@ CWG 1Q briefing: FY2016 profit triples to RMB 115m

CWG International's milestones in FY2016 that boosted its share price include: steady project launches in Australia and China, foray into US, adoption of dividend policy and share buyback mandate, removal from SGX watchlist, and launch of fund management company. (Bloomberg chart)

CWG International has made good its promise of paying a 1-cent dividend that it made during its 3QFY2016 briefing.

It announced the dividend together with a stellar FY2016 net profit attributable to shareholders that increased threefold from RMB 37.7 million in FY2015 to RMB 114.8 million in FY2016.

The stock opened at 19.8 cents on Thursday (16 February), up 4.8% overnight after the announcement. At this price, the stock is a 4-bagger compared to its price of 5 cents a year ago on 15 February 2016.

At 19.8 cents, the stock's dividend yield is 5.0%. Payout ratio is 28%.

Other highlights of FY2016:

1. Revenue was up 34% yoy at RMB 4.8 billion, lifted by delivery of two major property developments in Suzhou with higher average selling prices.
2. Strong pre-sales of RMB 4.6 billion for its China and Australia projects.
3. Target delivery of 6 projects with an estimated total saleable gross development value of RMB 5.5 billion in 2017.
4. Asssets under management by Richmont Capital, the Group's private equity unit, has increased to over RMB 700 million.

For more information, refer to its FY2016 financial statements here.

“Our name change to CWG International expresses the vision for our real estate segment as well as the education segment which we will focus on this year.”

- Qian Jianrong
Executive Chairman
CWG International

(NextInsight file photo)

“Presales in 4QFY2016 was equivalent to our full year revenue. Rapid sales growth means our gearing ratio will come down quickly.”

– Chua Hwee Song
Executive Director and CFO

(NextInsight file photo)

We have an internal target of annual earnings growth of 30-50% over the next few years. This translates into real estate presales receipts of RMB 40 billion by 2021. We plan to raise capital to help us finance this growth target.

This year, we also intend to expand our education infrastructure business segment.

We will inject a few schools into an education infrastructure vehicle. We intend to channel 20% of the tuition income into our education infrastructure vehicle, which will manage the schools.

We are targeting six k12 schools for this vehicle this year, including schools already owned by the Group as well as schools which we are looking to restructure and acquire. We are targeting annual revenue of S$20 million for each school.

We expect this segment to generate healthy profit because these are good schools and there is huge education demand in China.