SINGAPORE (Dec 12): DBS Group is the first brokerage to initiate coverage of Roxy-Pacific with a “buy” rating and target price of 69 cents.
This given the developer is poised to hit the Singapore market with seven freehold residential developments next year with a gross development value of $0.5 billion.
While the market may have overlooked Roxy for its size, DBS says Roxy was one of the earliest to stock up on its landbank in the current market cycle, three of which will be launched within 1Q18.
“We see this as a window for the group to capture the rise in buyer demand before its peers,” says lead analyst Rachel Tan.
In FY17, Roxy acquired four new commercial buildings in Australia and New Zealand and another hotel in Japan.
Its portfolio of its investment properties has grown close to threefold to $330 million. These properties will start contributing in FY18, thus raising contributions from investment properties to 35% in FY18 from 20% in FY16, according to Tan.
“Our target price of $0.69 is based on 30% discount to RNAV of $0.98. The stock currently trades at 1.2 times FY18 book value, below historical average. At its peak, Roxy trades at 2.3 times book,” says Tan.
As at 12.19pm, shares in Roxy-Pacifc are up 1 cent at 54 cents.
