Wing Tai: Management meeting takeaways:
Though sales in the luxury market remains lackluster, management has resisted price cuts. Both projects have received TOP, and sales will directly impact earnings. Relaxation of policy measures is unlikely till late this year, this is the largest upside risk to the stock.
Wing Tai does not believe it will take impairment charges on their high end projects, givne market prices remain above breakeven prices. That said, management has started discounting units at The Crest. With ASPs at ~1,600, the project may be at risk for impairment charges, as Deutsche estimates breakeven prices at $1480 psf.
Management reiterated commitment to maintaining a strong dividend policy, and has paid dividends even during loss making years.
Deutsche maintains Buy call for Wing Tai, which is currently trading at 42% discount to Deutsche's RNAV of $3.05.
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