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DBS: GuocoLand Ltd – Buy Target Price $2.30

Posted on August 30, 2022August 30, 2022 By alanyeo No Comments on DBS: GuocoLand Ltd – Buy Target Price $2.30
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. 

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Research - Equities Tags:Guocoland

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