Ho Bee has just released their full year results for FY17 which I’d do a quick review on.
Full year net profit for FY17 came in at $249.3m, which is about 15% year on year increase. This was broken down into operating profits of $72m, share of Shanghai JV associates profits of $99.3m and a fair value gain of $78.1m.
Rental income came in stronger this year at $147.4m, which is a slight growth from the previous year. Q4 rental income came in stronger at $37.7m, due to purchase of Lombard street during the financial year. If we annualize this, rental income would come in at about $150m per year.
I think we’ll see a stronger rental income play in 2018 as the company continutes to gear up acquisition opportunities in the UK. There were rumors about 70 Mark Lane which they are bidding. If successful, this will be one of the big acquisitions for them.
Shares of profits from associates came in very strongly this year as well, which I highlight as a big bonus addition in my last previous post here.
It came in close to $100m for the year with distribution of dividends in cashflow coming in at $34m. This is most probably the reward where they dish out the special 2 cents dividends this year.
In terms of residential, there is guidance that seems to appear the company is ready to put their Sentosa properties back into the markets. This should boost the development properties with other recent launched hotcake Martin Modern more than 90% sold.
In terms of balance sheet, they’ve been gradually reducing their loans and gearings, and healthy ample cash of $97m to gear up another acquisitions.
I like what I see there.
Final dividends was recommended at 8 cents, which is a 30% increase from the previous year of 6 cents and they also dish out a special dividend this year at 2 cents, which brings the total dividend to 10 cents.
At 30 lots for me, that would be a decent $3,000 in my pocket by May. Looking forward to that.
Nav grows to $4.70, which is an exemplary case of one of the typical developer play with the highest ROE churn out. You can view my roe table here.
At current valuation, I think this is a severely undervalued play for one of the best developer listed here.
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