Creo Medical Share Discussion Threads

[mikeja] 16/6/2010 16:25

All approved and in order,roll on Monday.

[longsight] 16/6/2010 10:10

Eddie - check out the listing document. CREO has no residential property at all. What do Nomura say about Office & retail property? On retail, it is a certain fact that there is significant wage inflation in PRC now - there are any number of articles on this. It is also a fact that consumption in PRC is growing at a faster rate than the rest of the economy - I believe at 18% pa. On the Office aspect, I think Shanghai rents are 1/4 of HK - yet PRC Gov intends to develop Shanghai into a financial centre to compete with other international finance centres. It is noted by many commentators that PRC is right at the beginning of a financial services boom as newly prosperous chinese start to save for retirement. Add in the specific quality & locations of CREO's portfolio & the hi quality management & my conclusion is that you are incorrect.

[eddie1980] 16/6/2010 09:35

Well, Nomura doesn't quite agree with your outlook for Chinese property prices in general this morning.



Predicting 20% falls in next 12-18 months - says residential prices to income at multiples of 13,14.

On flip side, I don't think CREO does have that much exposure to residential (if any?). Per the listing document, about 77% of space is one building - city centre - which is two 30 odd storey office blocks with retail space joining the two towers.

However, any fall of that magnitude is likely to cause problems for retail, as it will be consumers that have sufferred. Article also comments that may have knock on effects for development loans.

[longsight] 16/6/2010 08:48

Flip - I'm not sure why Singapore investor will value the new co by reference to the old CREO. It has a new name, different corporate governance set-up - pretty much organised entirely for the benefit of shareholders. Furthermore there are considerable prospects for growth in NAV & rents with the refurbishment & development programes as well as the underlying trend of rent increases in Shanghai. The hi % of retail property in the portfolio looks very useful. With hi wage inflation in PRC & the policy of stimulating internal consumption, retail looks a big winner. My guess is that Singapore will put its own valuation on the newco & value it in line with comparables in Singapore / HK. Will help if stock markets remain bouyant on Monday so as to get the stock off to a good start.

[flip101] 15/6/2010 20:44

Someone has been absorbing all the loose stock over the last few weeks. Any UK holders who wanted to sell at this level would have done so pre-listing. Looking very very good for Monday. I expect an easy 10-20% from the start. There will just be no sellers in this kind of range.

[eddie1980] 15/6/2010 16:41

Well thats it then I think - all going well, I think shares are suspended from 7am tomorrow if the Jersey court agrees whatever they have to.

The listing document is quite something - for the nervous amongst u, there are 26 or so pages of risks they want you to take account of!

[hac29600] 15/6/2010 13:24

Vondutch
Thanks for the reply. My broker has sorted it out as well now. Capita registrars told me if they did not get instructions to hold electronically you would be sent a certificate in TCT. So if you want to sell you would have to get somebody to accept a transfer in - I didnt fancy that at all. From experience if anything is out of the ordinary they cannot be bothered.

[mikeja] 15/6/2010 05:49

The TCT listing document gives a NAV of S$954m at 31st March 2010.Divided by 240m units the underlying undiluted asset value is S$3.975 per unit,equivalent to £9.64 per CREO share.

[flip101] 14/6/2010 22:19

The currency effects are hard to account for. The end of year report states an IFRS NAV of £8.67/share however the TCT prospectus states a NAV of 968m SGD or $4.03/unit.

This however was struck at the year end GBPSGD spot of 2.257 which has fallen to about 2.05 since. On the other hand you have the RMB strengthing vs GBP hence pushing the GBP NAV up since the report.

4.00 SGD/unit sounds about right after currency moves. I think TCT will be publishing a quarterly NAV which may add more detail. I expect retail and commercial valuations to have firmed since year-end.

[mikeja] 14/6/2010 22:10

Wading is the word,can anyone find the NAV ps stated anywhere?
It seems to be S$4.00 per TCT unit.Equivalent to £9.71 per Creo share.

[longsight] 14/6/2010 08:19

Flip - thanks for responses. I am slowly wading through the listing document & concur that the prospects for increased rents & lower loan costs looks very good.

Regards LS

[flip101] 13/6/2010 23:07

Game on:

Conference next Tuesday in Singapore:

[flip101] 13/6/2010 22:59

Regarding operating profit CREO has had poor legacy rental rates, especially at CC. Fortunately many of these 3-year leases are expiring and the rental uplift will begin to show through this year. Furthermore, a key tenant is taking up much of the retail space in CC at 25% of market rates. CREO plan to facilitate a move to full market rates here (bring in new tenants). On top of this, the new financing of CC and the development component is very good indeed.

You'll see much better operational figures in 2 years.

My view is the share will rerate to 75-90% of IFRS NAV which I guess is now close to £10 following the strong currency move since 31/12/09. It will then take better operational performance to generate a more full valuation at a premium to NAV.

New TCT url nearly set up:

[longsight] 12/6/2010 23:14

Concerning my post 782, these questions are erroneous. I have now checked this point & found that the performance fee for TCT will be charged on a new basis i.e. a simple 4% pa of Net Property income. This appears to be in line with the performance fees charged by other Trustee managers on REITs. Obviously far preferable to the previous arrangement. Apologies for being such a dunce.

On the question of looking at comparable REITs with PRC commercial property portfolios, clearly most appear to be trading at or reasonably close to NAV but I wonder whether most of these are making a profit. CREO has failed to make any real profits over the last 3 years. Will this prove to be a factor in its rating in Singapore? The markets might still rate it at a discount to NAV whilst it is still making a small loss. The other question I have regarding how highly this will rate in Singapore is to what extent CREO have done a good job in promoting TCT to investors there & therefore what demand there will be for the stock. Hopefully stock markets will continue to be more stable - I think this will really help to see the shares off to a good start.

Interesting to know how many intend to hold long term - it seems to me that all things being equal, the NAV & rental income shd both be materially higher by 2012 with the refurbishment programme & the completion of the City Centre Extension project.

Good to hear the views of other posters.

regards LS

[vondutch] 11/6/2010 13:23

hac29600
Have account with TDWaterhouse I will use instead. As far as I am aware (not having traded SGX stocks using it before) there are no forms I need to fill in. For international exchanges TD Waterhouse only requires a form to trade US stocks. I did have to sign something for each overseas exchange, but I did that through their website...

Hope that helps

[newswseller] 11/6/2010 11:15

Just added a few more, might add a few more on tuesday which is the last trading day

[longsight] 11/6/2010 08:00

Flip - thanks for your response. Much appreciated.

[flip101] 10/6/2010 22:59

longsight - In line with market but still not ideal. I'm here to play the valuation gap so not too bothered about the performance fee structure now that FX moves are excluded.

Someone picking up all the loose stock in the market. Bodes well for Singapore on the 21st.

[longsight] 10/6/2010 08:59

Be great if someone more knowledgeable about REITs cd give me some response to the above post. I will contact Sarah Moriaty & the Chairman this morning & get some guidance, though I wd guess that these fees probably are in line with market rates.

I did buy a further 10,000 this morning at £4.23. [Trade not showing yet]. Takes my holding to 30,000 total. So obviously, I am pretty bullish on CREO.

[longsight] 09/6/2010 19:56

As I have posted previously, I now have a position in CREO of 20,000 shares & am looking forward to the Singapore listing on 21 June. I am slogging through various comparatives & also the listing document.

I have a few genuine questions about the performance fees. I understand that these are charged at 20% on gains on NAV of above 8% to 20% and then at 25% on gains in NAV above 20%. There is no fee for gains in NAV solely derived from exchange rate changes.

My questions are:

1 Is it typical for REITs to incur these fees?
2 If so, are the rates charged in line with market rates?

I do not ask these questions negatively but purely out of ignorance & wd appreciate any responses. Thanks.

EDIT: I have simplified the above questions since I remeber now that THCL take 50% of any performance fee in newly issied shares & therefore the Co. shd be able to pay the rest of any such fee from its rental income.

[young dro] 08/6/2010 19:30

Thanks LBO

[young dro] 08/6/2010 18:06

My take on it is that a CDP account is only necessary if you wish to trade the shares. Obviously you will at some point however I don't think it is necessary to have an account immediately. It depends how desperately you want to trade the stock straight away.