Wing Tai Q1 Net Doubles To $61.8m

Source : The Business Times, October 31, 2007

Jump due mainly to 231% rise in share of profit of JV and associate companies

WING Tai Holdings has reported a net profit of $61.8 million for its first quarter ended Sept 30 - double the profit the property developer made in the comparable quarter a year ago.

Wing Tai said that the net profit improvement was mainly attributable to the 231 per cent increase in the share of profit of associated and joint-venture companies to $63.6 million, from the previous Q1's $19.2 million.

The higher contributions from the VisionCrest and Casa Merah projects in Singapore were the main reason for this increase, it said.

Revenue for the quarter fell 39 per cent to $100.2 million, from $164.8 million a year ago. Wing Tai said this was due to lower contribution from the development properties division.

It said that revenue on development properties for the current period was largely recognised from the units sold in Kovan Melody, The Meritz and The Lakeside.

Profits recognised from these three projects contributed to the group's $15 million operating profit.

Earnings per share was 8.58 cents for the reporting quarter, up from 4.29 cents a year ago.

Wing Tai said that no dividend has been recommended.

Looking ahead, Wing Tai said the property market sentiment in Singapore remains positive due to the buoyant economy.

'The group will be marketing several new residential projects in Singapore in the current financial year,' Wing Tai said.

These could include Newton Meadows, Belle Vue, The Floridian, Ardmore Point and Anderson 18.

In a note last month, Citi analysts reckoned that Wing Tai is one of the purest plays on the Singapore residential property market and one of the most sensitive to changes in residential property prices here.

Citi estimated that for every 10 per cent rise in property prices, the group's net asset value would rise by 7 per cent.

Citi also estimated that for its Helios Residences at Cairnhill, an average price of $3,000 psf, with a breakeven of around $1,100 psf could reap a pre-tax profit of over $400 million from this project alone.

In September, Wing Tai signed a memorandum of understanding to develop its first real estate project in China. The project, in Chengdu, is estimated to be worth about $160 million.

At the close of trading yesterday, Wing Tai shares ended at $3.46 per share, up 2 cents.