Excerpts from analyst's report

Goh Han PengRHB Research analyst: Goh Han Peng (left)

Oxley Holdings (OHL SP) reported 1QFY15 net profit of SGD19.6m (-92% y-o-y) due to a high base in the year ago period, which was boosted by the completion of Oxley Bizhub, a highly profitable industrial project which grossed over SGD250m in profits.


During the quarter, the group recognised contribution from its 13 Singapore projects, which are substantially sold and expected to deliver over SGD700m of pretax-profit in the course of the next 2 years. Robinson Square is slated for completion next quarter, while further construction progress for its high-yielding, mixed development projects such as KAP, Oxley Tower, Midtown and NEWest will underpin our SGD112m FY15 forecast.



In overseas markets, the group continues to make progress in its rollout of projects. Following the recent launch of Royal Wharf Phase 2 (London), the group has sold over 1400 units in the 3,300-unit development. In Cambodia, the group has sold more than half of the residential/soho units in The Bridge.  
 
OxleyChing10.14Oxley CEO Ching Chiat Kwong speaking with shareholders after the recent AGM. Photo by Mervyn Sim.The next major launch is the KLCC project in early 2015, after legal completion of the land purchase in Jan 2015.

Early indications suggest pricing will be above RM2000 psf for the residential component, and the group is in the midst of securing an operator for a 6-star hotel for one of the 2 hotel blocks. With the recent acquisition of land development rights in Myanmar, the group has extended its reach to 5 overseas countries. 
 
Construction is proceeding apace for the group’s hotel-cum-commercial development at the PINES. On completion in 2016, the group will have a steady stream of recurring income. The group recently completed a SGD40m of a commercial development in Chiba Prefecture, Japan, at a fraction of its historical cost, which will add to its recurring income stream.
 
Construction is proceeding apace for the group’s hotel-cum-commercial development at the PINES. On completion in 2016, the group will have a steady stream of recurring income. Oxley recently purchased an operational commercial building in Chiba, Japan for SGD40m, at a bargain level, which will further add to its recurring income.
 
We continue to like the stock for its dynamic management and its good earnings visibility. Good take-ups in its up-coming overseas launches will help narrow the 54% discount to its RNAV of SGD1.14/share. Our TP of SGD0.91 is based on a 20% discount to its RNAV. Maintain BUY. 


Recent story: @ Oxley’s AGM: Clarity on London project, KL rejections, Cambodia ventures, etc
 

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