Yoma Strategic Holdings - OCBC Investment 2019-11-20: Ceasing Coverage

YOMA STRATEGIC HOLDINGS LTD (SGX:Z59)

Yoma Strategic Holdings - Ceasing Coverage

YOMA STRATEGIC (SGX:Z59)’s 2QFY20 revenue fell 24.6% y-o-y to US$22.3m, dragged by Real estate development and Automotive & heavy equipment, and partially offset by Financial Services and Consumer. See Yoma Strategic Announcements.
Net income, however, turned red from US$29.9m in 2QFY19 to a loss of US$43.3m this quarter, mainly due to lower revenue contribution and other income loss, as well as higher finance expenses as a result of higher borrowings, rising interest rates and the adoption of new accounting standard SFRS 16.

On a segment basis, Real Estate Development’s 2QFY20 revenue decreased by 68% y-o-y to US$5.26m due to low percentage of completion (~7-24%) from City Loft@StarCity. As Yoma Strategic recognises revenue based on the percentage of completion method, unrecognized revenue from the sales of City Loft amounted to more than US$16.0m.
For Automotive & Heavy Equipment, the decline in 2QFY20’s revenue (-12.5% y-o-y) was due to lower tractor and implements sold under the New Holland business, partially offset by revenue from Volkswagen vehicle sales.
Separately, Yoma Strategic’s Financial Services and Consumer segment continued to grow, which reported 6.7% and 148.5% y-o-y revenue growth to US$1.6m and US$8.2m, respectively. The Consumer segment also saw additional revenue contribution from new subsidiaries such as YKKO and KOSPA this quarter.
Moving forward, Yoma Strategic is actively looking to recycle capital from its non-core assets. One potential target is the Grand Central Shopping Mall.
Management noted that discussion on the disposal of its investment in the Grand Central Shopping Mall in Dalian, China is on-going.
See Yoma Strategic Share Price; Yoma Strategic Analyst Reports.

Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2019-11-20

SGX Stock Analyst Report NOT RATED CEASE HOLD 99998 SAME 0.510