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Thread: Wing Tai holds prices for Ardmore condo despite Q4 profit dive

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    Default Wing Tai holds prices for Ardmore condo despite Q4 profit dive

    http://www.straitstimes.com/business...q4-profit-dive

    Wing Tai holds prices for Ardmore condo despite Q4 profit dive

    Aug 23, 2016

    Rennie Whang


    The mid- to high-end market for properties remains constrained but do not expect any discounts for Wing Tai's luxury project Le Nouvel Ardmore.

    The developer has sold seven of 43 units there at an average price of $4,000 per sq ft and is aiming to sell the rest at around the same price.

    "We believe it's a very rare development, not only in Singapore but in Asia. We have a strong balance sheet and will be holding the price," chairman and managing director Cheng Wai Keung told a briefing yesterday.

    While he does not expect any improvement for the high-end market, where prices have dived some 20 per cent from their peak, volumes are slightly better in the market for HDB upgraders, he noted.

    Sales methods such as discounts work better for this segment, he said, when asked about the company's strategy to move units at its other project here, The Crest.

    The company yesterday posted a 98 per cent drop in fourth-quarter net profit to $1.88 million, on the back of a 35 per cent fall in revenue to $140.69 million. Earnings dived 95 per cent to $7.08 million for the full year as revenue fell 20 per cent to $544.53 million.

    This was because projects that previously contributed to turnover - Foresque Residences and Helios Residences - did not contribute in the 2016 financial year.

    Revenue came from progressive sales of The Tembusu, additional units sold in Le Nouvel Ardmore in Singapore, The Lakeview in China and from the second phase of Jesselton Hills in Penang.

    The company declared a first and final cash dividend of three cents a share, similar to a year earlier. It also declared a special dividend of three cents a share. This was mainly due to the cash from selling its half-share in the development company of Nouvel 18 for $410.96 million last month.

    During the year, revenue from development properties was $329.8 million, investment properties $37.4 million and retail $169.6 million.

    Mr Cheng noted that the company closed about 30 to 40 non-profitable shops over the past year. "There doesn't appear to be light at the end of the tunnel (for the weak retail sector) in the immediate future," he said. Still, some of the company's brands, such as Uniqlo - which is set to open its flagship store here - are growing, he added.

    Earnings per share was 0.24 cents for the quarter, down from 14.79 cents a year earlier. Net asset value per share at June 30 was $4.04, against $4.07 a year earlier.

    The counter closed up a cent to $1.78 yesterday.

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    Default Wing Tai doubles dividend despite profit dive

    http://www.businesstimes.com.sg/comp...te-profit-dive

    Wing Tai doubles dividend despite profit dive

    Proposed full-year payout, which includes a special dividend, follows S$411m sale of half stake in Nouvel 18

    By Kalpana Rashiwala

    [email protected]

    @KalpanaBT

    Aug 23, 2016


    DESPITE posting a big drop in fourth-quarter and full-year net profit, Wing Tai Holdings has proposed to double dividend payout to shareholders to six Singapore cents for the year ended June 30.

    The payout, which includes a special dividend of three cents per share, is on the back of the group's recent S$411 million sale of its half-stake in the Nouvel 18 condo development - notwithstanding the fact that this has taken place after the close of the financial year. The sale was completed and Wing Tai received the proceeds in July.

    Wing Tai's posted a net profit of S$1.88 million for the fourth quarter ended June 30, 2016, a plunge from the S$115.94 million net earnings it reported for the year-ago period.

    The whittled bottom line was on the back of a 35 per cent revenue drop to S$140.69 million.

    Also hitting the bottom line was a 69 per cent drop in share of profits of associated and joint-venture companies to S$29.88 million - due to lower fair value gains on the investment properties of the group's Hong Kong associate Wing Tai Properties Limited.

    Revenue fell in Q4 FY2016 amid lower sales from property development - caused partly by the absence of contribution from two completed Singapore residential projects, Helios Residences and Foresque Residences which had contributed to Q4 FY2015 revenue.

    Earnings per share fell to 0.24 Singapore cent for Q4 FY2016 from 14.79 Singapore cents in Q4 FY2015.

    Net asset value per share dipped to S$4.04 as at end-June 2016 from S$4.07 a year earlier.

    The counter ended one Singapore cent higher at S$1.78 on Monday.

    Full-year net profit fell to S$7.08 million from S$150.30 million.

    Wing Tai chairman and managing director Cheng Wai Keung reiterated that Wing Tai will not be injecting its investment properties into the group's recently minted fund management unit.

    The new unit will have to find its own investment opportunities while Wing Tai shares its expertise and will put some money into the funds. How much Wing Tai invests will depend on the assets under management of the unit as well as the confidence shown by other potential investors.

    The group will be exiting its investment in a residential project in Guangzhou Knowledge City. In Baoshan district in Shanghai, where Wing Tai has a residential project, response has been positive to the marketing campaign that started last weekend. Wing Tai has also just started construction of a commercial project (comprising mostly office space with a retail podium) in Huai Hai in the centre of Shanghai.

    "In Suzhou, we still have one last piece of land which we acquired 20 years ago. We are now in the process of putting it up for planning approval," said Mr Cheng. "I'm still cautiously optimistic in the medium to long term about China".

    Despite policy and regulatory risks, China has two very important factors driving the property market - the rising middle class, and the country's huge population. "There is still a lot of demand that has not been satisfied," said Mr Cheng, arguing that there is under-provision of housing in the first and second tier cities. It is in the third and fourth tier cities that there is a housing oversupply, he added.

    Once the property curbs in China are lifted, demand will return to the first and second tier cities, he predicted. "I am quite bullish about China because they have the right ingredients for property growth."

    For Singapore, he acknowledged there is no denying that the tightening measures have been affecting buyers and developers. While some developers have been bidding bullishly for land as they believe the government policy in five years' time may be helpful to the property market, "I would rather watch carefully before I invest heavily in Singapore".

    Wing Tai said it will continue to sell units at its Le Nouvel Ardmore condo, which received Temporary Occupation Permit in April 2014 - but it will hold on to the approximately S$4,000 psf average pricing it has achieved for the first seven units in the 43-unit condo given the rarity of the prime-district asset.

    As for The Crest condo along Prince Charles Crescent, Mr Cheng said: "We understand our position in the market. We understand our competitors. We will keep things close to the (chest), so we can sell more before other people know what we are doing."

    In Melbourne, the group recently clinched a freehold car park property along Flinders Street, reportedly for over A$30 million. The income-generating asset also has some office and retail space.

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