Wing Tai (W05.SG) is up 0.6% at $1.65, in line with the broader market after reporting 2QFY11 net profit of $53.9 million, up 142% on-year, on revenue of $197.8 million, up 13% on-year. 

DMG, which has a Buy rating with a $2.20 target, says the results were within expectations; the strong performance was underpinned by higher contributions from three domestic residential projects and an improved performance from its 35%-owned HK associate.

The house says 1H PATMI accounts for 54.8% its FY11 estimate, while net gearing improved to 0.31X from 0.44X at 1QFY11. While DMG continues to favor office landlords within the property space, it says since the government’s cooling measures Wing Tai has fallen 7.9% (compared with the sector’s 5.8%):

 

“The stock is now trading at an attractive 25% discount to its RNAV, compared to the sector’s 12% discount. We see the recent pullback as a good opportunity to buy into an established developer with low-cost and quality high-end inventory.” 

 

Resistance is tipped at $1.68.