UOB Kay Hian expects Wee Hur to report bumper profit in 2014.
Analyst: Loke Chunying
Bumper profit expected in 2014.
As the completed
contract accounting method is adopted for industrial
development properties, Wee Hur saw a 750% surge in net
profit for 2012 with the TOP and recognition of revenue for
Harvest@Woodlands.
Accordingly, investors can expect
another surge in profit in 2014 with the TOP of
Premier@Kaki Bukit (more than 95% sold), where Wee Hur
owns a 60% interest in the 74,943 sqm GFA industrial
development.
•
Consistent dividend payout.
Wee Hur has been
maintaining a dividend payout of at least 2 S cents since
2008. In its bumper profit year 2012, Wee Hur rewarded
shareholders with a total dividend of 4 S cents. We like
Wee Hur for its consistent dividend payout history and its
Assuming Wee Hur maintains its 2 S cents dividend payout
for 2013, it translates to a current dividend yield of 4.3%.
The next big project– Thomson View, third time’s the
charm?
In 2012, the JV between Wee Hur (51%) and
Lucrum Capital (49%) successfully acquired Thomson View
Condominium, a 99-year leasehold residential site sitting
on a land area of 540,314.4sf. After including the
differential and lease upgrading premium payable,
estimated cost of acquisition is S$712 psf ppr.
Goh Yew Lian, CEO of Wee Hur Holdings. NextInsight file photoAnother 99-year leasehold residential site at Bright Hill drive was sold
at a cost of S$719.9 psf ppr to a JV between UOL and
Singapore Land in 2012. With Thomson Grand (launched in
2011 and fully sold out with an ASP of S$1,330 psf) being
the only new launch in the vicinity for the past few years,
we expect the launch of Thomson View to be highly
anticipated by investors.
However, the Thomson View
project recently hit the brakes when 13 of the condo’s
owners filed for a stop order against the sale. With the stop
order, uncertainty over the project looms as risks of a sale
termination or a long dreaded legal battle emerged.
The
The
stop order is also likely to delay project launch and future
earnings. Any new property cooling measures announced
during this period may also deter buying sentiment.
Thomson View had been unsuccessful in its two previous
enbloc attempts in 2007 and 2011.
• Our view.While uncertainty looms over the future of
consistent dividend payout, any positive news about
Thomson View, there is definitely a heightened market
interest in Wee Hur. The stock has seen a jump in volume
since the start of the year. With an established track record
and a good practice of rewarding shareholders with
Thomson View will be a catalyst for the stock price.
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Artist impression of a made-over Suntec City.Morgan Stanley initiates coverage of Suntec REIT with expectations of higher dividend
Analysts: Wilson Ng, CFA, and Sean Gardiner
New top pick in S-REITS. Outperforming office assets well appreciated by the market but we think mall overhaul concerns are overdone. Our 2014/15 div forecasts are thus 12/15% above consensus.
Above consensus-dividends: We forecast +18/12% growth in 2014/15 as income from reopened spaces in Suntec Mall progressively flows through.
Renovations pose uncertainty for nearer-term dividends, but earmarked proceeds from the sale of Chijmes should more than cover any shortfall. We expect dividends to revert to pre-renovation levels at 9.7 c (annualized) by 3Q and surpass at 10.6 c by 2014.
Under-appreciated mall: At 0.9x P/B, the stock prices in a rent of only S$8.95 psf for Suntec Mall – 10% below passing rents and 30% lower than management’s target of S$12.59.
Price target of S$2.15/shr is derived by applying a target dividend yield of 5.5% -- half a standard deviation below the long-run average of 6.0% -- to our estimated 4Q13 annualized dividend/share of 9.8 c.
