Tuesday, February 5, 2013

Wing Tai

Wing Tai: Strong set of 2Q12 results, which was ahead of estimates. Rev at $321.8m, +73% yoy and +29% qoq and net profit at $88.7m, +159% yoy and +23.2% qoq. Result brings 1H12 rev to $568.9m, +93% yoy and net profit to $160.7m, +171% yoy. Strong results was on the back of rev recognized from the progressive sales of Foresque Residences and L’VIV as well as the additional units sold in Helios Residences and Belle Vue Residences in SG were the main contributors to the higher rev for the current period. Grp’s share of profits from associates and JV’s , +59% yoy to $79.6m, primarily attributable to the higher contribution from Wing Tai Properties in Hong Kong. Going forward, grp will continue to monitor the property market closely and will at appropriate times launch new residential projects for sale in the current yr. Deutsche note that While no guidance on launch timelines was provided, Deutsche expect mgt to launch its Tampines site this year with the Ardmore projects likely to be deferred. Grp was awarded the tender for the site in Shanghai Baoshan District last Nov and will continue to explore investment opportunities in the markets it operates. We note that grp’s overall fundamentals remain strong, with net gearing at just 0.17x, and valuations are undemanding, with grp trading at just 0.65x P/B. Ratings as follows: Deutsche maintains Hold with $2.03 TP, on back of deteriorating visibility. Maybank-KE maintains Buy with $2.55 TP, on back of attractive valuations. CIMB maintains UnderPerform with $1.85 TP, more negatives to come

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