Date of Report: 30 September 2024
Broker: Lim & Tan Securities Pte Ltd

Financial Performance for FY24

For the financial year ended 30 June 2024, Wing Tai Holdings recorded a total revenue of S$169.2 million, a significant decrease compared to S$476.3 million in the previous year. The decline was mainly due to lower contributions from development properties. Key developments contributing to revenue were the progressive sales recognized from The LakeGarden Residences in Singapore, Jesselton Hills in Malaysia, and the remaining units sold in The M at Middle Road, Singapore.

Despite the revenue drop, the Group posted an operating profit of S$22.5 million, down from S$26.9 million in the previous year. This decrease was primarily due to lower profit recognition from The M at Middle Road and the absence of contributions from Le Nouvel Ardmore in Singapore, which was fully sold in the prior year.

Net Loss and Asset Value

Wing Tai Holdings recorded a net loss of S$78.7 million for FY24, compared to a net profit of S$13.3 million in FY23. The Group’s share of results from associated and joint venture companies was a loss of S$58.6 million in FY24, compared to a loss of S$10.4 million in the previous year. The primary factor for the increased loss was Wing Tai’s share of a S$108.0 million loss from Wing Tai Properties Limited, largely due to impairment losses on development properties and fair value losses on investment properties in Hong Kong.

As of 30 June 2024, the Group’s net asset value per share stood at S$3.90, down from S$4.13 a year earlier. The Group’s net gearing ratio was 0.06 times as of 30 June 2024.

Dividend Announcement

The Board recommended a first and final dividend of 3 cents per share for the financial year ending 30 June 2024. Notably, Wing Tai has consistently paid out final dividends of 3 cents per share for over a decade, with special dividends contingent on the Group’s performance.

Progress in Property Development

In June 2024, Wing Tai won the bid for a 99-year leasehold prime residential site in River Valley, Singapore, under the Government Land Sales programme. The Group plans to transform the centrally located site into a luxurious residential development with over 400 units.

Wing Tai’s first sustainable residential development, The LakeGarden Residences in western Singapore, received the prestigious Building and Construction Authority (BCA) Green Mark Platinum Super Low Energy certification. Construction, which began in March 2024, is proceeding as planned, and by the end of June 2024, more than 45% of the 306 units had been sold.

In addition, The M at Middle Road in Singapore, a mixed-use development, has been fully sold, with all residential and commercial units handed over to the owners.

Retail Business Performance

On the retail front, Wing Tai’s businesses in Singapore and Malaysia focused on enhancing customer engagement and improving shopping experiences through new store concepts and innovative marketing initiatives. The Group rebranded its Malaysian customer loyalty programme as “wt+” to align with its Singapore counterpart, allowing customers to enjoy promotions across both markets.

The Group’s joint venture with Fast Retailing for UNIQLO continued to be a strong brand in Singapore and Malaysia.

Outlook and Strategy

Wing Tai remains cautiously optimistic despite challenges in the global economy. With a firm foundation and resilient balance sheet, the Group believes it is well-positioned to overcome challenges and seize future opportunities. The report highlights that Wing Tai’s core business remains profitable, and a significant portion of its losses were due to non-cash impairments on its properties in Hong Kong. The anticipated rate cut cycle could benefit property developers, including Wing Tai, as dovish monetary policy is expected to provide a boost to the sector.

At S$1.36 per share, Wing Tai is capitalized at S$1.04 billion and trades at an undemanding price-to-book ratio of 0.35x with a 2.2% dividend yield.