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Singapore Property Developers & Inventories - CIMB Research 2018-01-18: Small Is Beautiful II

Property Developers & Inventories - CIMB Research 2018-01-18: Small Is Beautiful II Singapore Property Stocks Property Developers HEETON HOLDINGS LIMITED 5DP.SI LIAN BENG GROUP LTD L03.SI SINGHAIYI GROUP LTD. 5H0.SI KEONG HONG HOLDINGS LIMITED 5TT.SI KSH HOLDINGS LIMITED ER0.SI

Property Developers & Invetories - Small Is Beautiful II

  • Heeton Holdings Limited, Keong Hong Holdings Limited, KSH Holdings Limited, Lian Beng Group Ltd and SingHaiyi Group Ltd have strong underlying net asset values and are trading at discounts of 12-61% to their marked-to-market asset values.
  • SingHaiyi has one of the larger exposures to Singapore residential in the sector, with a 50% share of 1.64m sq ft of residential GFA, including the Park West collective sale.
  • Heeton has a sizeable hotel portfolio of 1,312 hotel rooms in Thailand, UK and Japan.
  • Lian Beng and Keong Hong’s construction order books stood at S$972m and S$344m, as at Nov 2017 / Sep 2017 respectively.



Featuring another 5 small-cap developers 



Healthy balance sheets 

  • Share prices of these companies are trading at 0.50-1.41x P/BV (latest announced BV) and at discounts of 12-60 % to RNAV, based on comparable market values of their various properties. 
  • As these companies have spread their risk by taking associated stakes in property development projects, completed properties and hotels, their last reported net debt-to-equity ratios ranged from 0.3% to 84%.


Boosting Singapore residential exposure 

  • These companies actively participated in the recent spate of collective sales. 
  • With the recent acquisition of the Park West en bloc site, SingHaiyi will have one of the larger Singapore residential exposures among the five companies, with a 50% share of 1.64m sq ft of residential GFA once its three en bloc transactions are completed. 
  • KSH Holdings has an attributable 493,598 sq ft of GFA from the Rio Casa and Serangoon Ville en bloc deals, while Heeton and Lian Beng have 167,810 sq ft and 210,797 sq ft of GFA, respectively.


Rental and hotel income provide a recurring base 

  • SingHaiyi and Heeton stand out as having the largest investment properties by attributable GFA or hotel rooms. 
  • SingHaiyi has an attributable share of 1.16m sq ft of NLA, of which 15% is located in Singapore and the remainder in the US. 
  • Heeton has 139,115 sq ft of NLA and a share of 1,312 hotel rooms spread across eight operating hotels and three hotels under development in Thailand, the UK and Japan.


KHHL and LBG involved in construction activities 

  • Keong Hong and Lian Beng have more exposure to construction activities. Keong Hong’s and Lian Beng’s construction order books stood at S$344m and S$972m, as at Sep 2017 / Nov 2017 respectively. 
  • Keong Hong serves as the main contractor for Parc Life executive condominium (EC) and Seaside Residences, while Lian Beng constructs largely for the public housing sector and was recently been awarded the Letter of Intent for the main contract for the Serangoon Ville redevelopment.


Highlighted Companies 


Heeton Ltd 


Keong Hong Holdings Ltd 


KSH Holdings Ltd 


Lian Beng Group Ltd 


SingHaiyi Group Ltd 








LOCK Mun Yee CIMB Research | Colin TAN CIMB Research | http://research.itradecimb.com/ 2018-01-18
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