Ho Bee: 1Q15 net profit soared 182% to $11.6m, while revenue jumped 81% to $31m from higher rental contributions from The Metropolis in Singapore and 1 St Martin’s Le Grand in London. No development revenue was recognized in the quarter, as Australian projects will only be recognized upon completion, while there were no units sold in Sentosa.
Share of associates losses was $1.3m versus nil last year, while share of JVs’ losses narrowed 66.8% to $0.3m.
Management continues to guide for a challenging Singapore residential market, though it expects support from rental income.
Maybank-KE maintains view that Ho Bee has deep value, with potential upside from any privatisation. There is strong valuation support from its office assets, which is already worth S$2.3b, based on the house’s estimates.
Ho Bee is currently trading at 0.6x P/B.
Maybank-KE reiterates its Buy call on Ho Bee with TP of $2.75, or based on a 35% discount to RNAV.
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