OXLEY HOLDINGS (OHL SP) reported 3QFY16 net profit of S$51m, a jump of 330% y/y, bringing the group's cumulative profits for the nine months ended March 2016 to $$132m.

Oxley Holdings
Share price:
44 c
Target: 
91 c

During the quarter, the group booked in profits from seven of its residential and mixed development projects in Singapore, as well as a $25.7m gain generated from the sale of its investment property, Chiba Port Square, in Japan. The group also declared an interim dividend of 0.4cents/share for the quarter. 

To date, Oxley has chalked up unbilled sales of $3.2bn across its Singapore ($1.5bn) and overseas ($1.7bn) projects, of which $2bn will be recognised over the next 12 months.

These include its high-margin mixed development projects such as Midtown, KAP and NEWest, as well as strata-sales of its commercial development Oxley Tower on Robinson Road.

OxleyChing10.14Oxley CEO Ching Chiat Kwong with shareholders after an AGM.
File photo: Mervyn Sim
Maiden profits from its UK project Royal Wharf will also be booked from 3Q16 onwards.

Meanwhile, the group is rolling out a series of new projects in its overseas portfolio, including the Peak, its second project in Cambodia, a commercial development in Dublin's CBD, Min Residences in Yangon, Oxley Convention Centre in Batam and Oxley Towers KLCC in Kuala Lumpur.

Successful take-up rates for these projects would further extend the group's profit pipeline.

We expect Oxley to report cumulative profits of $800-900m over FY16-18, with a steady stream of cash flows from completions which will help reduce the group's gearing.

The stock is one of our top picks within the sector, and we have a TP of $0.91, based on a 20% discount to its RNAV.


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