Creo Medical Share Discussion Threads

[flip101] 22/3/2010 19:53

Only going one way chaps and that's not down.

[flip101] 19/3/2010 23:28

Will be nice to finally get rid of REO and bring the majority shareholders down to a reasonable stake. The capital structure will look balanced enough post tender offer.

Results on Tuesday.

[jambo172] 18/3/2010 12:21

Why anyone would tender who doesn't have to defies belief.
REO have to, few others do.
Shares price should rally back up to over 360p initially.

The big price mover is when they move to Singapore.
AIM is NOT where they need to be.
Apparently similar companies in the far east trade at or around parity.
CREO still on 70% discount.

Would be surprised if the price didn't move up in the next few weeks.

[flip101] 16/3/2010 21:55

Looking good.

The placing shares are not going to contacts of the Irish boys but institutions looking to take advantage of a distressed seller.

Can't see many others tendering shares expect REO and 1 other and then we'll have a much more balanced capital structure and be trading at 340p with a NAV of £12 (post buy back).

[lbo] 09/3/2010 09:23

IRISH-controlled property development company China Real Estate Opportunities returned to profitability last year and saw the value of its property portfolio increase by 4%.

[kramch] 08/3/2010 19:00

The wording is a bit vague, (the company) "is also seeking to procure third party purchasers...or to purchase those shares itself." Seems they have given themselves complete freedom. I guess they want to see sufficient shares into friendly hands to maintain control of their lucrative management contract.

I don't know what Singapore thinks of listed companies being managed by separate corporate entities with conflicting agendas? Hopefully they can learn from the unsatisfactory experiences on AIM (SDIC, CPT etc) K.

[kimboy2] 08/3/2010 16:32

They tender at 330p because they can't sell in quantity at that price.

The share price fell because they are placing the teender shares at 330p. I also notice that Matrix are picking up £2.25m for organising it.

Any views on a Business trust on Singapore ?

[kramch] 08/3/2010 13:10

I have a small holding here and am evaluating whether to increase significantly.

So I'm trying to work out why the share price fell today. Results are in line with expectations, the Singapore listing application is confirmed and a tender for 9% of the shares should see the share price rise?

Why would holders tender at 330p when the market share price is higher? - is this primarily to get the big holders, REO etc out, or at least reduced? "Treasury Holdings..and concert parties..had an equity interest of not less than 50%". Does Singapore not like this?
Why would they want to tender if they can realise close to NAV (c. £10) in 12 months?
I can see the management structure and the '08 grab of £44M in "performance fees" must be contributing to the big discount, but is this going to change?

Lastly I am surprised that the gross rents on the investment portfolio valued at £712M, is only £29M = 4%, are these typical Shanghai yields?

I'm finding more questions than answers here. K.

[lbo] 08/3/2010 10:22

China Real Estate Opportunities (CREO) published its preliminary FY09 results this morning, revealing a 14% decline in EPRA NAV to £11.37 per share. The decline was largely driven by currency movements and was loaded in the first half, with the second half seeing a 7% increase in the NAV from £10.62 per share at the half year stage. The portfolio was valued at £837m (CNY9.2bn), down 8% yoy (although up 4% in CNY and 7% in sterling in H209). Rental income was stable in local currency (up 11% yoy in sterling), as the company achieved rental uplifts of up to 5% on the investment portfolio, which offset a lower average occupancy of 85%. The company has strengthened its capital position through the refinancing of the Treasury Building and the disposal of some of its non-core assets. As at 31 December 2009, the company reported gearing of 34% on total assets and 44% on the investment assets, with cash of £48 million. The company has made a submission to the Singapore Exchange to convert to a Singapore Business Trust, which, if successful, would see it delist from AIM. This morning, it has also published a tender offer to existing shareholders, to purchase shares at £3.30 per share, committing a maximum of £15m in cash. Real Estate Opportunities (REO), which holds c.17% of the shares, has "irrevocably undertaken to tender its shares". The closing date for the tender is on Monday, March 22 2010.

[hieronymous1] 24/2/2010 09:40

Chinese commercial property to outpace region

By Sundeep Tucker in Hong Kong

Published: February 23 2010 17:25 | Last updated: February 23 2010 17:25

The value of commercial real estate in key Chinese cities is forecast to grow significantly this year amid a sluggish outlook for the rest of Asia-Pacific, according to a new study.

Beijing, Shanghai and Hong Kong should post increases of between 7 per cent and 12 per cent in 2010 while capital values of office buildings in Tokyo, Seoul and Mumbai are expected to fall, said Jones Lang LaSalle, the property consultants.

Property experts believe that China's strong economic growth will fuel continued demand for commercial real estate among local groups that are scrambling to grab space for their own occupation or to rent out to foreign companies.

The projected rise comes despite a forecast spike of close to 50 per cent in the supply of office space in Beijing and Shanghai by 2012.

Rental values of commercial real estate in Shanghai are also forecast to climb by up to 10 per cent this year, underpinned by hosting the Expo, although fresh supply is expected to keep Beijing rentals flat in 2010.


PS I have looked for the original study without success.

[weflyhigh] 20/2/2010 21:27

Looking good.

[lbo] 16/2/2010 22:50

China Real Estate Opportunities - Refocus on valuation

Feb 16th 2010 - Edison Investment Research today published a report on China Real Estate Opportunities entitled "Refocus On Valuation". In summary, the report says:

Operational initiatives continue to enhance revenues and portfolio values. However, CREO has also revealed plans designed directly to tackle the current NAV discount. Its first proposal is to apply up to £15m of the sales proceeds of the recent disposal of Tangdao Bay towards a buy-back of a material stock overhang. The second is a switch to the Singapore Stock Exchange, closer to a local investor base familiar with the dynamics of PRC commercial property. It expects this to help the valuation trend towards the underlying assets.

[flip101] 14/2/2010 21:04

Buyers in the market on Friday.

[flip101] 12/2/2010 14:35

Should be an exciting 6 months.

[flip101] 08/2/2010 10:39

Treasury happy with China operation
07 February 2010 By Richard Curran

Last June, the net asset value (NAV) of a share in China Real Estate Opportunities (CREO), the Treasury Holdings-backed Asian property play, was stg£10.62. Its shares were trading at stg£3.60. Even now the company's shares, trading on London's Alternative Investment Market (AIM), are trading at a 70 per cent discount to their net asset value. Somebody is right and somebody is wrong about the value of the company.

Last week, CREO issued a trading update which bolstered its case that the market has got it wrong. A recent valuation report conducted by DTZ Debenham Tie Leung raised the value of the group's property portfolio by 4 per cent in local currency terms to stg£837 million.

CREO's biggest play is its City Centre Shanghai complex. It has three other Shanghai locations and logistics centres in Beijing.

The company has agreed to sell its Tangdao Bay investment ata10.9percent premium to its valuation which will result in stg£33.8 million in net cash going to the group. According to managing director Richard David, this was done to get additional money in the bank and to focus the portfolio on the Shanghai area.

Many commentators express concerns that China is a property bubble waiting to burst. Property prices in Hong Kong remain close to 2007 levels and there has been no property crash in the region.

David said that first, property prices in China are coming off a relatively low base and are nowhere near Hong Kong levels. Second, he points out that much of the talk of property bubbles relates to the residential property market and not commercial real estate.

An acid test of the health of the property market is occupancy rates and rents. According to CREO, during 2009 it had 212 lease expiries, representing 50 per cent of its entire tenancy base. Around 55 per cent of those leases were renewed and 60 new tenants, equal to 28 per cent of lease expiries, entered into lease arrangements.

This left the CREO portfolio with an 85 per cent occupancy rate at the end of 2009.

This was down around 6 per cent on a year ago, but according to the company average daily rent per square metre increased by between 2 per cent and 5 per cent.

David said this was due to the strong presence in retail that the group has, with the Chinese consumer showing strong resilience to any downturn.

He also said that CREO has 70 people working on the ground in China to maximise its potential. He also said that bringing a bit of western know-how to asset management, something still relatively new in China, can bring about very good results.

CREO is in negotiations to refinance the equivalent of $450 million of debt. Around $350 million of this falls due later this year and a further $100 million is due in June of next year. David said the company had made ''significant progress'' in the first phase of re-financing discussions.

''The company remains confident that significant interest remains from a number of local and regional banks to fulfil the company's refinancing requirements in 2010," he said.

David added that CREO is looking at seeking a listing on the Singapore stock market later this year.

''We have done a lot of the research and we are ready to talk to shareholders about it," he said.

He said this move would place the company closer to its area of operations and give Asian investors in particular a chance to invest in the company.

Shares in CREO were trading at stg3.51 in London last week. This gives the group a market capitalisation of stg£174 million. Johnny Ronan and Richard Barrett's Treasury Holdings, together with the investment vehicle Real Estate Opportunities, control around 56 per cent of the Chinese operation, with the rest in free float.

[lbo] 06/2/2010 18:07

Treasury Holdings-backed Creo may list on Singapore exchange

[lbo] 05/2/2010 16:27

Trading statement indicates 4% appreciation in portfolio valuation



CREO has this morning issued a trading statement for the period ending December
2009 in which it indicates a 4% (7.35% in sterling) appreciation in its property
portfolio since the half-year stage. The independent valuation of RMB9.188bn
(£837m) excludes the recent Tangdao Bay disposal. Despite a challenging year on the office leasing front, the company recorded an occupancy rate of 85% (excluding space under refurbishment) – similar to the halfyear stage. However, gross rental income increased by 5% for the city centre office site, 2% for city centre retail and 3% for central plaza in the six months. Rental income for the treasury building remained unchanged. The company's cash position at year-end – including the proceeds from the Tangdao Bay disposal – was £75m. This is in line with our expectations. Given the current property valuations, proposed tender offer and stabilisation in tenancies, we should see further correction in the penal c.65% discount to NAV. Furthermore, the company notes its intention to pursue an Asian listing -– specifically Singapore – within the next six months to widen its investor audience. Following the successful refinancing of the treasury building facility, the company is also confident that significant interest remains to fulfil its refinancing requirements in 2010.

[lbo] 05/2/2010 11:59

CREO assets do well in a tough year

[flip101] 03/2/2010 19:01

December NAVs should be out soon.

[flip101] 02/2/2010 06:54

Thanks for these articles Hieronymous