Singapore and emerging market real estate

Royston Foo

Equity Bottom-Up

Bukit Sembawang Estates / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/17987" target="_blank" data-smartkarma-citation="entities:17987:1">Bukit Sembawang Estates (BS SP)</a> (“BSEL”) reported its 2Q FY19 financial results last evening. No major surprises with the strong set of financial results, but take-up rate at 8 St Thomas fell short of expectations. At current pricing, take-up rate is likely to remain weak going forward. The completion of the acquisition of Katong Park Towers will drive BSEL’s gearing higher over the next financial quarter. Net debt-to-equity is expected to surge from the current 4% to around 20%-25% going forward.One of the key investment thesis for BSEL earlier was the potential earnings driver from the launch of 8 St Thomas and a potential bumper dividend payout for this current financial year. But this investment thesis no longer holds anymore with the expected weak take-up for 8 St Thomas. As such, a premium valuation over peers cannot be justified anymore. A 30% discount to RNAV has now been ascribed to BSEL, translating to a fair value of S$5.57 per share. With just 2.6% upside, I am downgrading BSEL to HOLD.

Bukit Sembawang Estates (BS SP) (“BSEL”) reported its 2Q FY19 financial results last evening. No major surprises with the strong set of financial results, but take-up rate at 8 St Thomas fell short of expectations. At current pricing, take-up rate is likely to remain weak going forward. The completion of the acquisition of Katong Park Towers will drive BSEL’s gearing higher over the next financial quarter. Net debt-to-equity is expected to surge from the current 4% to around 20%-25% going forward.One of the key investment thesis for BSEL earlier was the potential earnings driver from the launch of 8 St Thomas and a potential bumper dividend payout for this current financial year. But this investment thesis no longer holds anymore with the expected weak take-up for 8 St Thomas. As such, a premium valuation over peers cannot be justified anymore. A 30% discount to RNAV has now been ascribed to BSEL, translating to a fair value of S$5.57 per share. With just 2.6% upside, I am downgrading BSEL to HOLD.

Bukit Sembawang – Good Earnings but No More Catalyst in Sight; Downgrade to HOLD

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

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Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

<ul>
<li>The IMF maintain its cumulative 5.0% 2018 GDP growth projection for Indonesia, Malaysia, the Philippines, Singapore and Thailand. Individual forecasts range from 2.9% for Singapore (vs. 2.1% Adv. Avg) to 6.5% for the Philippines (vs. 6.5% Emer. Avg.)</li>
<li>With a 4.8% growth forecast for 2019, the IMF has previously advised ASEAN to best navigate changing economic landscapes by managing uncertainty, making economies more inclusive and preparing for the digital revolution.</li>
<li>Following a FTSE Value-Stocks ASEAN Index rebalance effective 22 Oct, City Dev, UOL Group &amp; Bukit Sembawang Estates have joined the Index. The Index has outperformed broader FTSE ASEAN Indices in the 2018 YTD, &amp; three-year period to 30 Sep. </li>
</ul>


The IMF maintain its cumulative 5.0% 2018 GDP growth projection for Indonesia, Malaysia, the Philippines, Singapore and Thailand. Individual forecasts range from 2.9% for Singapore (vs. 2.1% Adv. Avg) to 6.5% for the Philippines (vs. 6.5% Emer. Avg.)
With a 4.8% growth forecast for 2019, the IMF has previously advised ASEAN to best navigate changing economic landscapes by managing uncertainty, making economies more inclusive and preparing for the digital revolution.
Following a FTSE Value-Stocks ASEAN Index rebalance effective 22 Oct, City Dev, UOL Group &amp; Bukit Sembawang Estates have joined the Index. The Index has outperformed broader FTSE ASEAN Indices in the 2018 YTD, &amp; three-year period to 30 Sep. 


ASEAN 2018 Growth Forecast Maintained; Value Index Extended Lead

Top Singapore property news this week that you need to know:1) <a href="https://www.smartkarma.com/entities/9984" target="_blank" data-smartkarma-citation="entities:9984:1">OUE Ltd (OUE SP)</a> announced the sale of the office component of OUE Downtown to its 55.9%-owned <a href="https://www.smartkarma.com/entities/912" target="_blank" data-smartkarma-citation="entities:912:1">Oue Commercial Real Estate Investment Tr (OUECT SP)</a>  for S$908 mil (S$1,713 psf)2) <a href="https://www.smartkarma.com/entities/13301" target="_blank" data-smartkarma-citation="entities:13301:1">Ara Asset Management (ARA SP)</a> ’s potential acquisition of Manulife Centre for S$550 mil or S$2,300 psf NLA3) Laguna Park launching its collective sale tender, asking for S$1.48 bil4) More new residential launches in the weeks ahead, after the hungry ghost festival5) Weekly performance of stocks under coverage

Top Singapore property news this week that you need to know:1) OUE Ltd (OUE SP) announced the sale of the office component of OUE Downtown to its 55.9%-owned Oue Commercial Real Estate Investment Tr (OUECT SP)  for S$908 mil (S$1,713 psf)2) Ara Asset Management (ARA SP) ’s potential acquisition of Manulife Centre for S$550 mil or S$2,300 psf NLA3) Laguna Park launching its collective sale tender, asking for S$1.48 bil4) More new residential launches in the weeks ahead, after the hungry ghost festival5) Weekly performance of stocks under coverage

Singapore Property Weekly Recap (8th Sep to 14th Sep) – Billion Dollar Enbloc; Office Transactions

<a href="https://www.smartkarma.com/entities/17987" target="_blank" data-smartkarma-citation="entities:17987:1">Bukit Sembawang Estates (BS SP)</a> (“BSEL”) reported its 1Q FY19 financial results this evening. The good set of results was within expectations as earnings were underpinned by the healthy sales and progressive revenue recognition of the 2 new project launches over the past one year (Watercove and Nim Collection Phase 1).Below is the highlight of BSEL’s 1Q FY19 financial results.Profit &amp; Loss<ul>
<li>Revenue jumped 312.5% YOY to S$65.4 mil in 1Q. Strong revenue growth was attributable to revenue…</li>
</ul>

Bukit Sembawang Estates (BS SP) (“BSEL”) reported its 1Q FY19 financial results this evening. The good set of results was within expectations as earnings were underpinned by the healthy sales and progressive revenue recognition of the 2 new project launches over the past one year (Watercove and Nim Collection Phase 1).Below is the highlight of BSEL’s 1Q FY19 financial results.Profit &amp; Loss
Revenue jumped 312.5% YOY to S$65.4 mil in 1Q. Strong revenue growth was attributable to revenue…


Bukit Sembawang – Strong 1Q FY19 Results; Outlook Remains Positive

A small-cap Singapore developer with privatisation potential that has gone under the radar is <a href="https://www.smartkarma.com/entities/3498" target="_blank" data-smartkarma-citation="entities:3498:1">Sing Holdings (SING SP)</a> (“SHL”). SHL has a market capitalization of S$164.4 mil and the implied price-to-book valuation of SHL is 0.64x. RNAV estimate of SHL is S$0.95 per share and ascribing a discount of 30%, fair value of SHL is pegged at S$0.66 per share. Upside potential is attractive at 62%. Recent share price correction, weaken property market outlook and the potential for SHL to increase its cash hoard by 3.5x within 3 years could provide a compelling angle for the controlling Lee Family to privatise SHL. Insiders have been actively buying shares in the company since the beginning of the year.Initiate coverage on Sing Holdings with a BUY rating.

A small-cap Singapore developer with privatisation potential that has gone under the radar is Sing Holdings (SING SP) (“SHL”). SHL has a market capitalization of S$164.4 mil and the implied price-to-book valuation of SHL is 0.64x. RNAV estimate of SHL is S$0.95 per share and ascribing a discount of 30%, fair value of SHL is pegged at S$0.66 per share. Upside potential is attractive at 62%. Recent share price correction, weaken property market outlook and the potential for SHL to increase its cash hoard by 3.5x within 3 years could provide a compelling angle for the controlling Lee Family to privatise SHL. Insiders have been actively buying shares in the company since the beginning of the year.Initiate coverage on Sing Holdings with a BUY rating.

Sing Holdings – A Potential Privatisation Candidate in the Making?

Singapore

Bukit Sembawang Estates Limited, through its subsidiaries, operates in property development, property mortgage financing, and the holding of properties and investments. The Company provides residential property development throughout Singapore.

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Bukit Sembawang Estates (BS SP)

Bukit Sembawang – Good Earnings but No More Catalyst in Sight; Downgrade to HOLD

Bukit Sembawang Estates (BS SP) (“BSEL”) reported its 2Q FY19 financial results last evening. No major surprises with the strong set of financial...

Royston Foo

ASEAN 2018 Growth Forecast Maintained; Value Index Extended Lead

The IMF maintain its cumulative 5.0% 2018 GDP growth projection for Indonesia, Malaysia, the Philippines, Singapore and Thailand. Individual...

Singapore Exchange Ltd (SGX)

Singapore Property Weekly Recap (8th Sep to 14th Sep) – Billion Dollar Enbloc; Office Transactions

Top Singapore property news this week that you need to know:1) OUE Ltd (OUE SP) announced the sale of the office component of OUE Downtown to its...

Royston Foo

Bukit Sembawang – Strong 1Q FY19 Results; Outlook Remains Positive

Bukit Sembawang Estates (BS SP) (“BSEL”) reported its 1Q FY19 financial results this evening. The good set of results was within expectations as...

Royston Foo

Sing Holdings – A Potential Privatisation Candidate in the Making?

A small-cap Singapore developer with privatisation potential that has gone under the radar is Sing Holdings (SING SP) (“SHL”). SHL has a market...

Royston Foo

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