Bukit Sembawang Estates

Bukit Sembawang Estates > Buy

Maybank Kim Eng, May 25

March 25 close: S$6.13

Target price: S$8.55

FY18 net profit of S$55 million was 66 per cent ahead of our estimate due to a higher-than-expected profit margin. While the dividend per share cut was slightly negative – management opted to conserve cash – we believe Bukit Sembawang can quickly pay down financing for its newly acquired sites with the cash savings.

In late March 2018, Bukit Sembawang acquired Makeway View, a prime freehold property near Newton Circus, which could add 154 units to its high-rise inventory.

Bukit Sembawang has a good mix of projects to ride the recovering housing market. Revenue recognition from these projects will drive a clear rebound in earnings over the next few years. Reiterate BUY.

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