LeeSzeHao portraitLee Sze Hao, CEO of Sing Holdings, with a portrait of his father, Lee Fee Huang, the founder of the company.
 NextInsight file photo
Sing Holdings' share price has moved up 17% in the past two months (from 35.5 cents to 41.5 cents).

Its CEO, Lee Sze Hao, bought 400,200 shares at 32 cents in Oct 2016. About four weeks earlier (Sept 2016), Sing Holdings and its 30% JV partner, Wee Hur Holdings, secured a site near Jalan Kayu to develop a condo project.

Their successful bid price of $287.1 million, or $517.03 psf ppr, was just a whisker ahead of China Construction's ($517 psf ppr) and Allgreen Properties' ($516.7 psf ppr).

The showflat viewing for the project named Parc Botannia is in Oct 2017 while the preview launch, November 2017. Last week, on 30 Aug, KGI Securities issued a report on Sing Holdings.

The following is an excerpt from a KGI Securities report by its head of research, Joel Ng:

Within walking distance of Jalan Kayu, the site is less than 100 m to Thanggam LRT Station which is one LRT stop away from Seletar Mall.
Photo: http://parcbotanniasingapore.com
Riding on recent upturn in property sentiments


Event
Short-term catalyst from launch of its Fernvale private residential project. Sing Holdings is expected to launch it 735-unit private residential project at Fernvale Road in the next two quarters.

Sing Holdings

Share price:
41.5 c

Fair Value: 
54 c

Going by the recent upturn in new property sales transactions, we expect its upcoming launch to be able to sell well.

High Park 
Residences - developed by Chip Eng Seng and located just next to Sing Holding’s project - fully sold all 1,399 units within 20 months from launch despite a weak property market in 2015 and 2016.



Upturn in property sentiments. Singapore property prices have declined for a consecutive 15 quarters, with home prices lower by around 12% from their peak in 2013. However, sentiments have started to improve lately, going by the increased transactions and slower decline of property prices in the last two quarters. Singapore developers have sold a total of more than 7,000 private homes in the first seven months of 2017, a 50% YoY increase.

Valuation & Action
JoelNg10.16"We recommend a BUY with a fair value of S$0.54, based on a 30% discount to its RNAV of S$0.77. Our fair value is an implied 0.83x FY16 P/B. Better-than-expected selling price of its Fernvale project may provide a short-term upside catalyst for the company. We have assumed an average selling price of S$1,000 psf compared to recent transactions around the area of $970 to 1060 psf."

-- Joel Ng (photo),
Head of Research,
KGI Securities

Impact
We estimate Sing Holding’s RNAV to be S$0.77 following the sale of its BizTech Centre, Robin Residences, and its private residential project at Fernvale Road (See Figure 2 for details on each property).


Risks

Sing Holdings does not have any more projects after its Fernvale development. The company has diversified into the Australian hospitality business but upside may be limited in the short-mid term in this business segment.


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