Yoma Strategic Holdings - OCBC Investment 2016-05-20: Fair Value Boost From Telco Towers Stake

Yoma Strategic Holdings - OCBC Investment 2016-05-20: Fair Value Boost From Telco Towers Stake YOMA STRATEGIC HOLDINGS LTD Z59.SI 

Yoma Strategic Holdings - FAIR VALUE BOOST FROM TELCO TOWERS STAKE

  • FY16 results broadly in line
  • FV gain from telco towers stake
  • FV estimate rises marginally to S$0.49



Boost from fair value gain from telco towers stake

  • FY16 PATMI increased 32.6% YoY to S$37.2m mostly due to a S$36.3m FV gain from the group’s telco towers investment and smaller losses from the agricultural segment, but partially offset by lower profits from the real estate and F&B segments, higher admin expenses and lower FV gains on investment properties. 
  • Adjusting for one-time gains, we deem these results to be in line with our expectations. 
  • In terms of the topline, FY16 revenues was fairly stable (up 0.8% YoY) at S$111.9m; while the sale of residences and LDRs declined 40.6% YoY to S$50.4m, this was compensated by growth in the group’s non-real estate segments, including the automobile, F&B, tourism and real estate rental and services businesses. 
  • Management indicated that the strong growth in the group’s non-real estate segments has added recurring income streams complementing its core real estate business, and also proposed a final cash dividend of 0.25 S-cents.


Gradual improvement in real estate business after elections

  • We understand that there was a gradual improvement in Yoma’s real estate business after the smooth transition to Myanmar’s new government after the Nov 15 elections. Zone A and B at Star City are by now almost completely sold; at Galaxy Towers (Zone C) of Star City, which comprises 954 units, 334 units have been launched of which 31 units have been sold. 
  • Rental revenues from the group’s investment properties also grew significantly to S$11.4m over the fiscal year (versus S$5.4m last year) given a larger portfolio, higher occupancies and positive rental growth. 
  • The group is targeting to grow from five KFC stores currently to 12 stores by Mar 17, and we also expect significant value creation ahead from Yoma’s stake in its growing telco towers business. 
  • Our valuation model is updated for latest assumptions and our fair value estimate rises marginally to S$0.49 from S$0.48 previously. 
  • Maintain HOLD.




Eli Lee OCBC Securities | http://www.ocbcresearch.com/ 2016-05-20
OCBC Securities SGX Stock Analyst Report HOLD Maintain HOLD 0.49 Up 0.48


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