Executive Director of OUE Commercial REIT Management Pte. Ltd

                • Shu Lin Tan (46yo)

                  CEO & Executive Director of OUE Commercial REIT Management Pte. Ltd.

                  • Yi Shyan Lee (57yo)

                    Chairman of OUE Commercial REIT Management Pte. Ltd.

                    • Tenure: 0.3yrs
                  • Lian Huat Loh (55yo)

                    Lead Independent Director of OUE Commercial REIT Management Pte. Ltd.

                    • Tenure: 2.3yrs
                  • Usha Ranee Chandradas

                    Independent Non-Executive Director of OUE Commercial REIT Management Pte. Ltd.

                    • Tenure: 2.2yrs
                  • Kian Ong

                    Independent Non-Executive Director of OUE Commercial REIT Management Pte. Ltd.

                    Company Information

                    OUE Commercial Real Estate Investment Trust's company bio, employee growth, exchange listings and data sources


                    Key Information

                    • Name: OUE Commercial Real Estate Investment Trust
                    • Ticker: TS0U
                    • Exchange: SGX
                    • Founded: 2013
                    • Industry: Diversified REITs
                    • Sector: Real Estate
                    • Market Cap: S$3.016b
                    • Shares outstanding: 5.39b
                    • Website: https://www.ouect.com

                    Number of Employees


                    Location

                    • OUE Commercial Real Estate Investment Trust
                    • 50 Collyer Quay
                    • No. 04-08, OUE Bayfront
                    • Singapore
                    • 49321
                    • Singapore

                    Listings

                    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                    TS0USGX (Singapore Exchange)YesUNITSSGSGDJan 2014

                    Biography

                    OUE C-REIT is a real estate investment trust listed on the Main Board of Singapore Exchange Securities Trading Limited since 27 January 2014.In September 2019, OUE C-REIT completed the merger with OUE Hospitality Trust to become one of the largest diversified REITs with total assets of S$6.8 billion. With seven properties across the commercial and hospitality segments in Singapore and Shanghai, OUE C-REIT’s property portfolio comprises approximately 2.2 million sq ft of prime office and retail space, and 1,640 upscale hotel rooms. OUE C-REIT invests in income-producing real estate used primarily for commercial purposes (including real estate used primarily for office and/or retail purposes) in financial and business hubs, and/or hospitality and/or hospitality-related purposes, as well as real estate-related assets. OUE C-REIT is managed by OUE Commercial REIT Management Pte. Ltd., which is a wholly-owned subsidiary of OUE Limited. 


                    Company Analysis and Financial Data Status

                    All financial data provided by Standard & Poor's Capital IQ.
                    DataLast Updated (UTC time)
                    Company Analysis2020/01/26 13:12
                    End of Day Share Price2020/01/24 00:00
                    Earnings2019/09/30
                    Annual Earnings2018/12/31


                    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.