Conservative land-banking stance working against Wing Tai, says Maybank

Conservative land-banking stance working against Wing Tai, says Maybank

By: 
Michelle Zhu
12/05/17, 11:41 am

SINGAPORE (May 12): Maybank Kim Eng Research continues to rate Wing Tai at “hold” following the release of the property and lifestyle group’s 3Q earnings results on Thursday, while raising its target price on the stock by 5 cents to $1.85 to factor in higher market value of the group’s listed entities, Wing Tai Malaysia and Wing Tai Properties.

(See also: Wing Tai 3Q earnings more than treble to $7.4 mil)

In a Friday report, analyst Derrick Heng says the group’s cautious land acquisition has led to land-bank depletion and poor earnings visibility, hence leading to an “unexciting performance” over the latest reporting period.  

“Wing Tai managed to sell a $15.2 million unit at Le Nouvel Ardmore in Mar’17. Two years after meeting its first QC deadline, the developer continues to hold prices at the luxury project with the latest deal done at $4,005 psf. Its mid-range JV project, The Crest, sold just seven units during the quarter,” recalls the analyst.

“With 66% of the project remaining unsold and just four months before its ABSD deadline in Sep 2017, we expect the developer to pay the associated penalty,” adds Heng.

He also notes that Wing Tai is “struggling to break even” as its low recurring income base is not enough to offset headwinds from its development business.  

“While a strong cash balance implies that it has significant capacity to purchase new development land, we believe escalating land prices has made it increasingly difficult to do so. This, together with a thin recurring income base, will lead to weak shareholder returns near term,” concludes the analyst.  

Maybank has named UOL Group as its preferred “buy” pick for sector exposure at a target price of $7.93.

As at 11:35am, shares of Wing Tai and UOL are trading at $1.87 and $7.09 respectively. 

UnUsUaL reports 32% higher FY19 earnings of $13.2 mil on improved revenue & margins

SINGAPORE (May 27): UnUsUaL Limited has reported $13.2 million in net profit for the FY19 ended March, representing a 32% increase from FY18 net profit of $10 million due to higher revenue and improved margins. Revenue for the full year rose 22.6% to $56.9 million compared to $46.4 million a year ago. The topline growth was mainly attributed to higher revenue contributions from the company’s Promotion and Others segments. In line with the higher revenue, gross profit grew by $5.1 million to $23 million for the full year, while operating expenses increased 16.6% to $6.9 million. G....
Read More >>

Bukit Sembawang sinks into the red with 4Q losses of $11.6 mil on one-off impairment, allowance

SINGAPORE (May 27): Bukit Sembawang Estates sank into the red with losses of $11.6 million for the 4Q18/19 ended March, compared to earnings of $22.0 million a year ago. This represented losses per share of 4.46 cents for 4Q18/19, compared to earnings per share of 8.48 cents in 4Q17/18. This was mainly attributable to a surge in other operating expenses to $22.0 million during the current quarter, from $1.5 million a year ago. The increase was mainly due to impairment loss of $9.7 million on property, plant and equipment relating to Fraser Residence Orchard, Singapore, and allowance o....
Read More >>

CapitaLand Mall Trust upgraded to 'buy' by UOB on Jurong Lake District plans, Funan launch

SINGAPORE (May 27): CapitaLand Mall Trust will benefit from the development of Jurong Lake District (JLD) as it has three retail malls located within Jurong Gateway, says UOB KayHian. See: CapitaLand Mall Trust declares 3.6% higher DPU of 2.88 cents on higher income IMM Building, JCube and Westgate, which in total accounts for 20% of CMT’s portfolio valuation, are located within Jurong Gateway and adjacent to Jurong East MRT station. Meanwhile, Funan, which is about 90% pre-committed for retail space and 98% pre-committed for office space, is scheduled to open next month. See als....
Read More >>