Wing Tai Holdings Ltd - OCBC Investment 2020-02-28: Look Beyond Short-Term Challenges

WING TAI HLDGS LTD (SGX:W05) | SGinvestors.io WING TAI HLDGS LTD (SGX:W05)

Wing Tai Holdings Ltd - Look Beyond Short-Term Challenges

  • Wing Tai's 2QFY20 results above expectations.
  • Short-term pain on sales.
  • Lower Fair Value estimate of S$2.25.



2Q20 PATMI was up 61% y-o-y.

  • Wing Tai (SGX:W05)’s 2QFY20 results were above our expectations due to lower than expected cost of sales (-29% y-o-y) and higher contributions from Le Nouvel Ardmore. 2QFY20 revenue fell 10% y-o-y to S$104.2m, while PATMI rose 61% y-o-y to S$26.0m.
  • For 1HFY20, revenue was down 5% y-o-y to S$183.5m while PATMI grew 79% y-o-y to S$32.8m.


Robust sales at The M

  • Wing Tai launched its new project, The M recently and received overwhelming responses from home buyers. Despite the fears over COVID-19, it was reported that more than 360 units or ~70% of the 552-unit project were sold at an average price of S$2450 psf over the first weekend of public preview. The strong sales were likely driven by The M’s prime location in the Core Central Region, unique work/home concept and healthy demand. This resonated with management’s earlier expectations that the impact of COVID-19 on transaction volumes likely to be temporary and property prices should remain steady in Singapore among healthy demand.
  • While the situation is more challenging in Hong Kong with some property developers cutting prices to boost sales amid social unrest and the outbreak of COVID-19, management remained confident over long-term. We believe that the transaction volumes will pick up from pent-up demand in the market, driving the recovery of Hong Kong property prices after the coronavirus situation is under controlled.


Retail business likely to see more impact from COVID-19






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2020-02-28
SGX Stock Analyst Report BUY MAINTAIN BUY 2.25 DOWN 2.27



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