Wing Tai

Wing Tai: CIMB upgrades to Hold with TP $1.88. The house notes that with Wing Tai’s more attractive valuation following the sell-off over the past three months and in view of its strong finances, upgrade its rating from Reduce to Hold. Although RNAV-based target price is lower as the house raise its discount rate to 30% due to Wing Tai’s high-end exposures in Singapore, increase its FY14-15 EPS forecasts by 25-33% to account for the earlier recognition of its Tembusu project. While lacklustre sales of high-end Singapore developments and Wing Tai’s depleting landbank will continue to pressurize earnings, the company has a strong balance sheet and an attractive valuation at 0.47 P/BV.