Sing Holdings

Not vested.

Business Times - 20 Sep 2010

Sing Hldgs buys two properties for $77.3m

SING Holdings has inked a deal to buy Robin Court and the next door 1 Robin Drive for a total $77.33 million.

This works out to about $1,363 per square foot of potential gross floor area.

No development charge is expected, Sing Holdings said in a regulatory filing with the Singapore Exchange yesterday.

The two freehold District 10 properties have a combined land area of about 40,518 square feet and are zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area).

Robin Court involves a collective sale and is subject to approval from the Strata Titles Board.

The properties were sold through a tender exercise handled by Credo Real Estate and which drew 10 bids. Sing Holdings was the highest bidder. When the tender was launched, the asking price was indicated as $66 million to $74 million.

The 1H (ended 30Jun10)-FY10 results announcement, first released on 2Aug10), makes very interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...D0033B5F6/$file/SHL_1H2010.pdf?openelement

Obviously, we should focus on the potentially very profitable "The Laurels" project (70%-owned by Sing Holdings) located at Cairnhill Road. With the project already 84% sold as at 30Jun10, Sing Holdings stands to book into its P&L, the related $574.4m in revenue and 70% of the related profit, progressively in 2H of FY10 through FY12 based on construction progress. Assuming similar pricing, the remaining 16% unsold units could fetch another some $110.0m. There is every reason to believe that "The Laurels" alone will yield Sing Holdings very substantial profits, bearing in mind the related construction costs the condo have been substantially 'locked in', based on the recent award of the building contract to Lian Beng Group for approx. $95.0m.....
http://info.sgx.com/webcoranncatth.nsf/V...C00362216/$file/AwardofContract.pdf?openelement

I believe it is reasonable to expect Sing Holdings' EPS and NAV/share to jump and surprise positively in the next few reporting periods.....

Here is the view of Kevin Scully on Sing Holding land bank replenishment.

"Given that Sing Holdings has utilised most of its land bank with the bulk of the Laurels and BelleRive sold, the key to unlocking the discount to its NAV from the profits of these projects is the rebuilding of its landbank. I mentioned this many times to investors in various investment seminars and conferences. This purchase while small at $77.3mn compared to the Laurels is in a prime location and even after adding S$300-400 psf for contruction is still able to generate a decent profit for Sing Holdings given that recent transactions in the same area are selling today at S$1900 to S$2200 psf."

see the following for his full view

http://www.netresearch-asia.com/netresea...log_no=584

By the way, one of the readers make an interesting comment on "Lafe" as an undervalued property counter. Besides, he also mentioned about Heeton and Hiap Hoe.

This is an interesting company. My gf bought it, and I have been reading their ARs.
Sing Investments as well.

(07-12-2010, 09:19 AM)Behappyalways Wrote: Up to now The Laurels is 85% sold and last week when I went to the site to take a look, the construction are in progress. They should start accounting for higher % of completion in this quarter.

You're our independent "The Laurels" construction site monitor .

Thank you for your construction progress updates

vested.

Wow!! November 10 seems like a good month for Sing Holdings "The Laurels" project.

It's now closed to 87% sold..hmm waiting for the company to report a good set of Full year result and dividend .

Behappyalways-san,

Thanks for your update.

In your opinion, what is a fair value for Sing Holdings?

In Kevin Scully's blog, he pointed out that Sing Holdings would have to replenish their landbank before the discount to it's NAV can be unlocked.

Couldn't really understand why...would appreciate if you can help explain. Thanks!

Hi BeHappyAlways-san,

Thank you for your invaluable inputs. Interesting perspective that you have there...using ROE as an investment criteria for Sing Holdings, instead of the usual NAV method. But I guess with all their projects almost fully sold, and profits to be recognised over the next 2-3yrs, using ROE makes sense as well.

The key issue here is that after 3 years, what's next for Sing Holdings? Main risks include them not being able to replenish their landbanks and launch new projects....or the property market going into a slump, and nobody wants to buy properties. Maybe that's why Kevin says that the key to unlock Sing Holdings' discount to NAV lies in the replenishment of their landbank. Anyway, I also posed that question to Kevin in his blog. Let's see what he says in his reply.

(Vested )

That's a good observation on the management's intellegent allocation of capital.

On a separate note, Tuan Sing surged 20% today after Business Times ran an article on the company being severely undervalued.

Do you think Sing Holdings is next?

it is not easy to be a niche property development player.

it is dangerous to agressively replenish landbank or not replenish landbank.

must be done at proper time and appropriate level...