Post Reply
1-20 of 30
Hwa Hong, Wing Tai, Teo family consortium launches bid to take Amara private at S$0.895 a share
Hot stock: Wing Tai trading halt fuels speculation on privatisation of Malaysia counterpart
If Wing Tai' s share price can really go up to its NAV value, my investment in Wing Tai can easily see profits of at least 70% and that is not including divs received over the years lol
Wing Tai, GuocoLand boards should do more to address their stock price' s big discounts to book value
Last week, two established property groups reported decent results for the financial year ended June 30, 2021 (FY 2021).Minority shareholders of GuocoLand and Wing Tai Holdings, while probably thankful that the groups are performing fine in spite of the pandemic, may wonder if more can be done to improve the values of their shares.
GuocoLand posted a 48 per cent year on year (yoy) increase in net profit to S$169.1 million, despite a 9 per cent fall in revenue.
Helped in part by valuation gains - including from flagship Guoco Tower in Tanjong Pagar, which saw valuation rise to S$2.55 billion as at June 30 from S$2.50 billion a year ago - GuocoLand' s net asset value (NAV) per share rose 4 per cent yoy to S$3.60 as at end-June.
GuocoLand is proposing to pay a dividend of six Singapore cents per share for FY 2021, unchanged from that paid for the previous financial year.
Wing Tai, which also has a retail business, reported net profit of S$43.6 million for FY 2021, up 173 per cent yoy. Helped mainly by higher contribution from its development properties, full-year revenue rose 24 per cent yoy.
Wing Tai' s NAV per share fell 1 per cent from a year ago to S$4.14 as at end-June. The group is proposing a dividend of five cents per share for the latest FY, up from three cents per share for FY 2020.
While GuocoLand and Wing Tai are active in residential development in Singapore, with strong track records in the high-end segment, their businesses do differ. The former has significant exposure to Grade A offices in Singapore' s Central Business District while the latter has exposure to serviced residences and the Hong Kong market.
The two also have slightly different capital structures. Wing Tai was in a net cash position as of end-June while GuocoLand has gearing of approximately one time.
But both companies have directors who hold large stakes. Wing Tai' s chairman Cheng Wai Keung has a direct and deemed interest of around 60 per cent in Wing Tai.
Quek Leng Chan, who heads Hong Leong Group of Malaysia, has a direct and deemed interest of around 72 per cent in GuocoLand.
And, minorities of both companies are probably of the opinion they have been dealt a bad hand when it comes to the share price. The two stocks are trading at less than half of their respective book values.
Should the boards of these companies do more to narrow the yawning gap between the share price and the NAV per share?
Importance of board intervention
Last week, Singapore Exchange Regulation issued consultation papers that look to enhance its sustainability reporting regime amid a growing focus on environmental, social and governance (ESG) factors worldwide.
Listed companies in Singapore could be required to make mandatory climate-related disclosures and provide details on their board diversity policy in the coming years. Issuers would also need to subject their sustainability reports to assurance in future.
This increased emphasis on ESG, however, risks distracting boards from a topic that is just as important: business strategy and how that links to long-term value creation.
The boards of GuocoLand and Wing Tai tick important check boxes in the governance frameworks. Independent directors constitute a majority, and GuocoLand even has an independent chairman.
These two groups do not have the scale of CapitaLand' s asset and fund management business, so it is not possible for them to restructure and improve valuations as CapitaLand is doing - by splitting its property development arm from its asset management arm. That does not, however, mean the boards of Wing Tai and GuocoLand have no other options.
The takeaway for directors of property groups from CapitaLand' s move is that corporate restructuring can add huge value to shareholders.
CapitaLand was trading at more than a 20 per cent discount to book value prior to announcing its restructuring in March. The share price has rallied by more than 20 per cent post announcement of the restructuring.
Options available
One option would be to improve stock liquidity by increasing free floats. This might help narrow the discount to NAV.
Separately, boards should actively explore ways to realise some of their existing book value for the benefit of all shareholders.
GuocoLand, for instance, could consider using Guoco Tower to start a real estate investment trust (Reit). On the local bourse, Mapletree Commercial Trust is a Reit with Singapore commercial assets that trades at a premium to its last reported book value.
Another possibility for both GuocoLand and Wing Tai is to actively divest investment properties and hospitality assets in their entirety or partially to Reits, private funds or whoever can offer the best price, and then return such proceeds to shareholders.
Alternatively, listed property groups may want to mimic private real estate funds. Some of these funds invest in a portfolio of assets for between five and seven years, after which the fund can be liquidated and investors reap the growth in value of the fund if any.
All shareholders could stand to gain if the entire business of a listed property group were sold for say book value after a certain number of years.
Over a 10-year time frame, GuocoLand' s equity attributable to ordinary shareholders grew 67 per cent from S$2.4 billion as at end-FY 2012 to S$4.0 billion as at end-FY 2021. Wing Tai' s equity attributable to ordinary shareholders rose 43 per cent from S$2.2 billion as at end-FY 2012 to S$3.2 billion as at end-FY 2021.
But both groups achieved returns on equity in the low single digits in FY 2021.
Both companies show some definite potential, but their boards need to wake up to the need to boost returns on stock valuations in order to earn their keep.
Wing Tai Holdings profit jumps 173% amid higher revenue from Le Nouvel Ardmore, The M
Property and retail player Wing Tai Holdings has reported a net profit of S$43.6 million for the full year ended June 30, a 173 per cent jump compared with its previous financial year.This came despite a net loss of S$13.2 million for the first six months of 2021. For the same half-year period in 2020, net loss amounted to S$16.8 million, according to the mainboard-listed company' s full-year financial statement released on Thursday.
Its revenue for the full year rose 24 per cent to S$461.4 million, with H1 reporting a 16 per cent increase in revenue to S$218 million.
Wing Tai said the increase in revenue is mainly due to higher contribution from its development properties.
" The current year revenue from development properties was largely attributable to the additional units sold in Le Nouvel Ardmore and the progressive sales recognised from The M at Middle Road in Singapore," the company said.
The group' s net asset value per share as at June 30 was S$4.14, almost on par with the S$4.18 it recorded during the same period last year.
Earnings per share stood at 3.99 cents, up from 0.40 cent in FY2020.
The company has declared an ordinary dividend of 3 cents per share and special dividend at 2 cents per share. In FY2020, the final dividend was 3 cents per share.
Looking ahead, while the residential property market is likely to remain stable, the construction industry is facing rising costs due to manpower shortage and reduced productivity as a result of safe-management measures at worksites, Wing Tai said, adding that it will exercise prudence in liquidity and capital management to ride through the market uncertainties.
Wing Tai shares closed flat at S$1.83 on Thursday.
Yeah, time to go back to $2
Breakout... enjoy
Company bought back 655,000 shares at $1.74779 today.
1.75 cleared.
MSCI rebalancing. Wing Tai finally kicked out of index. Hope for better times from here onwards. haha.
furyhawk ( Date: 27-May-2021 17:53) Posted:
|
Super high volume 8M shares sell down post market. weird. Same thing happened to Singtel, OCBC, DBS.
finally back up to testing 172 again.
seller came back in to punch down to 170/171
moved from 169 to 172 today. not sure if the worst is over.
selling finally eased today.
yah. i was forced to average down at 1.69.
furyhawk ( Date: 25-May-2021 00:54) Posted:
|
The selling vol so big. Suntec stable Abit liao, this still moving down.
https://app2.msci.com/eqb/custom_indexes/sg_performance.html
only for the main MSCI Big cap index. The one which Suntec is gonna be kicked out and replaced by Sea Ltd. unable to find the constituents of their mid/small cap indices.
only for the main MSCI Big cap index. The one which Suntec is gonna be kicked out and replaced by Sea Ltd. unable to find the constituents of their mid/small cap indices.
PhillipTan ( Date: 22-May-2021 01:23) Posted:
|
Any idea where to find all the companies in the mcsi index?
I only managed to find those in the sti index
Seems like companies are much more affected after getting included or kicked out of mcsi compared to sti
Frasers Log was included into sti but the share price like no movement at all
Dropped even further during the sell down last week
I only managed to find those in the sti index
Seems like companies are much more affected after getting included or kicked out of mcsi compared to sti
Frasers Log was included into sti but the share price like no movement at all
Dropped even further during the sell down last week
stockinvestor ( Date: 21-May-2021 16:09) Posted:
|
Price has been weak as it will be kicked out of the MSCI mid cap index at the close of 27/5 but buyers seem to be emerging at current levels. I' m in at $1.73 and $1.74 today.