Wing Tai’s 1QFY19 revenue rose 8% YoY to S$77.9m, largely on the back of higher contribution from development properties, attributable to the sale of vacant land at Langgak Golf in Kuala Lumpur.

Without the repeat of significant gains from the disposal of subsidiary companies in 1QFY18 (e.g. Huai Hai project in Shanghai), PATMI fell 87% YoY to S$2.2m.

After accounting for the group’s foreign exchange loss and gain on disposal of PPE, we deem this set of results to be under our expectations.

We note that the group continues to expect buying sentiment for private residential property in Singapore to remain subdued, following the property cooling measures announced in July 2018.

Separately, with more than 90% of units launched in Phase 1 of the group’s Malaren Gardens project already sold, we understand that plans to market Phase 2 are in the works.

We maintain our BUY rating and fair value estimate of S$2.41 for now.

Source: OCBC Research - 29 Oct 2018