CFA Society Singapore
SINGAPORE (Jan 18): CIMB likes five unrated developers with market caps ranging from $140-$470 million and property development activities in Singapore and China, in the Gaobeidian area.
In a Wednesday report, lead analyst Lock Mun Yee says the five 'small but beautiful' developers -- Heeton, Lian Beng, KSH, Keong Hong and SingHaiyi -- have a good portfolio of hotel and investment properties in Singapore and overseas.
In addition, Keong Hong and Lian Beng are involved in construction activities.
Share prices of these companies are trading at 0.50-1.41 times book value and at discounts of 12-60% to RNAV, based on comparable market values of their various properties.
As these companies have spread their risk by taking associated stakes in property development projects, completed properties and hotels, their last reported net debt-to-equity ratios ranged from 0.3% to 84%.
These developers have also actively participated in the recent spate of collective sales. With the recent acquisition of the Park West en bloc site, SingHaiyi will have one of the larger Singapore residential exposures among the five companies, with a 50% share of 1.64 million sf of residential GFA once its three en bloc transactions are completed.
KSH has an attributable 493,598 sf of GFA from the Rio Casa and Serangoon Ville en bloc deals, while Heeton and Lian Beng have 167,810 sf and 210,797 sf of GFA, respectively.
SingHaiyi and Heeton stand out as having the largest investment properties by attributable GFA or hotel rooms.
SingHaiyi has an attributable share of 1.16 million sf of NLA, of which 15% is located in Singapore and the remainder in the US. Heeton has 139,115 sf of NLA and a share of 1,312 hotel rooms spread across eight operating hotels and three hotels under development in Thailand, the UK and Japan.
Keong Hong and Lian Beng's construction order books stood at $344 million and $972 million, as at Sept 2017 and Nov 2017 respectively.
Keong Hong serves as the main contractor for Parc Life executive condominium (EC) and Seaside Residences, while Lian Beng constructs largely for the public housing sector and was recently been awarded the Letter of Intent for the main contract for the Serangoon Ville redevelopment.
As at 11.14 am, shares in Heeton, Lian Beng, KSH, Keong Hong and SingHaiyi are trading at 58 cents, 76 cents, 80 cents, 62 cents and 12 cents respectively.