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SingHaiyi maintains steady share buyback, readies launch of two projects by end-March

Chan Chao Peh
Chan Chao Peh • 3 min read
SingHaiyi maintains steady share buyback, readies launch of two projects by end-March
SINGAPORE (Jan 14): SingHaiyi Group has been actively buying back its own shares, which have persistently traded at a significant discount to their book value. It most recently purchased 583,800 shares on Jan 8 at an average price of 8.957 cents each. Sin
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SINGAPORE (Jan 14): SingHaiyi Group has been actively buying back its own shares, which have persistently traded at a significant discount to their book value. It most recently purchased 583,800 shares on Jan 8 at an average price of 8.957 cents each. Since the start of the current share buyback mandate that took effect on July 26, 2018, SingHaiyi has bought back a total of more than 62.6 million shares.

With shares cancelled because of the buyback, SingHaiyi’s total share base has been reduced to nearly 4.27 billion shares, down from 4.3 billion shares about half a year ago. SingHaiyi’s share price has dipped from 11 cents in January 2018 to nine cents on Jan 8, 2019, which implies a market value of some $380 million, and valuation of 8.2 times historical earnings. As at Sept 30, 2018, SingHaiyi had a net asset value of 15.29 cents a share, up from 15.22 cents on March 30.

SingHaiyi is majority-owned by an entity called Haiyi Holdings, which in turn is controlled by Celine Tang, SingHaiyi’s group managing director, and her husband, Gordon Tang. On Jan 4, their level of shareholding crossed from 62% to 63% as a result of the share buybacks, which reduced the total share base.

Besides SingHaiyi, the Tangs are either linked to or in control of a few other Singapore-listed companies. Celine is chairman of another property company OKH Global as well as the largest shareholder and chairman of Chip Eng Seng Corp, one of Singapore’s leading contractors-cum-developers, having paid about $200 million to buy a 29.73% stake from existing Chip Eng Seng shareholders, including the founding Lim family.

Most of SingHaiyi’s business is in property development in Singapore, where it has both residential and commercial projects. It is also active in the US. Neil Bush, son and brother of two former US presidents, is SingHaiyi’s non-executive chairman. The company is exposed to Australia via its stake in developer Cromwell Property Group. It is also in Malaysia via a fund run by ARA.

For 2QFY2019 ended Sept 30, 2018, the company reported earnings of $7.7 million, up 44% y-o-y. The bottom line enjoyed a one-off lift of $8.1 million in deposit forfeited by buyers of a project in the US, as well as an overall higher margin mix. Revenue in the same period was down 76.8% y-o-y to $24.2 million, from $104.3 million in the year earlier quarter, which was bulked up by revenue recognised for an earlier residential project, The Vales.

The company expects to complete the redevelopment of 9 Penang Road by year-end. Formerly known as Park Mall, this project will consist of both Grade-A office units and retail space, and is seen to appeal to companies that want an Orchard Road address.

The company is more active in the residential space, though. According to its 2QFY2019 earnings announcement, it has two residential projects with a total of 330 units to be launched by the end of this calen dar quarter. They are The Gazania (formerly known as Sun Rosier) and The Lilium (formerly known as How Sun Park). The freehold projects are located near the Bartley MRT station.

Singhaiyi has a bigger residential project in the pipeline: the 1,468-unit development formerly known as Park West at 2-20 Jalan Lempeng. This 99-year leasehold development is located near the Clementi MRT station and the OneNorth R&D Park.

SingHaiyi believes the local residential market will remain “resilient” amid ongoing cooling measures, including the most recent round introduced in July. The company warns of rising interest rates, but assures investors it has a healthy pipeline of projects until 2023 in both Singapore and the US.

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