Wheelock Properties' (Singapore) (“WPS”) FY17 revenue was down 30.7% YoY to S$533.7m or 99% of our forecast, mainly due to lower sales at The Panorama and Ardmore Three – both developments have been completed sold since June and Nov 2017 respectively. FY17 gross profit was nonetheless up 12.6% at S$127.7m due to better margins.

Net profit almost doubled from FY16 to S$115.2m in FY17 or 95% of our forecast, mainly due to a S$55.7m fair value loss on WPS’s investment properties in FY16. Stripping out fair value changes on investment properties, FY17 net profit would have increased 2% YoY to S$116.1m.

A first and final dividend of 6 S cents was declared, which translates to an FY17 dividend yield of 3.2% against yesterday’s closing price of S$1.88. As at 31 Dec 2017, Scotts Square is 89% sold (301 out of 338 units), with marketing on-going.

In China, about 99% (781 of the 784 units) launched in Phase 1 and 2A of Yong Jing Shan (???) have been sold, with handover of duplexes and townhouses of Phase 2A in progress. The construction of the remaining highrise apartments for Yong Jing Shan is expected to complete this year.

Overall occupancy for Wheelock Place and Scotts Square Retail was 95% and 98% respectively. We maintain BUY on WPS but place our fair value of S$2.27 under review..

Source: OCBC Research - 28 Feb 2018