Wee Hur Holdings Ltd - CIMB Research 2018-01-04: Gaining Traction In Australia

Wee Hur Holdings Ltd - CIMB Research 2018-01-04: Gaining Traction In Australia WEE HUR HOLDINGS LTD. E3B.SI

Wee Hur Holdings Ltd - Gaining Traction In Australia

  • Diversified construction and property firm with operations in Singapore and Australia.
  • Construction order book stood at S$304m on 30 Sep 2017.
  • Company expects contributions from Parc Botannia and Mega@Woodlands in FY18F.
  • Building recurrent income stream via student housing venture in Australia.
  • Trading at 0.70x P/BV as at end-Sep 2017 and 48% below RNAV.

Construction and property firm in Singapore and Australia 

  • Wee Hur’s (WHUR) core businesses are construction, property development and dormitory operations in Singapore. It also ventured into the overseas property development and investment business in 2014 with the acquisition of three land parcels totaling 1.69 hectares in Brisbane, Australia. 
  • As at end-3Q17, WHUR had a construction order book of S$304m, comprising mainly residential and industrial projects.

Parc Botannia and Mega@Woodlands earnings likely in FY18F 

  • A total 230 units of the 30%-owned Parc Botannia were sold at an average selling price of S$1,280psf during the first weekend launch on 11 Nov 2017. 
  • Wee Hur (WHUR) also expects to recognise profit from Mega@Woodlands project upon receiving the temporary occupation permit (TOP), which it expects in FY18F. 35% of the industrial project’s 512 units had been sold at 13 Nov 2017.

First Australian condo project launched 

  • The company’s foray into Australia began with the purchase of three plots of land in Brisbane for A$51.3m in Dec 14. The group is developing Park Central One, a 168-unit condo project that was launched in mid-2017. 
  • According to management, the project has an estimated GDV of A$90m and would reap profits when completed in 2019F.

Expanding student housing footprint in Australia 

  • The company expects its first purpose-built student accommodation (PBSA) development, which will consist of 1,578 beds in Brisbane, to be completed in 1H18F.
  • Wee Hur (WHUR) intends to undertake PBSA developments in Australia through a private trust by developing a portfolio of up to 5,000 beds in major cities, thereby generating rental income. 
  • The group is currently developing two other smaller PBSAs with total of 1,690 beds in Brisbane and Adelaide.

Company estimates potential gain of A$7m from sale Brisbane land 

  • In Dec 2017, the group entered into a put and call option agreement to sell its 5,478 sq m land parcel fronting Ann Street and Turbot Street within the CBD in Brisbane. The proposed sale could reap an estimated net gain of A$7m, according to the company.

Trading at 0.63 P/BV and 54% discount to RNAV 

  • Net-debt-to-equity ratio stood at 0.18x as at end-Sep 2017. 
  • Wee Hur’s (WHUR) paid a DPS of 0.6 Scts in FY16. 
  • The stock is currently trading at 0.70x to its book NAV of S$0.37 and at a 48% discount to RNAV of S$0.50. RNAV is based on the latest market transacted prices.

Colin TAN CIMB Research | http://research.itradecimb.com/ 2018-01-04
CIMB Research SGX Stock Analyst Report NOT RATED Maintain NOT RATED 99998 Same 99998

* This Eyes On the Ground report represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.