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)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

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.

Equity Bottom-Up

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For the 5 trading sessions that spanned Apr 1 to 7, the Straits Times Index (STI) declined 0.1 per cent, with the FTSE China A50 Index gaining 1.0 per cent, the Hang Seng Index declining 0.4 per cent and the FTSE Bursa Malaysia KLCI adding 1.0 per cent.

Overall, institutions were net sellers over the 5 sessions with S$124 million of net outflow. DBS Group Holdings, UOB, Yangzijiang Shipbuilding, OCBC, and Singapore Press Holdings led the net institutional outflows for the 5 sessions through to Apr 7.

Meanwhile, City Developments, Mapletree North Commercial Asia Trust, Singapore Exchange, Singapore Telecommunications and Sembcorp Industries received the highest net institutional inflows for the 5 sessions. This brings total net institutional inflows in the 2022 year to Apr 7 to S$1.0 billion. Share buybacks

There were 16 primary-listed stocks conducting share buybacks over the 5 sessions with a total consideration of S$13.2 million, up from S$11.9 million for the preceding week. OCBC, Hong Fok Corporation and Raffles Medical Group led the buyback consideration tally. The trio were also the 3 stocks which lodged the highest buyback consideration over the preceding 5 sessions.

OCBC paid an average price of S$12.34 per share, Hong Fok paid an average price of 88.1 cents per share, while Raffles Medical Group paid an average price of S$1.16 per share. As of Apr 7, Hong Fok had bought back 0.71 per cent of its shares (excluding treasury shares) on the current share buyback mandate.  Director and substantial shareholder transactions

The 5 trading sessions saw close to 90 changes to director interests and substantial shareholdings filed for more than 30 primary-listed stocks. This included 7 company director acquisitions with no disposals filed, while substantial shareholders filed 5 acquisitions and 4 disposals.

SinoCloud Group

On Apr 4, SinoCloud Group substantial shareholder Terence Joe Lam Cho Ying sold in aggregate 3,437,557,250 shares of the Catalist-listed company to Zhang Dai. Of the 3,437,557,250 shares, 2,209,952,100 shares were held directly by Lam and 1,227,605,150 shares were held by Alternus Capital, a company wholly-owned by Lam.

Dai increased his total interest in SinoCloud Group from 1.6 per cent to 23.3 per cent, while Lam reduced his total interest in the company from 27.0 per cent to 5.3 per cent.

SinoCloud announced on Apr 6, that the group had obtained continuing support from Lam and Alternus Capital, to enable the group to operate as a going concern and to meet its obligations as and when they fall due.

In view of this share disposal, the management of the company has also reached out to Zhang to engage in further discussions with him, in particular, whether he intends to furnish the financial support to the group. The company will provide updates to shareholders in due course, including but not limited to, the board's assessment of the going concern of the company.

Olam Group

On Apr 6, Olam Group non-executive and independent director Nihal Kaviratne acquired 152,800 shares of the company at S$1.77 per share and consideration of S$270,456. He maintains a 0.01 per cent direct interest in Olam Group. This followed his acquisition of 133,100 shares at S$1.79 per share on Mar 28.

Kaviratne was previously the chairman and CEO for the Unilever group across Asia, Europe and Latin America. His career with the Unilever Group spanned 40 years which also covered senior level management positions in sales, marketing, brand and strategic planning and development. Kaviratne is also a director of GlaxoSmithKline Pharmaceuticals and StarHub.

From March 15, Olam Group has replaced Olam International as the listed company. Olam Group directly holds Olam Food Ingredients, Olam Agri and Olam Global Holdco which owns Olam Ventures, and Olam Technology and Business Services as separate subsidiaries.

As maintained by the chairman non-executive and independent director, Lim Ah Doo, this structure allows the group to explore the sequential sale, spin-off or IPO of Olam Food Ingredients, Olam Agri and potentially the other businesses of the group.

Hong Fok Corporation

On Apr 1, Hong Fok Corporation executive director and joint-CEO Cheong Sim Eng acquired 80,000 shares of the listed company for a consideration of S$70,400 at an average price of 88.0 cents per share. He maintains a 20.08 per cent total interest in Hong Fok, gradually increasing his total interest in the property developer from 19.06 per cent as at the end of 2018.

His preceding acquisitions were on March 1, with 42,000 shares acquired at 74.0 cents per share and November 20, 2020, with 64,500 shares acquired at an average price of 70.7 cents per share.

Cheong is principally involved in the group's overall operations and management with greater emphasis in Singapore. He has over 37 years of experience in the property development business.

Hong Fok is an investment holding company whose subsidiaries are primarily engaged in property investment, property development and construction, property management, investment trading and investment holding and management. Despite the ongoing Covid-19 pandemic, the group returned to profitability in FY21 (ended Dec 31).

With tourism arrivals and tourism receipts remaining weak in 2021, revenue from the group's hotel investment property, YOTEL Singapore Orchard Road made only a small contribution to the group's revenue.

However, the group reported an uptick in sales revenue from its residential units in Concourse Skyline. This saw Hong Fok report an attributable net profit of S$38.9 million in FY21 compared to a loss of S$8.7 million in FY20.

Amos Group

Between Mar 30 and 31, Amos Group AMOS Group : 49B 0% executive chairman Kyle Shaw acquired 237,400 shares of the company at an average price of 19.9 cents per share. With a consideration of S$47,156, this increased his deemed interest in the company from 80.77 per cent to 80.90 per cent. This followed his acquisition of 465,000 shares of at an average price of 17.2 cents per share between Mar 28 and 29.

Shaw is the founder and managing partner of ShawKwei &amp; Partners, an international private equity fund manager investing in mid-market industrial and service businesses across Asia, the US, and Europe.

Huationg Global

On Mar 30, Huationg Global executive director and CEO, Patrick Ng Kian Ann acquired 200,000 shares of the Catalist-listed company at an average price of 9.7 cents per share. With a consideration of S$19,400, this increased his total interest in the company from 69.33 per cent to 69.44 per cent.

Ng has 20 years of experience in the civil engineering construction industry and is responsible for the overall management, strategic planning and oversees the business expansion of the group.

Huationg Global is principally engaged in the provision of civil engineering services for infrastructure projects and ancillary inland logistics support services.

On Mar 1, Huationg Global reported the group's FY21 (ended 31 Dec) revenue increased by approximately S$54.4 million or 47.0 per cent to S$170.4 million from S$116.0 million in FY20, mainly due to a higher level of business activities in its business segments after some easing measures from the Circuit Breaker.

The group is also involved in the sale of construction materials such as sand and granite aggregates, recycled concrete aggregate and liquefied soil stabiliser.

Hafary Holdings

On Mar 31, Hafary Holdings non-independent non-executive director Eric Low See Ching acquired 98,400 shares of the company at 19.0 cents per share. With a consideration of S$18,696, this further increased his direct interest in the company from 25.36 per cent to 25.38 per cent.

Mr Low was appointed as the non-independent non-executive director of Hafary Holdings in January 2014. Prior to this appointment, he served in the board as executive director and in the company as CEO. He joined the main subsidiary of the company, Hafary Pte Ltd, in 2000, and rose through the ranks from sales executive to CEO in 2005.

Low is also presently the executive director and deputy CEO of Oxley Holdings and an alternate director of Aspen (Group) Holdings.

Hafary Holdings is a leading building material supplier that has been defining living spaces with premium products. With over 5,000 products sourced from around the world, the group maintains it carries the largest collection of surfacing materials in Singapore.

One of the questions received in connection with the company's Annual Report 2021 pertained to whether the group had been affected by supply chain disruptions, particularly from shipping.

The group replied that as it sources its raw materials from various countries, some of its operations have been affected by such global supply change disruptions, and the group continues to monitor the situation and will make the appropriate announcements in the event that such disruptions are material. Inside Insights is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/hong-fok-continues-buybacks-as-joint-ceo-raises-stake-0"> read </a>the original version.
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    Share buyback


For the 5 trading sessions that spanned Apr 1 to 7, the Straits Times Index (STI) declined 0.1 per cent, with the FTSE China A50 Index gaining 1.0 per cent, the Hang Seng Index declining 0.4 per cent and the FTSE Bursa Malaysia KLCI adding 1.0 per cent.

Overall, institutions were net sellers over the 5 sessions with S$124 million of net outflow. DBS Group Holdings, UOB, Yangzijiang Shipbuilding, OCBC, and Singapore Press Holdings led the net institutional outflows for the 5 sessions through to Apr 7.

Meanwhile, City Developments, Mapletree North Commercial Asia Trust, Singapore Exchange, Singapore Telecommunications and Sembcorp Industries received the highest net institutional inflows for the 5 sessions. This brings total net institutional inflows in the 2022 year to Apr 7 to S$1.0 billion.  Share buybacks

There were 16 primary-listed stocks conducting share buybacks over the 5 sessions with a total consideration of S$13.2 million, up from S$11.9 million for the preceding week. OCBC, Hong Fok Corporation and Raffles Medical Group led the buyback consideration tally. The trio were also the 3 stocks which lodged the highest buyback consideration over the preceding 5 sessions.

OCBC paid an average price of S$12.34 per share, Hong Fok paid an average price of 88.1 cents per share, while Raffles Medical Group paid an average price of S$1.16 per share. As of Apr 7, Hong Fok had bought back 0.71 per cent of its shares (excluding treasury shares) on the current share buyback mandate.   Director and substantial shareholder transactions

The 5 trading sessions saw close to 90 changes to director interests and substantial shareholdings filed for more than 30 primary-listed stocks. This included 7 company director acquisitions with no disposals filed, while substantial shareholders filed 5 acquisitions and 4 disposals.

SinoCloud Group

On Apr 4, SinoCloud Group substantial shareholder Terence Joe Lam Cho Ying sold in aggregate 3,437,557,250 shares of the Catalist-listed company to Zhang Dai. Of the 3,437,557,250 shares, 2,209,952,100 shares were held directly by Lam and 1,227,605,150 shares were held by Alternus Capital, a company wholly-owned by Lam.

Dai increased his total interest in SinoCloud Group from 1.6 per cent to 23.3 per cent, while Lam reduced his total interest in the company from 27.0 per cent to 5.3 per cent.

SinoCloud announced on Apr 6, that the group had obtained continuing support from Lam and Alternus Capital, to enable the group to operate as a going concern and to meet its obligations as and when they fall due.

In view of this share disposal, the management of the company has also reached out to Zhang to engage in further discussions with him, in particular, whether he intends to furnish the financial support to the group. The company will provide updates to shareholders in due course, including but not limited to, the board's assessment of the going concern of the company.

Olam Group

On Apr 6, Olam Group non-executive and independent director Nihal Kaviratne acquired 152,800 shares of the company at S$1.77 per share and consideration of S$270,456. He maintains a 0.01 per cent direct interest in Olam Group. This followed his acquisition of 133,100 shares at S$1.79 per share on Mar 28.

Kaviratne was previously the chairman and CEO for the Unilever group across Asia, Europe and Latin America. His career with the Unilever Group spanned 40 years which also covered senior level management positions in sales, marketing, brand and strategic planning and development. Kaviratne is also a director of GlaxoSmithKline Pharmaceuticals and StarHub.

From March 15, Olam Group has replaced Olam International as the listed company. Olam Group directly holds Olam Food Ingredients, Olam Agri and Olam Global Holdco which owns Olam Ventures, and Olam Technology and Business Services as separate subsidiaries.

As maintained by the chairman non-executive and independent director, Lim Ah Doo, this structure allows the group to explore the sequential sale, spin-off or IPO of Olam Food Ingredients, Olam Agri and potentially the other businesses of the group.

Hong Fok Corporation

On Apr 1, Hong Fok Corporation executive director and joint-CEO Cheong Sim Eng acquired 80,000 shares of the listed company for a consideration of S$70,400 at an average price of 88.0 cents per share. He maintains a 20.08 per cent total interest in Hong Fok, gradually increasing his total interest in the property developer from 19.06 per cent as at the end of 2018.

His preceding acquisitions were on March 1, with 42,000 shares acquired at 74.0 cents per share and November 20, 2020, with 64,500 shares acquired at an average price of 70.7 cents per share.

Cheong is principally involved in the group's overall operations and management with greater emphasis in Singapore. He has over 37 years of experience in the property development business.

Hong Fok is an investment holding company whose subsidiaries are primarily engaged in property investment, property development and construction, property management, investment trading and investment holding and management. Despite the ongoing Covid-19 pandemic, the group returned to profitability in FY21 (ended Dec 31).

With tourism arrivals and tourism receipts remaining weak in 2021, revenue from the group's hotel investment property, YOTEL Singapore Orchard Road made only a small contribution to the group's revenue.

However, the group reported an uptick in sales revenue from its residential units in Concourse Skyline. This saw Hong Fok report an attributable net profit of S$38.9 million in FY21 compared to a loss of S$8.7 million in FY20.

Amos Group

Between Mar 30 and 31, Amos Group AMOS Group : 49B 0% executive chairman Kyle Shaw acquired 237,400 shares of the company at an average price of 19.9 cents per share. With a consideration of S$47,156, this increased his deemed interest in the company from 80.77 per cent to 80.90 per cent. This followed his acquisition of 465,000 shares of at an average price of 17.2 cents per share between Mar 28 and 29.

Shaw is the founder and managing partner of ShawKwei &amp; Partners, an international private equity fund manager investing in mid-market industrial and service businesses across Asia, the US, and Europe.

Huationg Global

On Mar 30, Huationg Global executive director and CEO, Patrick Ng Kian Ann acquired 200,000 shares of the Catalist-listed company at an average price of 9.7 cents per share. With a consideration of S$19,400, this increased his total interest in the company from 69.33 per cent to 69.44 per cent.

Ng has 20 years of experience in the civil engineering construction industry and is responsible for the overall management, strategic planning and oversees the business expansion of the group.

Huationg Global is principally engaged in the provision of civil engineering services for infrastructure projects and ancillary inland logistics support services.

On Mar 1, Huationg Global reported the group's FY21 (ended 31 Dec) revenue increased by approximately S$54.4 million or 47.0 per cent to S$170.4 million from S$116.0 million in FY20, mainly due to a higher level of business activities in its business segments after some easing measures from the Circuit Breaker.

The group is also involved in the sale of construction materials such as sand and granite aggregates, recycled concrete aggregate and liquefied soil stabiliser.

Hafary Holdings

On Mar 31, Hafary Holdings non-independent non-executive director Eric Low See Ching acquired 98,400 shares of the company at 19.0 cents per share. With a consideration of S$18,696, this further increased his direct interest in the company from 25.36 per cent to 25.38 per cent.

Mr Low was appointed as the non-independent non-executive director of Hafary Holdings in January 2014. Prior to this appointment, he served in the board as executive director and in the company as CEO. He joined the main subsidiary of the company, Hafary Pte Ltd, in 2000, and rose through the ranks from sales executive to CEO in 2005.

Low is also presently the executive director and deputy CEO of Oxley Holdings and an alternate director of Aspen (Group) Holdings.

Hafary Holdings is a leading building material supplier that has been defining living spaces with premium products. With over 5,000 products sourced from around the world, the group maintains it carries the largest collection of surfacing materials in Singapore.

One of the questions received in connection with the company's Annual Report 2021 pertained to whether the group had been affected by supply chain disruptions, particularly from shipping.

The group replied that as it sources its raw materials from various countries, some of its operations have been affected by such global supply change disruptions, and the group continues to monitor the situation and will make the appropriate announcements in the event that such disruptions are material.  Inside Insights is a weekly column on The Business Times, read the original version.



Hong Fok continues buybacks as joint-CEO raises stake

Bukit Sembawang Estates / Equity Bottom-Up

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<ul>
<li>
January ’22 private home sales +3.5% MoM and was highest level of Jan month sales since 2014 (with exception of 2021). This built on the record 2021 sales, which was the highest in 8 years. 
	 </li>
	<li>
While the sector has posted c. 3% YTD and rallied c. 29% off the lows seen in March ’20 (start of COVID-19 pandemic), it is still c . 23% below the last peak seen in 2018. Sector’s P/B are currently -1 S.D. below the historical mean. 
	 </li>
	<li>The most actively traded real estate stocks with Singapore property exposure average YTD total return is relatively flattish, as compared to the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. 7 of the 10 stocks with are currently trading below their 5-year historical average P/B ratios.</li>
</ul>
 

Jan ’22 Private Home Sales +3.5%and Above Historical Jan Month Sales in 2014-2020 
According to data from Urban Redevelopment Authority (URA), Singapore saw sale of 673 new private homes excl. executive condominiums (ECs) (+3.5% MoM, -58.8% YoY) in Jan ’22 and represented the highest level of Jan sales in 2014-2020. Private homes sales in the month was largely in the Rest of Central Region (RCR) and Outside Central Region (OCR). New private home sales in 2021 was at over 13,000 units and represented the highest number since 2013. Prices in 2021 posted a 10.6% YoY gain, which was the highest since 2010. 
To recap, on 15 December, the Government announced a package of measures to cool the private homes and HDB resale markets where additional buyer’s stamp duty (ABSD) rates were raised and total debt servicing ratio (TDSR) threshold and HDB LTV limit for loans were tightened. 
In the recently announced Budget 2022, residential properties marginal property tax rates will be raised in two steps starting with the tax payable in 2023. The rates from 2024 are:

<ul>
<li>
Non-owner-occupied residential properties (inc. investment properties) will see property tax rates increased to 12-36% (vs. current 10-20%).</li>
	<li>Concurrently, property tax rates for owner-occupied homes for portion of annual value in excess of S$30,000 will also be raised to a range of 6-32% (vs. 4-16% currently).</li>
</ul>
 Real Estate Developers &amp; Operators Sector +3% YTD but still 23% Below 2018 Peak 
Looking at the sector performance, the iEdge SG Real Estate Developers &amp; Operators Index has posted c. 3% price gains in the YTD, and c. +29% off the lows in March ’20 (at the start of the COVID-19 pandemic). The index is still c. 23% below the last peak seen in 2018. 
The iEdge SG Real Estate Developers &amp; Operators Index is a free-float, market capitalization-weighted index that measures the performance of listed real estate developers and operators in Singapore.
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 <img src='https://api2.sgx.com/sites/default/files/2022-02/Capture%201_2.PNG' alt='iEdge SG Real Estate Developers' />
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 <div class='content-caption'>iEdge SG Real Estate Developers</div>
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<html><body>Sector P/B Trading -1 S.D. Below Mean 
The sector’s P/B ratio is at 0.44x (vs. historical mean of 0.59x) and also -1 S.D. below the historical mean. This is close to the level last seen during the start of the pandemic in March ’20, where there was a broad-based market correction and well below the levels see in 2017.</body></html>

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 <img src='https://api2.sgx.com/sites/default/files/2022-02/Capture_14.PNG' alt='iEdge SG Real Estate Developers' />
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 <div class='content-caption'>iEdge SG Real Estate Developers</div>
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Most Actively-Traded SGX Stocks with Singapore Real Estate Exposure 
The top actively traded SGX listed stocks with Singapore real estate exposure posted a YTD total returns of -0.4%, which compares with the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. City Developments will report its FY21 results before the open on 25 Feb, UOL will report its CY21 results on 28 Feb, and Ho Bee Land will report after the 28 Feb close.  
These names have an average dividend yield of 2.7% with an average 0.6x P/B ratio. Of the 10 names with 5-year trading history, 7 of them currently have P/B ratios that are below 5-year P/B averages.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock Name 
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			5Y Avg. P/B
			</td>
			<td>
			P/B
			</td>
			<td>
			Div Yield (%)
			</td>
			<td>
			2022 YTD Total Return 

			%
			</td>
		</tr>
<tr>
<td>
			City Developments
			</td>
			<td>
			C09
			</td>
			<td>
			6,657
			</td>
			<td>
			0.9
			</td>
			<td>
			0.8
			</td>
			<td>
			1.1
			</td>
			<td>
			7.8
			</td>
		</tr>
<tr>
<td>
			UOL Group
			</td>
			<td>
			U14
			</td>
			<td>
			6,164
			</td>
			<td>
			0.7
			</td>
			<td>
			0.6
			</td>
			<td>
			2.1
			</td>
			<td>
			3.0
			</td>
		</tr>
<tr>
<td>
			Frasers Property
			</td>
			<td>
			TQ5
			</td>
			<td>
			4,358
			</td>
			<td>
			0.6
			</td>
			<td>
			0.5
			</td>
			<td>
			1.8
			</td>
			<td>
			-0.9
			</td>
		</tr>
<tr>
<td>
			Ho Bee Land
			</td>
			<td>
			H13
			</td>
			<td>
			1,892
			</td>
			<td>
			0.5
			</td>
			<td>
			0.5
			</td>
			<td>
			3.5
			</td>
			<td>
			2.2
			</td>
		</tr>
<tr>
<td>
			GuocoLand
			</td>
			<td>
			F17
			</td>
			<td>
			1,810
			</td>
			<td>
			0.5
			</td>
			<td>
			0.4
			</td>
			<td>
			4.0
			</td>
			<td>
			1.3
			</td>
		</tr>
<tr>
<td>
			Wing Tai Holdings
			</td>
			<td>
			W05
			</td>
			<td>
			1,367
			</td>
			<td>
			0.4
			</td>
			<td>
			0.4
			</td>
			<td>
			1.7
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			Bukit Sembawang
			</td>
			<td>
			B61
			</td>
			<td>
			1,292
			</td>
			<td>
			1.0
			</td>
			<td>
			0.9
			</td>
			<td>
			0.8
			</td>
			<td>
			-0.4
			</td>
		</tr>
<tr>
<td>
			OUE
			</td>
			<td>
			LJ3
			</td>
			<td>
			1,150
			</td>
			<td>
			0.4
			</td>
			<td>
			0.3
			</td>
			<td>
			1.5
			</td>
			<td>
			-2.9
			</td>
		</tr>
<tr>
<td>
			Oxley Holdings
			</td>
			<td>
			5UX
			</td>
			<td>
			759
			</td>
			<td>
			1.1
			</td>
			<td>
			0.8
			</td>
			<td>
			1.4
			</td>
			<td>
			-4.8
			</td>
		</tr>
<tr>
<td>
			PropNex
			</td>
			<td>
			OYY
			</td>
			<td>
			629
			</td>
			<td>
			N.A.
			</td>
			<td>
			6.6
			</td>
			<td>
			5.6
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			Tuan Sing Holdings
			</td>
			<td>
			T24
			</td>
			<td>
			547
			</td>
			<td>
			0.4
			</td>
			<td>
			0.4
			</td>
			<td>
			1.3
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			APAC Realty
			</td>
			<td>
			CLN
			</td>
			<td>
			229
			</td>
			<td>
			N.A.
			</td>
			<td>
			1.4
			</td>
			<td>
			8.1
			</td>
			<td>
			-10.4
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			                          2.7
			</td>
			<td>
			-0.4
			</td>
		</tr>
</tbody></table>
 Source: SGX, Refinitiv, Bloomberg (Data as of 18 February 2022).
</body></html>





January ’22 private home sales +3.5% MoM and was highest level of Jan month sales since 2014 (with exception of 2021). This built on the record 2021 sales, which was the highest in 8 years. 
	 
	
While the sector has posted c. 3% YTD and rallied c. 29% off the lows seen in March ’20 (start of COVID-19 pandemic), it is still c . 23% below the last peak seen in 2018. Sector’s P/B are currently -1 S.D. below the historical mean. 
	 
	The most actively traded real estate stocks with Singapore property exposure average YTD total return is relatively flattish, as compared to the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. 7 of the 10 stocks with are currently trading below their 5-year historical average P/B ratios.

 

Jan ’22 Private Home Sales +3.5%and Above Historical Jan Month Sales in 2014-2020  
According to data from Urban Redevelopment Authority (URA), Singapore saw sale of 673 new private homes excl. executive condominiums (ECs) (+3.5% MoM, -58.8% YoY) in Jan ’22 and represented the highest level of Jan sales in 2014-2020. Private homes sales in the month was largely in the Rest of Central Region (RCR) and Outside Central Region (OCR). New private home sales in 2021 was at over 13,000 units and represented the highest number since 2013. Prices in 2021 posted a 10.6% YoY gain, which was the highest since 2010.  
To recap, on 15 December, the Government announced a package of measures to cool the private homes and HDB resale markets where additional buyer’s stamp duty (ABSD) rates were raised and total debt servicing ratio (TDSR) threshold and HDB LTV limit for loans were tightened.  
In the recently announced Budget 2022, residential properties marginal property tax rates will be raised in two steps starting with the tax payable in 2023. The rates from 2024 are:



Non-owner-occupied residential properties (inc. investment properties) will see property tax rates increased to 12-36% (vs. current 10-20%).
	Concurrently, property tax rates for owner-occupied homes for portion of annual value in excess of S$30,000 will also be raised to a range of 6-32% (vs. 4-16% currently).

  Real Estate Developers &amp; Operators Sector +3% YTD but still 23% Below 2018 Peak  
Looking at the sector performance, the iEdge SG Real Estate Developers &amp; Operators Index has posted c. 3% price gains in the YTD, and c. +29% off the lows in March ’20 (at the start of the COVID-19 pandemic). The index is still c. 23% below the last peak seen in 2018.  
The iEdge SG Real Estate Developers &amp; Operators Index is a free-float, market capitalization-weighted index that measures the performance of listed real estate developers and operators in Singapore.



      
    
    iEdge SG Real Estate Developers

Sector P/B Trading -1 S.D. Below Mean  
The sector’s P/B ratio is at 0.44x (vs. historical mean of 0.59x) and also -1 S.D. below the historical mean. This is close to the level last seen during the start of the pandemic in March ’20, where there was a broad-based market correction and well below the levels see in 2017.


      
    
    iEdge SG Real Estate Developers


Most Actively-Traded SGX Stocks with Singapore Real Estate Exposure  
The top actively traded SGX listed stocks with Singapore real estate exposure posted a YTD total returns of -0.4%, which compares with the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. City Developments will report its FY21 results before the open on 25 Feb, UOL will report its CY21 results on 28 Feb, and Ho Bee Land will report after the 28 Feb close.   
These names have an average dividend yield of 2.7% with an average 0.6x P/B ratio. Of the 10 names with 5-year trading history, 7 of them currently have P/B ratios that are below 5-year P/B averages.




			Stock Name 
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			5Y Avg. P/B
			
			
			P/B
			
			
			Div Yield (%)
			
			
			2022 YTD Total Return 

			%
			
		


			City Developments
			
			
			C09
			
			
			6,657
			
			
			0.9
			
			
			0.8
			
			
			1.1
			
			
			7.8
			
		


			UOL Group
			
			
			U14
			
			
			6,164
			
			
			0.7
			
			
			0.6
			
			
			2.1
			
			
			3.0
			
		


			Frasers Property
			
			
			TQ5
			
			
			4,358
			
			
			0.6
			
			
			0.5
			
			
			1.8
			
			
			-0.9
			
		


			Ho Bee Land
			
			
			H13
			
			
			1,892
			
			
			0.5
			
			
			0.5
			
			
			3.5
			
			
			2.2
			
		


			GuocoLand
			
			
			F17
			
			
			1,810
			
			
			0.5
			
			
			0.4
			
			
			4.0
			
			
			1.3
			
		


			Wing Tai Holdings
			
			
			W05
			
			
			1,367
			
			
			0.4
			
			
			0.4
			
			
			1.7
			
			
			0.0
			
		


			Bukit Sembawang
			
			
			B61
			
			
			1,292
			
			
			1.0
			
			
			0.9
			
			
			0.8
			
			
			-0.4
			
		


			OUE
			
			
			LJ3
			
			
			1,150
			
			
			0.4
			
			
			0.3
			
			
			1.5
			
			
			-2.9
			
		


			Oxley Holdings
			
			
			5UX
			
			
			759
			
			
			1.1
			
			
			0.8
			
			
			1.4
			
			
			-4.8
			
		


			PropNex
			
			
			OYY
			
			
			629
			
			
			N.A.
			
			
			6.6
			
			
			5.6
			
			
			0.6
			
		


			Tuan Sing Holdings
			
			
			T24
			
			
			547
			
			
			0.4
			
			
			0.4
			
			
			1.3
			
			
			0.0
			
		


			APAC Realty
			
			
			CLN
			
			
			229
			
			
			N.A.
			
			
			1.4
			
			
			8.1
			
			
			-10.4
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			                          2.7
			
			
			-0.4
			
		

 Source: SGX, Refinitiv, Bloomberg (Data as of 18 February 2022).



SG Real Estate Sector Valuation Below Historical Mean Amidst Resilient Private Home Sales

<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2021-09/Oxley-Chairman.jpeg" class="editor-image img-responsive"></figure>
<div class="content-caption">Oxley chairman</div>

Entrepreneur and real estate magnate Ching Chiat Kwong believes in harnessing the power of fear - in particular, that dread of failure - to break new ground. “I make it a point to use fear to my advantage, and have never restrained myself from venturing into unfamiliar territory because of anxiety or worry over failing,” said the Executive Chairman and Chief Executive Officer of SGX-listed property developer Oxley Holdings Ltd. “This is why we endeavour to go into untapped markets and be the pioneer among Singapore developers to explore such places. We also make the best of our failures,&nbsp;and use the lessons we have learned to propel our future growth.” Ching’s indomitable spirit was evident even in his early years - he kick-started his entrepreneurial journey at the tender age of nine by selling greeting cards.&nbsp; Reflecting a gung-ho and enterprising streak, his collective career experience bordered on the unconventional, spanning a gamut of roles that ranged from real estate marketer and travel agent to otah&nbsp; seller, bar owner and policeman. For the National University of Singapore graduate with a Bachelor of Arts and a Bachelor of Social Sciences with Honours degree, his foray into property began 25 years ago, with the construction of show flats for developers.&nbsp; Over a decade later, Ching took the risk of venturing into full-scale real estate development, with spectacular results - his 48-unit shoebox apartment project, Tyrwhitt 139, sold out in three hours flat. He went on to launch various other development projects before setting up Oxley Holdings in 2010. “2010 was a milestone year when I started Oxley with my business partner, Eric Low,” he recalled. “That same year, the company was listed on Singapore Exchange with a market capitalisation of S$525 million, which surged to about S$2 billion at its peak.” Today, Oxley, with a diversified portfolio comprising property development as well as property investment projects and hospitality assets, has come into its own. The Group&nbsp;has a presence across nine geographical markets, including Singapore, the UK, Ireland, Cyprus, Cambodia, Malaysia, China, Vietnam and Australia. It specialises in the development of quality residential, commercial, industrial and hospitality projects. Since 2010, Oxley has launched a portfolio of 48 projects across various countries, of which 36&nbsp;have been completed. Its landmark developments in Singapore include Riverfront Residences and Sixteen 35 Residences.
The Group reported S$1.4 billion revenue for FY2021, up 33% from FY2020. This was mainly driven by higher revenue from projects in Cambodia, Singapore and Ireland, but partially offset by lower revenue from the project in the UK. Gross profit of S$296.5 million for FY2021 represented a growth of 32% over FY2020.
Taking into account a loss from discontinued operations of S$40.0 million, Oxley achieved net profit of S$49.5 million for FY2021. Excluding this loss, as well as other impairment and fair value losses, net profit would have been S$136.8 million.
Robust Alliances “One of the key lessons we learnt over the past decade is to pick a strong partner,” Ching said. “Oxley has a strategy to enter joint ventures or strategic alliances with good partners for the pooling of financial resources and management expertise in project developments. This significantly reduces the risks undertaken by the Group.” One example is Oxley’s partnership with UK construction firm Ballymore Group to develop Royal Wharf, a 40-acre site in London along the River Thames. Ballymore and Oxley shared a common vision and plans for a 394,000-square-metre-development. With 3,385 homes, a new school, shops, offices and riverside restaurants, the project caters to a population of about 10,000 when completed.&nbsp; “We remember that when we signed the agreement nine years ago, the world had just recovered from a global recession. Ballymore believed in our strategy and the rest is history. Royal Wharf is the largest London development project since 2012.” Likewise, over the past four years, Oxley has been buying land bank in Singapore at breakneck speed. “And we planned, developed and built the developments very quickly too. Our partners supported our strategy and to-date, we have sold more than S$4 billion worth of houses over these four years,” he said.&nbsp; “Not many companies move at our pace and still make good profit.” As at 8 August 2021, about 91% of the Group’s Singapore residential units have been sold, representing 87% of the total gross development value (GDV) or approximately S$4.3 billion. The Group’s effective stake of secured sales amount to about S$2.6 billion, while future progress billings from the sold units amount to approximately S$1.7 billion. Even as it expands, Oxley continues to target sustainable earnings, particularly through long-term projects. “We remain very hungry for growth, but we want to achieve growth with calculated risks,” Ching said. “We see ourselves working with the local municipal governments to identify sites for township developments. This is how we worked with the Irish government on the Masterplan for the Connolly Station project.” Oxley plans to build a mixed-use development comprising residential units, office retail space and a hotel, which is part of an overall Masterplan for the Connolly Quarter. Upon completion, the Connolly Quarter will be home to many who will live and work in this revitalized part of Dublin. “Township development with governments minimises our capital investment, and hence, lowers our risks,” he added. “It provides a stable recognition of earnings over a longer period of time, compared to plain vanilla property development projects. This will be our focus for the next few years.” Speed and Agility In today’s world, however, there is no free lunch, and competition lurks in the most unexpected places. “Property development is a business that evolves very quickly. You need to have a keen eye for observation, to see what the market is lacking, and be able to fulfil this need,” Ching pointed out. Timing is also another crucial factor. “The market upturn only lasts a couple of years. You have to be nimble. You have to approach every market with a strategy, and every decision you make must be a calculated one. Doing your due diligence is also very important.” As a result, there is much to keep him up till the wee hours. “I’m constantly exploring new and innovative ideas to motivate the Group, so we can embark on our next stage of growth,” he added.&nbsp; “For instance, the work-from-home trend arising from the COVID-19 pandemic presents another opportunity for property developers who know how to reposition themselves.” Apart from the day-to-day operations, Ching is also focused on Oxley’s Environmental, Social and Governance (ESG) strategy, which revolves around its biggest asset - human capital. “We're always looking out for good, talented people to join us and grow together,” he noted. “However, there are numerous challenges in this area, especially with the Millennials, who are more interested in work-life balance, and are probably not acclimated to hardship environments in emerging markets. So, we have recruited talents from all walks of life and different nationalities.” At the same time, Ching is always mindful of Warren Buffett’s timeless advice: “We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for&nbsp;integrity. And if they don't have the latter, the first two will kill you, because if you're going to get someone without integrity, you want them lazy and dumb.” “That’s why I place a premium on integrity and honesty - those are my touchstones,” he added. To this day, the 56-year-old remains inspired by the real estate developer’s role as an agent of change and progress. This is essentially what gets him out of bed every morning. “What I love about development is its ability to shape communities,” he said with a smile. “As we take on larger township projects, I feel that my biggest achievement is in changing the landscape of towns, building communities, and in turn, allowing people to build their dreams.” Oxley Holdings Ltd
Oxley is a home-grown property developer with a diversified portfolio, including property development, property investment and project management. It is listed on SGX Mainboard and has a market capitalisation of approximately S$991 million as at 13 August 2021. The Group has a business presence across nine geographical markets, including Singapore, the UK, Ireland, Cyprus, Cambodia, Malaysia, China, Vietnam and Australia. The Group specialises in the development of quality residential, commercial, industrial and hospitality projects. Since its incorporation in March 2010, Oxley has launched a portfolio of 48 projects across various countries, of which 36 have been completed. The company website is: <a href="http://www.oxley.com.sg" target="_blank" rel="noopener">www.oxley.com.sg</a> Click&nbsp;<a href="https://www.sgx.com/securities/equities/5UX" target="_blank" rel="noopener">here&nbsp;</a>for the company's StockFacts page. For the full year ended 30 June 2021 financial results, click&nbsp;<a href="https://links.sgx.com/1.0.0/corporate-announcements/UJJTCFNOCPGDRGVA/681838_Oxley%20FY2021%20PR.pdf" target="_blank" rel="noopener">here</a>. About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;<a href="https://www.sgx.com/research-education/market-dialogues" target="_blank" rel="noopener">here</a>. &nbsp; For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;<a href="https://www.sgx.com/jennifer.t@sgx.com" target="_blank" rel="noopener">jennifer.t@sgx.com</a>.


Oxley chairman

Entrepreneur and real estate magnate Ching Chiat Kwong believes in harnessing the power of fear - in particular, that dread of failure - to break new ground.  “I make it a point to use fear to my advantage, and have never restrained myself from venturing into unfamiliar territory because of anxiety or worry over failing,” said the Executive Chairman and Chief Executive Officer of SGX-listed property developer Oxley Holdings Ltd.  “This is why we endeavour to go into untapped markets and be the pioneer among Singapore developers to explore such places. We also make the best of our failures,&nbsp;and use the lessons we have learned to propel our future growth.”  Ching’s indomitable spirit was evident even in his early years - he kick-started his entrepreneurial journey at the tender age of nine by selling greeting cards.&nbsp;  Reflecting a gung-ho and enterprising streak, his collective career experience bordered on the unconventional, spanning a gamut of roles that ranged from real estate marketer and travel agent to otah&nbsp; seller, bar owner and policeman.  For the National University of Singapore graduate with a Bachelor of Arts and a Bachelor of Social Sciences with Honours degree, his foray into property began 25 years ago, with the construction of show flats for developers.&nbsp;  Over a decade later, Ching took the risk of venturing into full-scale real estate development, with spectacular results - his 48-unit shoebox apartment project, Tyrwhitt 139, sold out in three hours flat. He went on to launch various other development projects before setting up Oxley Holdings in 2010.  “2010 was a milestone year when I started Oxley with my business partner, Eric Low,” he recalled. “That same year, the company was listed on Singapore Exchange with a market capitalisation of S$525 million, which surged to about S$2 billion at its peak.”  Today, Oxley, with a diversified portfolio comprising property development as well as property investment projects and hospitality assets, has come into its own. The Group&nbsp;has a presence across nine geographical markets, including Singapore, the UK, Ireland, Cyprus, Cambodia, Malaysia, China, Vietnam and Australia. It specialises in the development of quality residential, commercial, industrial and hospitality projects.  Since 2010, Oxley has launched a portfolio of 48 projects across various countries, of which 36&nbsp;have been completed. Its landmark developments in Singapore include Riverfront Residences and Sixteen 35 Residences.
The Group reported S$1.4 billion revenue for FY2021, up 33% from FY2020. This was mainly driven by higher revenue from projects in Cambodia, Singapore and Ireland, but partially offset by lower revenue from the project in the UK. Gross profit of S$296.5 million for FY2021 represented a growth of 32% over FY2020.
Taking into account a loss from discontinued operations of S$40.0 million, Oxley achieved net profit of S$49.5 million for FY2021. Excluding this loss, as well as other impairment and fair value losses, net profit would have been S$136.8 million.
Robust Alliances  “One of the key lessons we learnt over the past decade is to pick a strong partner,” Ching said. “Oxley has a strategy to enter joint ventures or strategic alliances with good partners for the pooling of financial resources and management expertise in project developments. This significantly reduces the risks undertaken by the Group.”  One example is Oxley’s partnership with UK construction firm Ballymore Group to develop Royal Wharf, a 40-acre site in London along the River Thames. Ballymore and Oxley shared a common vision and plans for a 394,000-square-metre-development. With 3,385 homes, a new school, shops, offices and riverside restaurants, the project caters to a population of about 10,000 when completed.&nbsp;  “We remember that when we signed the agreement nine years ago, the world had just recovered from a global recession. Ballymore believed in our strategy and the rest is history. Royal Wharf is the largest London development project since 2012.”  Likewise, over the past four years, Oxley has been buying land bank in Singapore at breakneck speed. “And we planned, developed and built the developments very quickly too. Our partners supported our strategy and to-date, we have sold more than S$4 billion worth of houses over these four years,” he said.&nbsp;  “Not many companies move at our pace and still make good profit.”  As at 8 August 2021, about 91% of the Group’s Singapore residential units have been sold, representing 87% of the total gross development value (GDV) or approximately S$4.3 billion. The Group’s effective stake of secured sales amount to about S$2.6 billion, while future progress billings from the sold units amount to approximately S$1.7 billion.  Even as it expands, Oxley continues to target sustainable earnings, particularly through long-term projects. “We remain very hungry for growth, but we want to achieve growth with calculated risks,” Ching said.  “We see ourselves working with the local municipal governments to identify sites for township developments. This is how we worked with the Irish government on the Masterplan for the Connolly Station project.”  Oxley plans to build a mixed-use development comprising residential units, office retail space and a hotel, which is part of an overall Masterplan for the Connolly Quarter. Upon completion, the Connolly Quarter will be home to many who will live and work in this revitalized part of Dublin.  “Township development with governments minimises our capital investment, and hence, lowers our risks,” he added. “It provides a stable recognition of earnings over a longer period of time, compared to plain vanilla property development projects. This will be our focus for the next few years.”  Speed and Agility  In today’s world, however, there is no free lunch, and competition lurks in the most unexpected places. “Property development is a business that evolves very quickly. You need to have a keen eye for observation, to see what the market is lacking, and be able to fulfil this need,” Ching pointed out.  Timing is also another crucial factor. “The market upturn only lasts a couple of years. You have to be nimble. You have to approach every market with a strategy, and every decision you make must be a calculated one. Doing your due diligence is also very important.”  As a result, there is much to keep him up till the wee hours. “I’m constantly exploring new and innovative ideas to motivate the Group, so we can embark on our next stage of growth,” he added.&nbsp;  “For instance, the work-from-home trend arising from the COVID-19 pandemic presents another opportunity for property developers who know how to reposition themselves.”  Apart from the day-to-day operations, Ching is also focused on Oxley’s Environmental, Social and Governance (ESG) strategy, which revolves around its biggest asset - human capital.  “We're always looking out for good, talented people to join us and grow together,” he noted.  “However, there are numerous challenges in this area, especially with the Millennials, who are more interested in work-life balance, and are probably not acclimated to hardship environments in emerging markets. So, we have recruited talents from all walks of life and different nationalities.”  At the same time, Ching is always mindful of Warren Buffett’s timeless advice: “We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for&nbsp;integrity. And if they don't have the latter, the first two will kill you, because if you're going to get someone without integrity, you want them lazy and dumb.”  “That’s why I place a premium on integrity and honesty - those are my touchstones,” he added.  To this day, the 56-year-old remains inspired by the real estate developer’s role as an agent of change and progress. This is essentially what gets him out of bed every morning.  “What I love about development is its ability to shape communities,” he said with a smile.  “As we take on larger township projects, I feel that my biggest achievement is in changing the landscape of towns, building communities, and in turn, allowing people to build their dreams.”  Oxley Holdings Ltd
Oxley is a home-grown property developer with a diversified portfolio, including property development, property investment and project management. It is listed on SGX Mainboard and has a market capitalisation of approximately S$991 million as at 13 August 2021. The Group has a business presence across nine geographical markets, including Singapore, the UK, Ireland, Cyprus, Cambodia, Malaysia, China, Vietnam and Australia. The Group specialises in the development of quality residential, commercial, industrial and hospitality projects. Since its incorporation in March 2010, Oxley has launched a portfolio of 48 projects across various countries, of which 36 have been completed.  The company website is: www.oxley.com.sg  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the full year ended 30 June 2021 financial results, click&nbsp;here.   About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;here. &nbsp;  For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;jennifer.t@sgx.com.

Oxley Holdings: Building Sustainable Growth

<div>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</div>
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<h2>Oxley Holdings</h2>
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<h3>With the red-hot residential market, here's a property developer to watch</h3>
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Oxley Holdings (SGX:5UX) specialises in the development of residential, commercial, industrial, and hospitality projects. We believe that its deleveraging efforts could drive a re-rating in its share price moving forward.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/290/original/image_69345502631635859898860.png?1635859909" class="editor-image img-responsive" data-smartkarma-image-id="239290"></figure>
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<li>Since its incorporation in 2010, property developer Oxley Holdings (SGX:5UX) has a launched portfolio of 48 projects spanning across Singapore as well as international markets including the United Kingdom.</li>
<li>With a substantial amount of unbilled sales, Oxley is expected to generate a steady income stream over the next three years.</li>
<li>The strong generation of cash flow generation has supported Oxley’s deleveraging efforts. We believe that the continuous reduction in its net gearing ratio could drive a re-rating in its share price.</li>
<li>We expect the streamlining of Oxley’s portfolio to focus on its core competency – property development – to deliver greater value to shareholders and further support its deleveraging.</li>
<li>We value Oxley at a target price of SGD 0.28, derived from a 50% discount to our estimated revalued net asset value (RNAV). This represents a potential upside of 17% based on the closing price of SGD 0.24 on 18 August 2021.</li>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.





Oxley Holdings



With the red-hot residential market, here's a property developer to watch



Oxley Holdings (SGX:5UX) specialises in the development of residential, commercial, industrial, and hospitality projects. We believe that its deleveraging efforts could drive a re-rating in its share price moving forward.





Since its incorporation in 2010, property developer Oxley Holdings (SGX:5UX) has a launched portfolio of 48 projects spanning across Singapore as well as international markets including the United Kingdom.
With a substantial amount of unbilled sales, Oxley is expected to generate a steady income stream over the next three years.
The strong generation of cash flow generation has supported Oxley’s deleveraging efforts. We believe that the continuous reduction in its net gearing ratio could drive a re-rating in its share price.
We expect the streamlining of Oxley’s portfolio to focus on its core competency – property development – to deliver greater value to shareholders and further support its deleveraging.
We value Oxley at a target price of SGD 0.28, derived from a 50% discount to our estimated revalued net asset value (RNAV). This represents a potential upside of 17% based on the closing price of SGD 0.24 on 18 August 2021.















(Non-SGX Report) Oxley Holdings: With the Red-Hot Residential Market, Here's a Property Developer to Watch

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It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.” Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: <a href="http://www.marcopolomarine.com.sg">www.marcopolomarine.com.sg</a> 
Click <a href="https://www.sgx.com/securities/equities/5LY">here </a>for the company's StockFacts page. 
For the year ended 30 September 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QQYC4T8CH6OZ2TJB/640673_MPML-%20FY2020%20Results%20Announcement.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    MPM-CEO


It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.”   Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: www.marcopolomarine.com.sg  
Click here for the company's StockFacts page.  
For the year ended 30 September 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Marco Polo Marine Turns Tide, Steers into New Chapter

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Oxley Holdings Ltd. develops real estate. The Company develops residential and commercial projects in accessible locations. Oxley also develops light industrial buildings that include swimming pools and other recreational amenities.

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