SINGAPORE (June 13): RHB likes Emerging Towns & Cities Singapore (ETC), a niche developer currently focusing on development projects in Myanmar and China.
Firstly, the group delivered topline growth of 92% y-o-y to $10.1 million in 1Q17, supported by ongoing revenue recognition of presold units at Golden City.
ETC also generated a gross margin of 27.7% due to the healthy profit margin from Golden City – a luxury mixed-use development in Yangon, Myanmar – and high margins from its rental units.
As of March 31, the group have sold 460 units of Golden City with a sales value of US$164 million ($226.8 million).
In an unrated report on Tuesday, analyst Goh Han Peng said, “Golden City is considered one of the most successful luxury projects in Yangon, having achieved an average price of US$250-320 psf in a challenging market.”
The group’s other project in Huizhou, China, is a resort-style residential development with a GFA of 552,000 sqf and Gross Development Value of RMB687 million ($139.8 million).
Most of the residential units have been sold, but 399 units were kept as holiday rental apartments to provide a source of recurring income.
“The group has a solid balance sheet, with net gearing of 16%. We expect future quarters to be underpinned by ongoing profit recognition from the existing presales at Golden City,” says Goh.
Shares of ETC are trading at 10 cents on Monday.
