• Wing Tai's 4QFY6/18 and FY6/18 results boosted by associate's disposal gains.
• FY18 core net profit was above expectations at 651% of our forecast.
• Improved residential sales in Singapore also boosted bottomline.
• Recurrent income accounted for a small 10% of FY18 topline; the group plans to explore acquisition opportunities for income yielding assets.
• Maintain HOLD, Target Price at S$1.97.

Results Highlights

Wing Tai reported 4QFY6/18 net profit of S$S$129.8m (vs. S$9.5m in 4QFY6/17) on an 80% increase in turnover to S$105.8m. The surge in bottomline was largely due to higher-than-projected associate contributions of S$115.3m and a S$12.6m fair value gain on investment properties.

For FY18, Wing Tai reported net profit of S$218.8m (EPS: 27.47 Scts) vs. S$20.1m a year ago. FY18 core net profit was above our expectations at 651% of our and 1,039% of Bloomberg consensus forecasts. It proposed total DPS of 8 Scts (3 Scts final, 5 Scts special), translating to a yield of 4%.

Source: CGS-CIMB Research - 28 Aug 2018