Wing Tai Holdings - DBS Research 2022-08-29: FY22 Results: Taking Flight!

Wing Tai Holdings - FY22 Results: Taking Flight!


Highlights of Wing Tai's FY22 Results

FY22 revenue up 12% y-o-y, broadly in-line with our estimates.

  • Wing Tai (SGX:W05)'s FY22 revenue of S$514.6mil, up 12% y-o-y, helped by higher contribution from development properties, largely from progressive sales from The M at Middle Road and additional units sold in Le Nouvel Ardmore.
  • In FY22, Wing Tai sold 207 residential units (36 in Singapore, 171 in Malaysia) with an aggregate sales value of S$177mil (S$137mil in Singapore, S$40mil in Malaysia). However, FY22’s operating profit declined 11% y-o-y due to fewer property units sold at Le Nouvel Ardmore.
  • As of June 2022, ~93-94% of The M at Middle Road and Le Nouvel Ardmore were sold. Going forward, we assume The M at Middle and Le Nouvel Ardmore to be fully sold by FY24F. We also assume the redevelopment and a 20% sale of the recent Lakeside Apartments en-bloc by FY24F, supporting revenue growth over the medium term.

FY22 net profit grew 222%, above our estimates.

  • Wing Tai posted a FY22 net profit of S$140.2mil (FY21: S$36.3mil), above our FY22F estimates of S$45.2mil, driven by strong associated and JV income from Wing Tai Properties Limited and Uniqlo JVs.
  • Further, the FY22 effective tax rate declined to 15% (FY20/21: 76%/85%) due to the absence of one-off tax provision in previous years. Going forward, we assume an effective tax rate of 15% and associated and JV income to normalise to S$41mil/S$48mil in FY23/24F.
  • In our view, we like Wing Tai’s recurring income which we believe could support the Group’s overall earnings as it navigates the property market and build its development pipeline.

FY22 dividends a positive surprise.

  • In lieu of Wing Tai's strong net profit performance, a final dividend of S$0.03 and special dividend of S$0.03 is proposed for FY22, translating into a dividend yield of 3.7%. This is above our initial FY22F dividend estimate of S$0.03.
  • Going forward, we assume a steady dividend pay-out of S$0.03 cents, aligned with Wing Tai's historical final dividend declared, which translates into a dividend pay-out of 37%/50% for FY23/24F. See Wing Tai's Dividend History,

Healthy balance sheets.

  • Healthy balance sheets with a FY22 gearing ratio of 2% (FY21: net cash) and effective interest cost of 3.8% (FY21: 4.1%). Wing Tai has among the lowest gearing ratios among its peers in Singapore. A gearing ratio of 30% could result in more than S$0.8mil in acquisition firepower.

Positive catalysts.

  • Positive catalysts include property investment and redevelopment opportunities e.g., redevelopment of Lakeside Apartments en-bloc and the recently acquired freehold office building at 464 – 466 St Kilda Road, Melbourne.
  • Wing Tai's management has guided that the Group will continue to look to build its development pipeline and be selective on upcoming government land sales/en bloc tenders, and seek accretive acquisition opportunities, which could catalyse an upside to its RNAV.

Wing Tai - Valuation & Recommendation

  • Maintain BUY recommendation on Wing Tai with unchanged target price of S$2.05. Our valuation is based on an SOTP-based RNAV with a 50% holdings discount.
  • Our target price for Wing Tai translates into an implied P/NAV ratio of 0.48x, which is aligned with +1 standard deviation of Wing Tai’s 4-year historical P/NAV ratios.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Singapore Research Team DBS Group Research | Derek TAN DBS Research | Rachel TAN DBS Research | 2022-08-29
SGX Stock Analyst Report BUY MAINTAIN BUY 2.050 SAME 2.050

Previous report by DBS Research:
2022-06-27 Wing Tai Holdings - Spreading Wings On Upcoming Tenders

Relevant links:
Wing Tai Analyst Report,
Wing Tai Target Price,

Wing Tai Share Price History,
Wing Tai Announcements,
Wing Tai Dividends/ Corp Actions,
Wing Tai News Articles


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