SINGAPORE (July 27): RHB continues to rate Yoma Strategic Holdings a “buy” with a target price of 78 cents on the back of better performance across all its segments.
Yoma’s automotive & heavy equipment and consumer businesses reported “impressive” results in 1Q18, supported by strong revenue growth of 55% and a 1.8% gross margin expansion.
This is in line with the group’s targeted goal of achieving a revenue split of 50% from its non-real estate businesses by FY20.
The group’s revenue from the sale of residences and land development rights also doubled due to the share of profits from the sales of residences at Galaxy Towers.
In a Thursday report, RHB says, “Yoma would continue to overcome the softness in the real estate market through the sale of smaller-quantum units, improving affordability. The group would also continue to strive towards increasing its recurring revenue base in the real estate business – as shown in the transfer of Pun Hliang Estate from development properties to investment properties.”
Yoma’s capital recycling efforts are also showing positive results as gains from revaluating its investment properties and non-core asset sale over the past two years were redeployed to focus on its core business.
To date, the group is exhibits positive results where its non-real estate businesses are growing rapidly, while its real estate segment is showing a nascent growth.
“While awaiting for the approval of the spin-off of its tourism assets, we do see further opportunities in the optimisation of Yoma’s capital structure,” says RHB.
At 10.44am, shares of Yoma are trading 1 cent lower at 60 cents.
