Ho Bee Land – Good Results in Line with Expectations. Await Further Updates on Refinancing.

Ho Bee Land – 4Q Earnings Hit by Unexpected Tax Provision

Singapore and emerging market real estate

Royston Foo

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/18298" target="_blank" data-smartkarma-citation="entities:18298:1">This </a>insight is an initiation report on <a href="https://www.smartkarma.com/entities/18298" target="_blank" data-smartkarma-citation="entities:18298:1">Ho Bee Land Ltd (HOBEE SP)</a> with a BUY rating and fair value of S$3.32 per share. Upside potential is attractive at 31%. HBL is a Singapore property developer that is probably best-known for being the leading developer of luxury properties on the Sentosa Island – Singapore’s playground for the rich. Over the years, HBL's business model has shifted away from property development to property investment and it has built up a sizeable portfolio of high-quality investment properties valued at S$4.3 bil. Strong growth in recurring income has allowed HBL to raise its dividend payments to shareholders. HBL now has a historical dividend yield of 3.95% and there is still room for management to increase the dividend payment going forward. Having amassed S$4.3 bil of investment properties and with net gearing risen to 41.2%, a REIT listing is a likely next step for HBL and recent developments have hinted on this possibility. Current valuation may also be attractive for Mr Chua Thian Poh to privatise HBL but this may not be the best option for Mr Chua if his intention is to continue growing the business over the long term.

This insight is an initiation report on Ho Bee Land Ltd (HOBEE SP) with a BUY rating and fair value of S$3.32 per share. Upside potential is attractive at 31%. HBL is a Singapore property developer that is probably best-known for being the leading developer of luxury properties on the Sentosa Island – Singapore’s playground for the rich. Over the years, HBL's business model has shifted away from property development to property investment and it has built up a sizeable portfolio of high-quality investment properties valued at S$4.3 bil. Strong growth in recurring income has allowed HBL to raise its dividend payments to shareholders. HBL now has a historical dividend yield of 3.95% and there is still room for management to increase the dividend payment going forward. Having amassed S$4.3 bil of investment properties and with net gearing risen to 41.2%, a REIT listing is a likely next step for HBL and recent developments have hinted on this possibility. Current valuation may also be attractive for Mr Chua Thian Poh to privatise HBL but this may not be the best option for Mr Chua if his intention is to continue growing the business over the long term. 

Ho Bee – Solid Foundation Laid for Next Growth Phase. REIT Listing a Potential Catalyst.