News analysis : Stepping up investments in Singapore
- New venture in Singapore in collaboration with ultimate shareholder, the Ng family
- Strong financials for further investments after this acquisition
- BUY with HK$12 TP
Sino Land’s 25%-held joint venture has exercised the call option to acquire Golden Mile Complex (GFA: 56,651sm) in Singapore for S$700m or c.HK$4bn. Its ultimate major shareholder, Ng family, also has a 25% stake in this joint venture with the remaining 50% held by Perennial Holdings Private Limited. This marks Sino Land’s second investment in the Singapore property market in collaboration with the Ng family within one year. Currently, property assets in Singapore makes up just 6% of the company’s gross asset value.
The property will be redeveloped into a new mixed-use development which comprises of residential, office, retail and other components as approved by the Singapore authority through constructing new buildings, and conserving and revitalising the existing ones.
In our view, this acquisition should not prompt any meaningful NAV enhancement immediately given the project size.
Sitting on net cash holding of HK$38.8bn as of Dec-21, Sino Land remains financially sound for pursuing more new investments following this acquisition in Singapore.
The stock is trading at 53% discount to our appraised current NAV with estimated dividend yield of 5.3% for FY22. Maintain BUY.