PLife – Lim and Tan

Range Of Possibilities

• Remarks by Malvinder Singh of Fortis in a BT interview on plans in Singapore, after the acceptance of Khazanah‘s offer for Parkway Holdings, are worth noting, specifically: “it makes sense to look at a reit in healthcare …. we have the largest pathology and diagnostics business in Asia outside Japan, a private company in India which we could bring in here”.

COMMENTS

1. PLife is the only “pure” healthcare reit in Singapore, or indeed in Asia-x-Japan.

2. Trying to establish and list a new reit here, made up of Indian assets, or for that matter anywhere outside of Singapore, is unlikely to “succeed” – just look at IndiaBulls (and other Indian listings here), or for that matter First Reit, comprising 4 Indon healthcare-related assets and 4 in Singapore. These have gone nowhere since listing.

3. PLife is 8 cents off its peak of $1.50 reached on Aug 2nd.

4. Malvinder’s plans aside (possibilities include buying over Parkway’s stake in PLife, currently 35.77%), Khazanah’s possible moves after the close of its offer for Parkway (such as selling Pantai hospitals to Plife) will likely sustain interest in PLife.

5. Offering 5.9% yield based on annualized DPU for Q2 (2.09 cents), PLife still looks attractive. We maintain BUY.