Roxy Pacific - undervalued

48 cents liao! More and more investors recognise the gem that Roxy is....
[url=http://www.nextinsight.net
/story-archive-mainmenu-60/916-2012/4921-roxy-pacific-]ROXY-PACIFIC: After record profit in FY11, $600 m in revenue yet to be recognised[/url]

Time to take a breather? Already hit 52 cents.
A few more projects set to launch -- if successfully sold out, the stock could rise beyond 55 cents.

Just announced : Substantial shareholder bought 309,000 at 51.1 cents on Wednesday.

info.sgx.com/webcorannc.nsf/Announcement...00D9002?opendocument

Written by Reuters
Tuesday, 20 March 2012 10:00

OCBC Investment Research raised its rating on Singapore property firm Roxy Pacific Holdings to buy from hold, citing the company’s strong sales last month.

It raised its price target on Roxy $0.62 from $0.45.

“At the current juncture, we judge that Roxy now warrants a lower restated net asset value discount at 30%, versus 40% previously, due to its more favorable risk profile,” the brokerage said.

Roxy’s shares were up 0.9% at a record $0.56. The stock has gained 42% so far this year.

Good observation by DMG & Partners today:

According to press reports, a JV project Natura at Hillview Terrace by Roxy-Pacific Holdings and Macly Group is further shrinking the square footage of family sized homes with a 3-bedder measuring at only 635 sf. This is versus the typical size of a 3-rm units usually between 1,000 to 1,500 sf.

This trend looks set to continue for now, with Macly Group following on the success of Guillemard Edge with Natura at Hillview Terrace. We have been highlighting in recent months, "shoe-box" or small format units have been gaining strong traction with property buyers. This follows on from the strong take up of small format units in Parc Rosewood, Nautical as well as most recently Guillemard Edge.

With a lower quantum requirement c.S$400,000-S$500,000 for selected units, this may likely lower the bar for property investment by the mass segment and to a lesser extent occupation by young couples with a lower size requirement. This is a positive for relative smaller sized/integrated developers likely more nimble and decisive in "cutting up" projects into small format units that benefit from the strong take-up in this segment, including Fragrance Group, Roxy-Pacific Holdings, Sing Holdings and Hiap Hoe.

The Straits Times had an article on page 1 today which was titled: “3-bedroom condo unit at 635 sq ft: A new low?”

I wonder if the buyers have any real idea of the size of the three-bedders. Are the buyers the ones who will live in them or are they investors who will look for people to live in them? Makes a hell of a lot of difference, if you think about it.



By Gan Yu Jia

'HONEY, I shrunk the house,' could well be the tagline for a new, swanky condominium in Bukit Batok. A three-bedder at Natura at Hillview Terrace, a joint venture between Roxy-Pacific Holdings and Macly Group, measures just 635 sq ft.

That is smaller than a squash court and slightly bigger than five HDB carpark spaces. Real estate consultants said a typical three-bedroom apartment occupies 1,000 to 1,500 sq ft of space.

Market watchers said Roxy-Pacific appears to be setting a trend as far as shrinking three-bedroom units is concerned.

They noted that another of the company's projects, Treescape in Telok Kurau, also features micro three-bedders which start from 603 sq ft. All 32 units have been sold since the project was launched, of which 25 units were sold last month at a median price of $1,401 per sq ft.

But unlike Treescape, which is a boutique development, Natura is a full facilities condominium with 193 units.

It is unheard-of for a mass market project here to have three-bedroom units of such a compact size.

Mr Ken Yeo, projects director of Macly Group, has defended the size of the apartments.

'We've designed the building in such a way that the wall can be taken out, so that you can open up the living room to be of a bigger space. That's what we mean by 'efficiently designed',' he said.

Noting that all of Macly's previous shoebox projects were sold out within one month of their official launches, Mr Yeo added that Macly has not received any complaints that 'Mickey Mouse apartments are not liveable'.

He predicts that owner occupiers who opt for such units are likely to be singles or childless couples who prefer a smaller living space.

Mr Tan Kok Keong, OrangeTee's head of research and consultancy, said that it is difficult to predict if such units will be well-received by the public.

'If you use Hong Kong as an example, yes it's liveable, but whether it's the kind of quality of life that people can get used to is something we actually won't know until the project is completed,' he said, referring to small flat sizes in Hong Kong.