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

YOMA STRATEGIC HOLDINGS LTD (SGX:Z59) | SGinvestors.io YOMA STRATEGIC HOLDINGS LTD (SGX:Z59)

Yoma Strategic Holdings - Ceasing Coverage

  • Yoma Strategic’s 2QFY20 revenue fell 24.6% y-o-y.
  • Disposal of investment in Grand Central Shopping Mall.
  • Cease coverage.



Net loss of US$43.3m in 2QFY20

  • 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.


Financial services and Consumer drove the growth

  • 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



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