Roxy-Pacific’s 4Q17 revenue fell 53% YoY to S$43.32m, due largely to drops in the group’s property development and property investment segments. The group’s property development arm saw lower revenue recognition from a number of local projects that were completed in 4Q2016 and early 2017. Revenue from the group’s property investment segment also dropped following the sale of 59 Goulburn Street in October 2017.

We note that 4Q17 saw gross profit margin improve to 28%, compared to 22% in 4Q16 on the back of higher margins from the hotel ownership segment. All-in, PATMI for the quarter fell 39% YoY to S$7.3m.

Moving forward, we understand that management plans to launch six development sites for sale in FY2018, which should yield a total of 440 units. We maintain our BUY rating, but place our fair value of S$0.60 under review.

Source: OCBC Research - 14 Feb 2018