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.
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.
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.