Coincidentally, Wing Tai just announced its FY2012 results and it was the last developer to announce results for the Apr-Jun quarter.
Wing Tai is a company with generally 3 core businesses.
(http://www.wingtaiasia.com.sg/Businesses/Retail/)
(1) High-end Property development
(2) Rental from Investment properties
(3) Retail / F&B
Its largest shareholders are the Cheng Brothers at slighty > 50%.
Some key numbers (based on FY2012 financial statement & presentation slides)
Number of shares issued (including treasury shares): ~794m
Current share price: S$1.51
NAV: S$2.69
Ppty development EBIT:$194.3m
Investment Property EBIT: S$33.9m
Retail EBIT: S$29.7m
Retail EBIT: S$29.7m
TOTAL NET PROFIT : ~S$263m
Full year EPS: ~$0.31
My analysis
Truth be told, I only spotted Wing Tai in March this year and it is not a company I am very familiar with.
This explains why I do not have a large position in it yet.
Thus I prefer to give a simple and general analysis on it rather than a detailed one.
I bought it for only a few reasons. To put it simply:
A) Huge discount to NAV - high margin of safety
B) For a property developer, it gives a very high dividend protection versus my buy px of $1.28
(Historically gave $0.04 to $0.07 in recent years). Compared to others like CityDev/SC Global, it
seems a value-for-money.
C) Its Balance Sheet is damn strong (Gearing 18%, flush with cash)
D) Its Cashflow Statement is damn healthy (Net Operations + investments + financing = +ve)
E) Diversification of income source including involvement in retail of major brands like G2000 and
Uniqlo (though not a high % of income, this segment had been consistently growing)
F) Key Risk factor though is if there is going to be a protracted downturn to the high-end property market. But given its strong balance sheet, Wing Tai should be able to weather any downturn due to its holding power, or even take advantage of it in a big way.
This explains why I do not have a large position in it yet.
Thus I prefer to give a simple and general analysis on it rather than a detailed one.
I bought it for only a few reasons. To put it simply:
A) Huge discount to NAV - high margin of safety
B) For a property developer, it gives a very high dividend protection versus my buy px of $1.28
(Historically gave $0.04 to $0.07 in recent years). Compared to others like CityDev/SC Global, it
seems a value-for-money.
C) Its Balance Sheet is damn strong (Gearing 18%, flush with cash)
D) Its Cashflow Statement is damn healthy (Net Operations + investments + financing = +ve)
E) Diversification of income source including involvement in retail of major brands like G2000 and
Uniqlo (though not a high % of income, this segment had been consistently growing)
F) Key Risk factor though is if there is going to be a protracted downturn to the high-end property market. But given its strong balance sheet, Wing Tai should be able to weather any downturn due to its holding power, or even take advantage of it in a big way.
My concluding thoughts
This seems to be a very good company though and I initiated a small position purely on these glaring positives as it seems too good to be missed when I saw it at $1.28.
I will research more about this company in due course and just might add on if the price falls.
:-)
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