Roxy Pacific Holdings Ltd - CIMB Research 2017-11-03: Reinvesting Into Singapore, Building Recurrent Base

Roxy Pacific Holdings Ltd - CIMB Research 2017-11-03: Reinvesting Into Singapore, Building Recurrent Base ROXY-PACIFIC HOLDINGS LIMITED E8Z.SI

Roxy Pacific Holdings Ltd - Reinvesting Into Singapore, Building Recurrent Base

  • Roxy Pacific is a pan-Asian property and hospitality group.
  • Visible development pipeline in Singapore and healthy unbilled sales from Australia.
  • Recurrent income stream from hotel and investment property portfolio
  • Roxy Pacific Share price trading at 44% discount to revalued NAV of S$1.00/share.

A pan-Asian property and hospitality group 

  • Roxy Pacific (Roxy) is a property and hospitality group with an Asia Pacific focus. Based on its 9MFY17 reported revenue, an estimated 20% of its topline was derived from recurrent sources of rental income and hotel operations and the remaining from residential development activities.

Extending residential development prospects in Singapore 

  • Roxy Pacific undertakes property development activities in Singapore, Australia and Malaysia.
  • As at 9MFY17, it had a remaining S$78m, S$328m and S$60m of unbilled locked-in sales to be recognised in these countries, respectively. 
  • In addition, the group had been actively acquiring development land in Singapore and currently has 312,379 sq ft GFA of residential landbank on the island state.

Healthy unbilled sales to be recognised in Australia 

  • Roxy has been part of the Australian property development and investment scene since 2014. At present, it has 3 ongoing projects totalling 283 units in Sydney and Brisbane. It has another 175,545 sqft of attributable land area in Sydney and Perth that can be developed into residential projects in the medium term.

Building recurrent income stream through hospitality… 

  • Roxy Pacific's recurrent income stream is derived from hotel operations and rental properties. Its hospitality portfolio comprises 657 operational rooms in Singapore and Japan, including its flagship Grand Mercure Roxy Hotel. Another 627 rooms in Japan, Perth, Maldives and Phuket are under various stages of development. 
  • Its latest acquisition was the 154-room Tenmabashi Grand Kyoto Hotel. Scheduled to be completed in Oct 17, the hotel will be managed by the group’s Noku Roxy hospitality arm.

… and investment property portfolio 

  • To further bolster its stable income base, it recently purchased an office building in Auckland together with developer Chip Eng Seng
  • Meanwhile, it is planning to recycle some capital through the sale of 59 Goulburn St office property in Australia for A$158m.

RNAV estimated at S$1.00/share 

  • Roxy Pacific has a net-debt-to-equity ratio of 0.99x as at end 3QFY17. 
  • Revalued NAV, including marking the value of its hotels to market prices, for Roxy Pacific stands at S$1.00/share compared to its 3QFY17 book value of S$0.422/share.

Target Price: N/A

LOCK Mun Yee CIMB Research | 2017-11-03
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