SINGAPORE (Aug 16): OCBC is maintaining its “buy” rating on Wheelock Properties with an estimate fair value of $2.27 on the back of a healthy set of 2Q17 results.
The group reported a 3.4% increase in its 2Q17 earnings to $36.5 million, mainly due to higher sales from Scotts Square and the Fuyang City project in China, as well as lower selling and marketing expenses, partially offset by lower sales at Ardmore Three and The Panorama and lower interest income from the group’s investment in quoted securities.
See: Wheelock Properties records 3.4% rise in earnings to $36.5 mil
However, Wheelock saw its revenue decline by 57.2% y-o-y to $128.7 million, attributed to lower contributions from project developments.
In a Tuesday report, analyst Eli Lee says, “All considered, we deem this quarter’s results to be fairly healthy and in line with expectations.”
The analyst deems that Wheelock has achieved a respectable level of sales across its launched projects despite a relatively muted primary sales activity in the group’s high end segment in 1H17.
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Meanwhile, about 85% of Ardmore Three has been sold and Panaroma is currently fully sold.
Scotts Square also reported an overall occupancy rate of 82%, with 88% of the units sold and 28 unsold units earmarked for lease.
The group’s Fuyang City project in China saw about 96% of units already sold.
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Wheelock’s balance sheet remains solid with $447.7 million in cash and equivalents and is in a net cash position.
Shares in Wheelock are trading at $1.83 as at 11.26am.
