Wheellock Properties - OCBC Investment 2016-03-02: Maintained 6.0 S-cents dividend

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WHEELOCK PROPERTIES (S) LTD M35.SI 

Wheelock Properties (S) Ltd: Maintained 6.0 S-cents dividend 

• FY15 results broadly in line 
• Unchanged final dividend of 6.0 Scents 
• Firm balance sheet with net cash 

Final dividend of 6.0 S-cents proposed 

• FY15 PATMI dipped 6.5% to S$40.3m mostly due to the absence of one-time accounting gains booked in FY14 from the group’s investment in Hotel Properties Ltd (HPL), partially offset by the absence of asset write-downs for Scotts Square retail mall and the Fuyang project in China which were also booked in FY14. 
• In terms of the topline, FY15 revenue jumped 275.3% to S$371.6m; this was mainly attributed to higher contributions from the property development segment with sales from Ardmore Three and Scotts Square and the write-back of impairments made on the Panorama, partially offset by lower rental income from Scotts Square Retail. 
• The group also sold a substantial portion of its investments in quoted securities over 2015 to preserve capital, which cumulated in a significant increase in other income from S$4.0m in FY14 to S$29.1m in FY15. 
• We judge these results to be broadly in line with expectations. 
• A final dividend of 6.0 Scents (unchanged from FY14) was proposed. 

Sitting on solid balance sheet with net cash position 

• The group’s domestic residential projects – Scotts Square, The Panorama and Ardmore Three – are about 82%, 80% and 8% sold, respectively. 
• We understand that active marketing is ongoing for The Panorama and Ardmore Three, while management is mainly focused on leasing unsold units at Scotts Square. 
• Out of 271 units launched for sale at the Fuyang project in China, 171 units have been sold. 
• Wheelock Place remains 100% occupied, with a blended monthly rent of close to S$14 psf and, at Scotts Square Retail, we understand that the tenant mix revamp for level 2 is complete and active negotiations are ongoing for luxury retailers to expand their offerings. 
• Despite challenging conditions, we see the group being in a solid financial position to ride out current headwinds in the domestic residential segment and at Scotts Square mall. 
• As at end FY15, the group’s balance sheet remains healthy with S$611.6m in cash and a net cash position. 
• Maintain BUY with an unchanged S$2.27 fair value estimate. 

Eli Lee OCBC Securities | http://www.ocbcresearch.com/ 2016-03-02

OCBC Securities SGX Stock Analyst Report BUY Maintain BUY 2.27 SAME 2.27