SooChow CSSD Capital Markets (Asia) Pte Ltd (SCCM) initiated coverage of Oxley Holdings today. SCCM is a full service investment bank that specialises in Emerging Growth Companies across Asia and Japanese equities. SCCM's parent company is SooChow Securities Co Ltd, a state-owned financial services firm which is listed on the Shanghai Stock Exchange. Headquartered in Singapore, SCCM is the vehicle for SooChow Securities Co Ltd Group’s investment banking business in ASEAN and South Asia.
Excerpts from SooChow CSSD Capital Markets' 25-page report titled "Emerging Giant with Impeccable Track Record"
| Oxley Holdings (“Oxley") is a globally diversified property developer listed in SGX since 2010. From making its name in niche shoebox condo, Oxley has ventured into overseas developments from 2013 to become a global developer with impeccable track-record. Oxley has recently returned to SG market, actively acquiring en-bloc sites and an office building, just in time for market recovery. We initiate coverage with BUY and TP of $0.63/share.  Oxley will be entitled to 77.53% of the EUR164.20 million (excluding value added tax) sale tag for a 300-year lease of its project, No.1 Dublin Landings. |
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Globally diversified developer: Oxley made a mark in Singapore property map with its popular “Shoe-box” condo projects back in 2010-2013, earning them the “Shoe-box” king title.
Since listing in 2010 with a market cap of S$565m, the company has grown from 8 projects in Singapore to a globally diversified developer with 28 development projects in 12 different countries currently, potentially worth over S$19bn in GDV.
Timely return to “home” turf: Over the past year, Oxley has swiftly spent close to S$1.3bn in land banking, and has emerged as one of the largest residential pipeline holders in Singapore with ~3,800 units translating to GDV of ~S$5bn (attributable c.S$3.25bn); launching over the next 4-6mo.
In addition, Oxley invested S$0.66bn in Chevron House, with potential upside post AEI and office rent recovery.
| ♦ Initiating coverage with BUY |
| We initiate coverage with a TP of $0.63/share, pegged at 20% discount to our end-2018 RNAV. We project 11.4% EPS CAGR from FY18-20E as development projects are handed over. With Oxley’s active stance in the Singapore residential market, the key risks lie in government policy and executions. -- SooChow CSSD Capital Markets (Asia) |
Healthy B/S; potential REIT: With ~S$1.78bn of unbilled contracts vs debt of S$1.6bn over next 2-3 years, we think Oxley’s cash flow is secured and leverage will remain below 2x.
In addition, we estimate Investment prop to gradually rise, making up ~10% of FY20E revenue, lending stability to earnings.
Oxley’s hospitality assets value could reach S$1.4bn when completed – potential for a hospitality REIT listing in 2020.