RHB Group Research analyst Jarick Seet has maintained “buy” on Oxley Holdings, with the same target price of 27 cents on the counter.
Oxley, on Jan 7, announced that private equity firm Dignari Capital Partners (DCP) invested up to US$80 million ($106.4 million) into the group via convertible bonds at 25 cents a share, representing a 13.4% premium to its share price before the signing of the agreement.
The investment, says Seet, should increase Oxley’s ability to repay the bond in April and invest in new projects abroad. Oxley’s management says it is also focused on completing its projects to ensure a continuous cash flow.
To Seet, the investment represents a “vote of confidence” into the property group.
DCP Funds have limited partners, including sovereign wealth funds and financial institutions, with over US$1 billion in assets under management (AUM).
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The convertible notes shall bear a coupon interest of 4.5% pa, calculated on an actual/360 day-count basis and is payable semi-annually.
The notes will mature in 24 months with an option to extend by another 12 months.
The stability of the Singapore property scene is another plus for Oxley.
As at August 2020, about 3,109 units – representing 79.3% of the group’s total portfolio – have been sold. By mid-August 2020, progressive collection amounted to some $3.4 billion.
During the circuit breaker period from April to June 2020, the group used virtual showrooms to showcase the layout of the units to potential buyers and management guided to experiencing pent-up demand for the residential units.
SEE: Oxley Holdings says GBP exposure ‘limited’
From Apr 2020 to early Aug 2020, Oxley issued more than 280 option-to-purchase agreements to the buyers, garnering sales of more than $330 million.
“Construction activities in Singapore have fully resumed, and the group can look to higher revenue and profit recognition in FY2021 ended June,” says Seet.
Oxley has several projects in the pipeline, which will enable it to realise the fruits of its labour and strengthen its balance sheet, adds Seet.
Oxley’s Royal Wharf project, with more than 98% sold, is expected to be fully completed before the end of 2QFY2021.
The residential blocks at Dublin Landings, sold to Greystar, will be progressively completed by 3QFY2021.
The Peak project in Cambodia has sold 87% of its units, and has just achieved temporary occupation permit (TOP) for the retail component while the residential and office towers are targeted for completion for the same period.
Shares in Oxley closed 0.5 cent lower or 2.1% down at 23.5 cents on Jan 12.
