SING HOLDINGS: "Expect $130 m profit from Parc Botannia," says KGI Securities

KGI Securities (Singapore) report:

LeeSzeHao2

Lee Sze Hao, CEO of Sing Holdings: His direct and indirect interest in the company has risen by 1.318 million shares in March-April this year. NextInsight file photo.The group launched the sale of its 735-unit private residential project Parc Botannia at Fernvale Road in November 2017.

It has already issued options to purchase up to 43% of the units as of 26 Feb 2018, just four months within launch.

We estimate an average selling price (ASP) of S$1,250 psf, which is 25% higher than our initial estimates of S$1,000 psf.

Stock price	44 c
52-week range	34 – 52 c
PE (ttm)	53
Market cap	S$176 m
Shares outstanding	401 million
Dividend yield (ttm)	2.27%
1-year return	22%
Source: Bloomberg

We estimate PATMI contribution of S$130mn or S$0.32/share from this project alone, making up an astounding 70% of Sing Holding’s current market capitalisation.

As a result, we raise our RNAV estimate to S$0.98 and apply a 30% discount to arrive at a fair value of S$0.68 (+55% upside potential).

Sing Holdings
Share price: 44 c	RNAV: 98 c
Source: KGI Securities

It is currently trading at an attractive deep discount of more than 50% to its S$0.98 RNAV, which we believe may eventually narrow upon progressive recognition of profits from Parc Botannia in 2018 and 2019.

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