Results in line, bumper dividend proposed. Wing Tai reported a 102% YoY rise in headline FYJun13 PATMI to SGD531.1m. Excluding revaluation gains, core PATMI is estimated at SGD294m, up 94% YoY and in line with expectations. The recent launch of The Tembusu is met with encouraging response, with the estimated ASP at a better-thanexpected SGD1,500 psf. A bumper dividend of 12 cts/share is proposed, implying an attractive 5.9% yield. Reiterate BUY.

Strong year despite the challenges. Wing Tai’s strong earnings were partly contributed by the completion of the Verticas Residences in KL in 3Q FYJun13. Throughout the FY, Wing Tai managed to achieve SGD885m of residential property sales, mainly from 318 units in Singapore valued at SGD725m and 169 units in Malaysia, valued at SGD130m. UNIQLO, its fast-fashion JV in Singapore and Malaysia, also saw its EBIT contribution grow by a robust 36% YoY to SGD11.1m.

Warm response to The Tembusu. In mid-August, Wing Tai launched its 337-unit freehold development The Tembusu, which was met with good response. Options-to-purchase have been issued for 220 units, with ASPs at a creditable ~SGD1,500 psf. Wing Tai is in the midst of preparing the Prince Charles Crescent site for launch by 4Q CY13. Meanwhile, we understand that piling works have begun at the Guangzhou Knowledge City site, while the Luodian site in Shanghai is in the planning stage.

Opportunistic in replenishing land. Management reiterated that the probability of the Singapore property market turning down is everincreasing and will be selective in land acquisitions. Malaysia is deemed as its most attractive market in the near-term, while it will continue to explore opportunities in China (Tier 1 cities) and in Hong Kong.

Low gearing, attractive valuations. We reiterate our BUY recommendation with a TP of SGD2.78, pegged to a 30% discount to RNAV. We like Wing Tai for its low gearing and attractive valuations of 0.56x P/B and 0.51x P/RNAV. FYJun13’s high yield may be a one-off, but we believe a base yield of 3.4% is still sustainable

Source: Maybank Kim Eng Research - 28 Aug 2013