Steady Yield-Play at Deeply Discounted Valuation. What's in Its Portfolio?

Singapore Property Analyst

Anni Kum

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/9875" target="_blank" data-smartkarma-citation="entities:9875:1">Far East Orchard Ltd (FEOR SP)</a> reported 18.2% y-o-y and 68.1% y-o-y declines in revenue and net profit, respectively, for FY2017; slightly better than my expectations. The lower figures in FY2017 were mainly due to the absence of progressive revenue being recognized for property development projects. The hospitality business in Australia was dragged down by the Perth market.  First and final dividend of 6 Singapore Cents per share was declared, consistent with the historical trend. The dividend yield is stable at about 4%.  The outlook statement given by management appears more positive compared to the previous quarter, particularly in the hospitality and property development segment. However, a lot of work is needed for improving the operating profitability of its hospitality business. </p>

Far East Orchard Ltd (FEOR SP) reported 18.2% y-o-y and 68.1% y-o-y declines in revenue and net profit, respectively, for FY2017; slightly better than my expectations. The lower figures in FY2017 were mainly due to the absence of progressive revenue being recognized for property development projects. The hospitality business in Australia was dragged down by the Perth market.  First and final dividend of 6 Singapore Cents per share was declared, consistent with the historical trend. The dividend yield is stable at about 4%.  The outlook statement given by management appears more positive compared to the previous quarter, particularly in the hospitality and property development segment. However, a lot of work is needed for improving the operating profitability of its hospitality business. 

Management Upbeat on Hospitality Business