03 May 2014

Roxy Pacific 2014Q1 Result News - Apr 2014











My View
Roxy Pacific followed other mid cap developers (e.g. Aspial, Hiap Hoe etc) to acquire properties in Australia, particularly in Sydney / Melbourne that enjoyed better occupancy rates & stable recurring income stream. It is not a surprise to me as the Singapore property market has been dampened demand by the government's cooling measurement.

 Nonetheless, Roxy-Pacific remains one of properties in my watch list as I think it is having a good visibility of earnings based on the S$1.0bn pre-sales figures and better performance in Hotel operation.

Some points:

  1. Gross profit margin reduced marginally to 32% due to changes of product mix. 
  2. Annualized EPS is 5.08 and annualized PE is about 11X (considered at higher level among peers)
  3. Annualized ROE is 17.8% compared to 28% FY13. I do expect a higher ROE in between 20%  - 30% as current quarter did not recognize fair value gain in investment properties (mainly in hotel properties).
  4. As the group ventures into Australia properties, a separate team maybe formed up to manage the properties there and it may incur higher operating costs & foreign currency risk.  





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