SING HOLDINGS LIMITED
5IC.SI
Sing Holdings Ltd - Potential Earnings Recovery
- Sing Holdings - Developer with established track record spanning across all the sub-sectors.
- Potential earnings recovery with planned new residential launch.
- Foray into Australia hospitality scene may lift recurring income base.
- Trading at 0.77x P/BV and 44% below RNAV.
Long track record in property development and investment
- Founded in 1964, Sing Holdings (SING) has an established track record in property development and investment in Singapore spanning across residential, commercial and industrial sectors.
- It recently ventured into the hospitality sector through the purchase of a hotel in Melbourne.
Possible recovery in residential earnings with new launch
- Following the negative profit guidance post the sale of the balance 29 units at Robin Residences in Sep 17, residential earnings could recover with the planned launch of Parc Botannia.
- According to management, the 70%-owned 735-unit development will be launched on 11 Nov 2017 at an average selling price of S$1,280psf. Based on secondary market prices of nearby projects, such as High Park Residences’ S$1,100-1,400psf, Parc Botannia could rake in a share of S$125m in PBT when fully sold.
Maiden venture into hospitality sector could lift recurrent income
- Sing Holdings ventured into the hospitality sector through the purchase of the Travelodge Docklands in Oct 16. The property is located in the vicinity of the Southern Cross Railway Station and within minutes’ walk to Etihad Stadium, Spencer Outlet Centre, Melbourne Convention & Exhibition Centre and Crown Casino. The 291-room limited service hotel was acquired for A$107m or at A$368,000 per key. The hotel achieved average occupancy of 92.6% in 2016. This purchase could boost its recurrent income.
RNAV estimated at $0.88
- Sing Holdings' net debt to equity was at 0.91x as at end-2Q17. The group paid a DPS of 1.375 Scts in FY16. Assuming a similar quantum in FY17, this translates into a yield of c.2.8%.
- Sing Holdings' share price is currently trading at 0.77x P/BV and 44% below our RNAV estimate of S$0.88.
NOT RATED
Target Price: N/A
LOCK Mun Yee
CIMB Research
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http://research.itradecimb.com/
2017-11-03
CIMB Research
SGX Stock
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