UOL GROUP LIMITED (SGX:U14)
CAPITALAND LIMITED (SGX:C31)
CITY DEVELOPMENTS LIMITED (SGX:C09)
Property Development & Inventory - Aug Sales Holding Up
- URA data showed that Aug home sales of 1,167 units were flat m-o-m while year to Aug sell through levels were ahead of last year’s quantum.
- We expect sales volume of c.9,000-10,000 units and 0-3% price hike in 2019.
- Maintain sector Overweight.
- Our top picks are UOL GROUP LIMITED (SGX:U14), CAPITALAND LIMITED (SGX:C31) and CITY DEVELOPMENTS LIMITED (SGX:C09).
Robust home sale activity in Aug
- Singapore developers sold a total of 1,167 new residential units in Aug 19 (+82% y-o-y, -25% m-o-m), inclusive of 45 executive condominium units. Excluding the latter, volume sales would have been 82% higher y-o-y but down c.5% m-o-m. The lower number of transactions translates into a sell through rate of 1.15x, based on the 979 units launched.
- Suburban home sales made up 67% of total transactions with Parc Clematis, Florence Residences and Treasure at Tampines being the most popular projects, in terms of transaction volume.
Year to Aug volumes make up 60-70% of our 2019 projection
- Year to Aug sales total of 6,755 units was ahead of the same period last year by 4.3%. We anticipate Sep volume sales to continue to be robust given the increased new launch activity such at the Avenue South Residences, Meyer Mansion and The Antares.
- We maintain our expectation for sales volume to reach c.9,000-10,000 units for 2019, fairly flat on a y-o-y basis.
Private home prices to remain range-bound on ample supply
- According to the Urban Redevelopment Authority (URA) property price index, primary home prices ticked up 1.3% q-o-q in 2Q19, led by city fringe projects, and are 0.6% higher than the 4Q18 level.
- We think private residential prices would remain range-bound in the near term given ample supply from new launches and retain our projection for a 0-3% price hike for 2019.
Maintain Overweight; top picks UOL, CapitaLand, City Developments
- We leave our Overweight stance on Singapore developers unchanged, given the current attractive valuations of 45% discount to RNAV.
- A near-term catalyst would be good sell-through rates for new launches while downside risks would be weaker macroeconomic outlook which would dampen appetite for big-ticket purchases.
LOCK Mun Yee
CGS-CIMB Research
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https://www.cgs-cimb.com
2019-09-16
SGX Stock
Analyst Report
8.480
SAME
8.480
4.150
SAME
4.150
10.660
SAME
10.660
