Monday, August 5, 2013

Yoma Strategic Holdings: Key catalyst ahead - the Landmark Project (OCBC)

Yoma Strategic Holdings:
Fair value S$0.87
add: 12m dividend forecast S$0.01
versus: Current price S$0.87

Key catalyst ahead - the Landmark Project
• Higher staff costs and slow construction
• Selling LDRs in Star City Zone B
• Awaiting Landmark acquisition

Yoma reported 1QFY14 PATMI of S$0.4m, which decreased 80.6% YoY mostly due to higher staff costs as the group continues to build up a strong management team in anticipation of future activity. We judge 1QFY14 PATMI to be below view – forming only 3.7% of our full year forecast – due to a slower than anticipated pace of recognition at Star City and higher staff costs.
The group announced that it has entered into an agreement with a third party investor for the sale of LDRs for five buildings (1043 units) in Zone B of Star City and would receive incentive fees if certain sales targets to end buyers are met. We continue to await the completion of the Landmark Project acquisition, which would likely be a key catalyst for the share price ahead. Maintain HOLD with an unchanged fair value estimate of S$0.87 (20% premium to RNAV).

1QFY14 PATMI down 81% YoY due to higher staff costs and slow construction
Yoma reported 1QFY14 PATMI of S$0.4m, which decreased 80.6% YoY mostly due to higher staff costs as the group continues to build up its management team in anticipation of future activity. We judge 1QFY14 PATMI to be below view – forming only 3.7% of our full year forecast – due to a slower than anticipated pace of recognition at Star City and higher staff costs. We therefore tweak our estimates down by 29% to S$7.8m and expect recognition at development projects to be mostly backloaded in the fiscal year. 1QFY14 topline came in at S$15.2m, up 11.6% YoY due to increased contributions from recognition of residential sales.

Agreement with third party to develop and sell Zone B of Star City
We highlight that the pace of sales in Zone A of Star City has slowed to only 22 units over the quarter as Building 3 (260 out of 264 units sold) and Building 4 (260 out of 264 units sold) are by now almost completely sold. We understand that Building 5 is expected to be retained for rental purposes. For Zone B of Star City, Yoma has entered into an agreement with a third party investor for the sale of LDRs for five buildings (1043 units) and would receive incentive fees if certain sales targets to end buyers are met. Over 1QFY14, Yoma has already sold the LDR for the equivalent of one building for S$5.93m. We expect the LDRs for two more Zone B buildings to be sold over the next two quarters.

Awaiting the Landmark Project acquisition
We continue to await more color regarding the development of the Landmark Project in Yangon and believe that the completion of the acquisition, on which the subsequent rights issue is conditional, would likely be a key catalyst for the share price ahead. We understand that this project is currently a key item of focus for management. Maintain HOLD with an unchanged fair value estimate of S$0.87 (20% premium to RNAV).


Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 01/08/13

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