Under‐researched developer presents deep value.

We initiate coverage on Sing Holdings with a BUY rating and a fair value of S$0.56, based on a 40% discount to our RNAV estimates of S$0.94. Sing Holdings, a niche luxury developer that has recently
moved into the EC segment which has strong supply‐demand dynamics, currently trades at a massive 56% discount to its RNAV. With earnings visibility and huge cash inflows from pre‐sold units of The Laurels and two other launches, Sing Holdings will boast of a stronger financial position and a stable dividend over FY13‐15. We expectits pipeline of projects to add S$0.33 to its current NAV.

Sustainable earnings and strong cash inflows 
With another S$204mil worth of pre‐sold units of The Laurels to be recognized, along with a staggered launch of Punggol EC and The Robin Site in FY13 and FY14 respectively, Sing Holdings boasts of
strong earnings visibility till 2015. We expect PATMI to grow at 9.5% CAGR from 2013‐15, and a sustainable DPS of 1.6c in 2013‐15. This translates into a forward yield of 3.9%. We also expect massive cash inflows from progress payments to strengthen Sing Holdings' financial position and pave way for more landbank acquisitions ahead.

Strategic focus on ECs going forward 
We favour Sing Holdings for its selective focus on EC projects going forward, as we believe the EC segment enjoys favourable supply‐demand dynamics. Demand in this segment will remain robust, driven by affordability, a huge middle income class and lifestyle desire.

Compelling Valuations; BUY with FV of S$0.56, based on 40% discount to RNAV of S$0.94
We have a fair value of S$0.56 on Sing Holdings, based on a 40% discount to our RNAV estimate of S$0.94. Sing Holdings currently trades at a massive 56% discount to RNAV. At current price levels,
Sing Holdings offers a strong value proposition, on top of rewarding shareholders with a decent and sustainable yield of 3.9%. BUY.

Source: AmFraser