Wing Tai

Wing Tai: 4QFYJun13 results ahead of consensus, on strong devt profits and one-off gains. Net profit was $275.8m, +72% yoy, driven by devt profits, as profits were recognized from additional units in Helios & Belle Vue, Verticas (all profits were booked upon TOP this FY), Foresque and L’VIV. Wing Tai declared a total dividend of 12¢ (including 9¢ special), implying 5.9% yield. For FY13, Wing Tai sold 538 units in SG, Msia and China, with total sales value of $885m (vs 463 units in FY12 with sales value of $725m). Occupancy for Wing Tai’s invmt properties improved yoy (97% in SG). Balance sheet remained solid with gearing declining to 0.15x. Wing Tai has sold 65% (220 units) at Tembusu at $1,550 psf and aims to launch the Prince Charles Crescent site at yr end. Nevertheless, mgt remains cautious on the residential outlook, saying it could shy from bidding in new state land tenders in 2H, given that the property cycle in Singapore is in its 8th or 9th year of upcycle. Valuation are undemanding at 0.6x P/B and 41% discount to Deutsche’s RNAV, but the house believes Wing Tai remains vulnerable to a slowdown in the residential market and its wider-than-avg NAV discount could persist with activity likely to remain muted, particularly with its depleting landbank. Deutsche keeps its Hold rating with TP $2.24 (from $2.19), based on an unchg 35% discount to RNAV.