SingHaiyi Group - RHB Invest 2017-12-27: Ceasing Coverage

SingHaiyi Group - RHB Invest 2017-12-27: Ceasing Coverage SINGHAIYI GROUP LTD. 5H0.SI

SingHaiyi Group - Ceasing Coverage

  • SingHaiyi has been expanding its geographical presence, with the recent acquisition of a small stake in Australia-listed Cromwell Property Group. The company has also been active in Singapore’s en-bloc market, with the acquisition of two sites in recent months. 
  • A strong recovery in the Singapore and US property markets could potentially boost share price performance. That said, we are ceasing coverage on this counter due to a redistribution of internal resources. 
  • Our last recommendation was BUY, with a TP of SGD0.14.

Expanding its regional presence. 

  • SingHaiyi recently announced that it has subscribed for 61m units of stapled securities in Australia-listed Cromwell Property Group (Cromwell) for AUD59.1m (SGD 60.1m), representing a stake of 3.45%. 
  • The units were purchased at a 4.9% discount to Cromwell’s one- month volume weighted average price (VWAP). The move is aimed at further diversifying its regional presence and to strengthen its recurring income base.

Actively replenishing Singapore landbank. 

  • The company has also been active in the Singapore en-bloc market, with the acquisition of a 50% stake each in How Sun Park and Sun Rosier condominiums. The total purchase prices for these projects are SGD81m and SGD271m respectively. 
  • The acquisition is likely to be funded by the proposed renounceable non- underwritten rights issue (one rights share for every two ordinary shares), which is expected to raise gross proceeds of SGD143.5m.

Bulk sale of Vietnam Town Phase II project. 

  • The divestment of the project to an unrelated third party is to be done at a total cash consideration of USD95.3m (SGD128.3m). The commercial condominium development project in San Jose, California, comprises nine blocks of commercial condominium units and a four- storey parking structure. 
  • The divestment is expected to be completed by 30 Sep 2018 and is expected to have a positive impact on the company’s NAV and EPS.

Vijay Natarajan RHB Invest | 2017-12-27
RHB Invest SGX Stock Analyst Report CEASE Maintain BUY 0.140 Same 0.140