FY22 set to outshine FY21

  • Bottom-line growth. Even though LHN’s FY21 (YE 30 Sep 21) revenue declined 9.9% YoY to S$121mn, net profit increased 16.9% YoY to S$28.9mn.
  • Upgraded FY22 portfolio. The 4 residential properties acquired in FY21 and 1 residential property acquired in 1QFY22 are expected to commence operations in FY22. These 5 properties will add a total of approximately 204 keys to LHN’s Residential segment. In addition, full year revenue contribution is expected from the 2 newly acquired JV properties under the Industrial segment.
  • Prime area lease: Mount Elizabeth. Through LHN’s subsidiary Erinite Properties, the company has entered into a lease agreement with Eastern Realty for the Mount Elizabeth property, which is due to commence operations at the end of 2022. Approximately 400 keys would be added.
  • Potential spin-off. LHN has proposed to spin-off and separate the listing of LHN Logistics on the Catalist board of SGX.

We maintain an OUTPERFORM recommendation but revised our TP down to S$0.44 based on a lower EPS and an unchanged 6.0x FY22F P/E.