Wing Tai reported that its 2QFY17 PATMI improved to S$2.1m from the low base of S$1.1m in the same period last financial year, mainly due to higher contributions from Wing Tai Properties Ltd in Hong Kong and Uniqlo in both Singapore and Malaysia, partially offset by lower development profits. In terms of the topline, we saw 2QFY17 revenues fall 50% YoY to S$60.9m similarly due to lower contributions from development properties.

Over the latest quarter, the group’s revenue contributions were mostly derived from The Tembusu in Singapore and additional units sold in Verticas Residences and Nobleton Crest in Malaysia.

Over the latest quarter, Wing Tai also launched for sale Malaren Gardens, a 301-unit residential development in Shanghai, and we understand that c.90% of the 138 units launched has been sold.

Overall, we deem this set of results to be broadly within expectations and continue to believe that the group remains well-positioned to ride out the current down-cycle with its healthy balance sheet.

Maintain BUY with an unchanged fair value estimate of S$2.37.

Source: OCBC Research - 7 Feb 2017