Singapore Property Stocks - DBS Research 2018-03-20: Catching The Fever

Singapore Property Stocks - DBS Vickers 2018-03-20: Catching The Fever Singapore Property Stocks Residential Property Sector CITY DEVELOPMENTS LIMITED C09.SI APAC REALTY LIMITED CLN.SI CHIP ENG SENG CORPORATION LTD C29.SI ROXY-PACIFIC HOLDINGS LIMITED E8Z.SI UOL GROUP LIMITED U14.SI

Singapore Property Stocks - Catching The Fever

  • Market transactions tracking above estimates.
  • Strong en bloc momentum driving demand for secondary homes.
  • Myriad of catalysts to drive prices higher.



Transactions tracking above estimates. 

  • We are only in the first three months of 2018 and transaction values are already tracking above expectations. For 2M18, unit sales (primary and secondary sales) totaled c.3,200 units (+14% y-o-y), while transaction values were significantly higher by 46%, driven mainly by the secondary market. 
  • As we approach the traditional peak period for property transactions in the coming months (c.55%-60% transacted between April-Sept in any given year), given the positive sales momentum, we believe that there is a high chance that transaction values this year will exceed our estimate (+10% y-o-y). 
  • APAC Realty (Rating: BUY, Target Price S$1.42) remains as a key proxy to projected strong sales momentum in 2018.


Foreigner demand is back; strong take-up in upcoming new launches to drive share prices higher. 

  • With The New Futura (48 units sold out of 64 units launched) as the only major project launched so far in 2018, sales momentum has been surprising strong for a luxury residential project, with close to 60% of the units sold to foreigners despite the high outlay. 
  • Looking ahead, developers are lining up project launches in the coming months.
  • Starting with The Tapestry (City Development) and Rivercove (Hoi Hup Sunway), we estimate close to 10 projects with c. 2,583 units in total will hit the market in the coming weeks, and a further 15 projects (c.9,000 units) thereafter. Strong pre-sales from these projects will be strong catalysts to drive developer stocks higher, in our view.


En bloc momentum continues; c.30,000 units in the pipeline.

  • Following on from the momentum in 2017, there was another S$5.0bn worth of en bloc sales so far in 2018 and there is more in the pipeline. Developer appetite for landbanking remains strong and there is still a significant number of sites available for purchase. 
  • We believe developer appetite will turn selective especially on the back of a pick-up in the supply pipeline, estimated at c.30,000 units to be launched over 2018-2019.


Investors are hungry for “proxies”. 

  • Our recent investor meetings imply that while property developers remain fairly well owned, most feel that it is too early to be taking profit in light of expected positive catalysts and data-points. Valuations are attractive as the sector is trading at c.0.9x P/NAV and c.0.80x P/RNAV. 
  • Our picks remain City Dev (Rating: BUY, Target Price: S$15.40) and UOL (Rating: BUY, Target Price: S$10.23). In the mid cap space, Roxy Pacific (Rating: BUY, Target Price: S$0.69) and Chip Eng Seng (Rating: BUY, Target Price: S$1.18) stand out for their attractive valuations.






Stock Reports




Derek TAN DBS Vickers | Rachel TAN DBS Vickers | http://www.dbsvickers.com/ 2018-03-20
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 15.400 Same 15.400
BUY Maintain BUY 1.42 Same 1.42
BUY Maintain BUY 1.180 Same 1.180
BUY Maintain BUY 0.690 Same 0.690
BUY Maintain BUY 10.230 Same 10.230



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