by profittaker » Wed Nov 10, 2010 9:14 am
Phillip Securities Research Pte Ltd
HOLD (Maintained)
3Q2010 results within expectation with revenue $18.7 mil, increased 92.9% y-y. Net profit $1.71 mil, up 13.6 % y-y. Net profit shall improve on expectation of lower marketing expenses from now onwards Maintain hold and raise fair value from S$0.36 to S$0.38.
3Q2010 results
Sing Holdings posted $18.7 mil revenue for the 3Q10, 92.9% y-y higher than the same period last year. Net profit was $1.71 mil, 13.6% y-y higher than the corresponding period last year. For the 9 months ended 30 Sept 2010, revenue increased by 1.8 percent to $59.22 mil, compared to $58.16 mil in the same period last year. Net profit however dropped by 43.3% to $2.1 mil, compared to $3.7 mil in the corresponding period last year. The lower bottom line ytd was mainly attributed to its marketing expenses incurred for The Laurels which were fully expensed in the period.
Sales progress
As at 3Q2010, about 94 percent and 84 percent of the units in BelleRive and The Laurels had been sold. Sing Holdings also sold 1 more unit in BizTech Centre, a light industrial building, in the quarter. In terms of cash flow, the company collected $14.2 mil of progress payments for the two residential projects and $1.9 mil of sales proceeds from BizTech Centre in the
quarter.
Earnings estimates for FY2010E to FY2012E
The results thus far are very much on track to achieve our estimates for FY10E. While the net profit is only halfway to our estimates of $5.2 mil for FY10E, we expect it to catch up in the last quarter as the marketing expenses for The Laurels should decrease from now onwards, mainly because the showflat had been demolished to make way for building construction, and
any further marketing activities shall resume towards the completion of the project. As the BelleRive is due for TOP in 1Q2011, turnover in FY11E will be attributed mainly to The Laurels. The 1 and 3 Robin Drive is expected to start contributing to earnings from FY12E onwards if sales can begin by 2H2011.
Maintain Hold and increase target price from S$0.36 to S$0.38
We maintain our RNAV estimate at S$0.51 per share but decrease the discount to RNAV from 30% to 25% on expectation of lower expenses from now onwards. As a result, fair value is increased from S$0.36 to S$0.38, representing an upside of 10.14% over the latest closing price. We thus maintain our Hold call.
