Wing Tai’s 1QFY20 revenue rose 2% YoY to S$79.3m, largely due to higher contribution from the development properties, on the back of additional units sold in Le Nouvel Ardmore in Singapore.

PATMI grew by 209% from S$2.2m to S$6.8m, mainly attributable to a 20% reduction in the cost of sales and 13% increase in higher contributions from Wing Tai Properties Limited in Hong Kong and Malaren Gardens in Shanghai.

The group acquired a freehold property known as 4 Wesley Court for A$51m in Sep. The property is located within the Tally Ho Business Park, Australia, and is currently leased out as a data centre. This will be the third data centre amongst the group’s portfolio in Australia.

Wing Tai’s share price rose 7.25% YTD and currently trades at a consensus blended forward P/B of 0.48x, which is ~0.4 S.D. below the 10-year mean.

Maintain BUY, with fair value estimate of S$2.27.

Source: OCBC Research - 25 Oct 2019