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Riding High On The Sentosa Wave
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Nostradamus
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25-Sep-2006 18:41
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CIMB-GK has upgraded its rating to "outperform" from "neutral" and increased its target price for the stock to $1.01 after the property developer bought a residential condominium for redevelopment in the prime Orange Grove Road area for $142m. Ho Bee will also pay the government $11m to redevelop the site. "The stock has declined about 3% since we downgraded our recommendation to 'neutral' and we believe upside is not attractive, especially after the revised net asset value-accretive acquisition," CIMB-GK said in a note to clients. Apart from this latest acquisition, potential higher selling prices for Ho Bee projects on Sentosa Cove and Fernhill Grove could provide a catalyst for the share price, it said. |
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Nostradamus
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25-Sep-2006 11:43
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DBSV has raised its target price to $1.16 after the property developer bought a second redevelopment site in the prime Orange Grove residential area for $142m. "Ho Bee remains focused on the high-end residential segment. With prices of luxury homes rising, we expect Ho Bee to be a prime beneficiary," DBSV said in a research note. "The new land acquisition in the Orange Grove vicinity should contribute earnings of $13.8m, assuming selling price of $1,500 per sq ft, with breakeven cost estimated at $1,300." |
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Nostradamus
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15-Sep-2006 17:15
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CIMB-GK said it has downgraded its rating to "neutral" from "outperform" given the company's uncertain earnings outlook. It is keeping a price target of $0.95. "While Ho Bee's discipline in acquiring development sites is commendable, building on its portfolio in the midst of rising land prices and development charges appears to be a challenging feat" for the company, CIMB-GK analyst Sai Min Chow said in a client note. "Going forward, a lack of new landbank could subsequently hinder earnings sustainability beyond 2008," Sai added. Ho Bee recently lost out on on a number of bids, including a condominium site on Sentosa and a hotel site at Clemeceau Avenue. "We believe that in such an environment, it pays to be more cautious on Ho Bee, especially at current share price levels," Sai said. |
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Nostradamus
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14-Sep-2006 15:02
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It is higher on hopes that the company will be able to sell the apartments in the condominium it developing on Sentosa Island here for more than at first thought, in view of the state of the market for property on the island, dealers said. The Business Times reported that Lippo Group had submitted a bid for a 99-year leasehold site for a residential condominium site on Sentosa that works out at $817.66 per square foot of potential gross floor area, setting a new benchmark for residential sites on the island. In January, Ho Bee had bid $638.62 per square foot of potential gross floor area for another site on the island. "The result of the tender is positive for Ho Bee," DBS Vickers Securities said. "We have previously imputed a selling price of $1,400 per square foot in our assumptions and higher selling prices would translate to upward re-rating of the stock." DBS Vickers has a target price of $1.11. |
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Nostradamus
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27-Aug-2006 22:37
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Bungalow plots in Sentosa Cove's southern precinct were auctioned at record highs. Buyers paid between $5.56m and $8.15m. A local buyer paid the highest price - a record $1039 psf. In the next 3 years, most of Ho Bee's income will come from Sentosa Cove. Its shares will benefit every time prices in sentosa Cove reach a new high. Ho Bee has several Sentosa Cove projects, including condominium units in the Baywater Collection site and bungalows on Paradise Island. |
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Nostradamus
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14-Aug-2006 10:27
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UOBKH has a target price of $1.06 based on parity to its RNAV estimate. Ho Bee is benefitting from the IR to be built in Sentosa. It is reaping rich rewards as the pioneer developer in Sentosa Cove. Sales of its Sentosa projects have been excellent- all the Berthside terrace houses have been sold, and The Berth by the Cove condominium and Coral Island bungalows are almost fully sold. As a sizeable portion of development profits has not been recognised, these projects will underpin Ho Bee's robust earnings growth going forward. Two new projects, The Baywater Collection and Paradise Island, are expected to contribute another 22 cents to UOBKH's RNAV/share and strengthen Ho Bee's foothold in this niche. Apart from Sentosa Cove, Ho Bee's other projects are mainly high-end residences. Its Montview condominium in prime district 10 is about 96% sold since its launch a year ago. With three new launches (2 in district 10), it is well positioned to take advantage of the strong prices in prime locations, supported by greater participation by foreigners. It has a track record of reading the market right and timing its land acquisitions and projects well. This, together with the policy of rolling out projects quickly, enables it to achieve high operational efficiency. The strong cash flow, due to its asset-light policy, also results in a strong balance sheet which provides a lot of leeway to leverage for expansion. Furthermore, this strategy limits its exposure should the property cycle turn, thereby containing its risk. |
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