Results First Take: FY22 net profit 151% above estimate, driven by fair value gain
(+) FY22 net profit 151% above estimate
- FY22 revenue in line with our estimate at S$965.5m, contributed mainly by the higher progressive recognition of sales from the Group’s residential projects in Singapore
- Other income more than doubled to $354.6m due to higher fair value gain from the Group’s investment properties, Guoco Tower and Guoco Midtown
- Disposal of its Vietnam subsidiaries completed, resulting in a net profit from discontinued operation of $14.3m
- Profit attributable to equity holders of the Company for the year more than doubled to $392.7 million, from S$169.1m in FY21
- Dividend of 6 Scts per share declared, in line with our estimate
- NAV improved to S$3.86 as at 30 June 2022 from S$3.60 as at 30 June 2021
(+) Strong performance in property development business (as at 30 June 2022)
- Meyer Mansion: 79% sold
- Midtown Modern: 75% sold
- Midtown Bay: 38% sold
- The Avenir: 76% sold
(+) Encouraging performance in property investment business
- Rents for CBD Grade A offices continued to rise, up 2.7% in 2Q22 to S$10.74 psf per month from the previous quarter, which is just 0.6% below the pre-pandemic peak of S$10.81 in 4Q19
- Guoco Tower: occupancy rates for Guoco Tower’s offices and retail units at 100%; positive lease reversions
- Guoco Midtown: 60% pre-commitment take up across highly diversified group of industries, including several deals in advanced stages of negotiation
- 20 Collyer Quay: occupancy rate of 92%
- Guoco Changfeng City: commitment rate of c.85% while retail mall fully leased out
(+) Positive catalysts to look out for
- Lentor Modern: mixed-use development expected to launch in 3Q22
- Lentor Hills Road Site (Parcel A): residential development in the pipeline
We currently have a BUY recommendation and TP of S$2.30. More updates to follow after analyst briefing.
