Excerpts from RHB report

Analyst: Jarick Seet

Maintain BUY with new TP of SGD0.31 from SGD0.36, 35% upside plus c.7% yield. Management is maintaining the sales target of its local portfolio by end-2020 and does not rule out lowering prices to attain faster sales.


Share price: 
22.5 c

31 c

Its overseas projects are likely to be delayed by 3-6months, depending on whether the lockdown globally is extended from COVID-19.

Cash flow survival is key. We held a conference call with Oxley. Management shared a few vital updates during this difficult time.

Cash conservation will be key to settle maturing debt over the next few years.

Going forward, it will not enter into new construction projects, and instead focus on completing projects with existing sales proceeds, as well as focus on offloading more of its local and overseas portfolios.

The company still aims to clear at least 90% of the local portfolio by end-2020.

Chevron house deal delayed due to global lockdown. We understand that the deal is still ongoing – it is crucial upon the sale of the retail podium and the banking units at a stipulated price in the agreement.

We understand that management is still in discussion with keen parties but any due diligence has been hindered by the local and global lockdown as well as restrictions in air travel. The worst case scenario sees Oxley having to repurchase the retail podium and sell it at a higher valuation when the situation improves.

hotels10.17Novotel & Mercure Hotels on Stevens: Running at 100% occupancy for 1-2 months housing quarantined residents for their two weeks’ isolation. Lower room rates are charged. Photo: Company
Stevens Road hotel at full occupancy for Apr 2020. Its hotel at Stevens Road is now being used as an alternative quarantine site for COVID-19 patients, with all rooms fully taken up.

With a 75% subsidy in labour cost by the Government, Oxley will likely generate profit for this deal due to lower operating cost incurred.

Special dividend

JarickSeet3.18“Management is comfortable with its current cash position and keen to reward shareholders with a special dividend this year.

"Based on its track record, key management has always opted for script dividend, so, even with a special dividend being paid, the company would likely be able to easily stump up cash for minority shareholders.”

-- Jarick Seet (photo), 
RHB analyst

Maintain BUY with lower TP of SGD0.31. Management is maintaining its sales target of 95-100% of its local portfolio by end-2020, and does not rule out lowering prices to attain faster sales as it entered the fray earlier than peers with a lower land price.

Its overseas projects in Dublin and UK are likely to be delayed 3-6 months, depending on whether the lockdown globally is extended from COVID-19.

Due to a delay in projects and drop in margins expected for local projects, we lower our RNAV valuation from SGD0.75 to SGD0.69. Our TP is based on a 55% discount to RNAV.

Key risks: Recession and a crash in property prices.

Full report here. 

Share Prices

Counter NameLastChange
AEM Holdings3.4300.010
Avi-Tech Electronics0.280-
Best World2.4500.020
Broadway Ind0.114-
China Sunsine0.470-
Food Empire0.7100.005
Fortress Minerals0.360-
Geo Energy Res0.330-
Golden Energy0.7900.005
GSS Energy0.045-0.003
ISDN Holdings0.5850.025
IX Biopharma0.119-
Jiutian Chemical0.082-
KSH Holdings0.340-
Leader Env0.062-
Medtecs Intl0.153-0.002
Meta Health0.024-
Nordic Group0.475-
Oxley Holdings0.1480.005
REX International0.220-
Sinostar PEC0.180-
Southern Alliance Mining0.600-
Straco Corp.0.495-
Sunpower Group0.355-
The Trendlines0.0970.002
Totm Technologies0.110-0.001
UG Healthcare0.1830.002
Uni-Asia Group0.8850.010
Wilmar Intl4.0700.010
Yangzijiang Shipbldg1.2800.040

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 553 guests and no members online