Oxley

Oxley: OSKDMG initaites coverage on Oxley with a RNAV-derived TP of $0.91 which represents a 44% potential upside return and recommend BUY. Oxley was listed three years ago as a boutique developer of residential projects. Post listing, the group diversified across all segments of the real estate market, launching some 28 projects that have since been substantially sold out. The group’s success can be attributed to its dynamic management and strong ability to execute projects. $1.1b of surplus from Singapore projects. Oxley has chalked up over $700m of surplus for its Singapore development projects, which will be recognized over the next 2-3 years. In addition, the house expect its first hospitality project, The PINEs, to generate a surplus of SGD380m and a recurring income stream of SGD35m upon completion. Since last year, Oxley has amassed an overseas portfolio of 13 prime sites in Malaysia, the UK, China and Cambodia. It has launched two projects, Royal Wharf in the UK and The Bridge in Cambodia, achieving $1bn of pre-sales to be booked over the next 2-3 years. The sustained momentum in upcoming launches could extend earnings visibility into FY18 and beyond. The house value, and the valuation surplus accruing from its local and overseas projects and apply a 20% discount to its RNAV to derive a TP of $0.91. Initiate coverage with a BUY rating.