Wing Tai Holdings chairman and managing director Cheng Wai Keung continued to raise his deemed interest in the company through shares bought by his spouse, Helen Chow. Between May 9 and 15, Cheng&rsquo s deemed interest in the real estate developer and lifestyle retailer rose by 230,000 shares, from 61.69 to 61.72 per cent.

Wing Tai Holdings : W05 +1.69% chairman and managing director Cheng Wai Keung has raised his deemed interest in the company through shares bought by his spouse, Helen Chow. Between May 2 and May 8, Cheng&rsquo s deemed interest in the real estate developer and lifestyle retailer rose by 240,000 shares, from 61.65 per cent to 61.69 per cent.

 

Mapletree Logistics Trust

On May 8, Mapletree Logistics Trust Management non-executive chairman and director Lee Chong Kwee bought 100,000 units of Mapletree Logistics Trust at S$1.10 per unit. This increased his direct interest in the Reit to 400,000 units. The trust invests in a diversified portfolio of quality logistics real estate in Singapore, Australia, China, Hong Kong, India, Japan, Malaysia, South Korea and Vietnam. Its tenant base includes 934 customers, with about 85 per cent of its revenue coming from tenants serving domestic consumption and around 15 per cent from those engaged in export businesses.

Merging with the hotel and property group trumps buying it via a consortium other key issues need addressing

 

[SINGAPORE] Minority shareholders of hotel and property group Amara Holdings : A34 0% who did not accept an earlier offer by Amethyst Assets, which closed in early 2024, have reason to cheer.

 

Last week, Amara&rsquo s minority investors received a far superior voluntary conditional general offer at S$0.895 per share from DRC Investments, compared with the S$0.60 per share offer proposed in 2024. 

 

However, should minority shareholders of local-listed Wing Tai Holdings : W05 +1.71% be cheering its participation as part of the consortium trying to privatise Amara? I think not.

 

Albert Teo, Amara&rsquo s chairman and chief executive officer, and his daughter, chief operating officer Dawn Teo, hold the remaining 30 per cent of DRC.

 

DRC&rsquo s offer price represents a premium of 27 per cent over Amara&rsquo s closing price of S$0.705 on Apr 23 before the company called for a trading halt the following day and a premium of 42.1 per cent to the volume-weighted average price for the one-month prior to the trading halt.

 

The offer price also represents a 33 per cent premium to Amara&rsquo s end-2024 net asset value (NAV) per share of S$0.673.

 

However, DRC is likely not silly in paying a premium to NAV. Amara&rsquo s end-2024 NAV is based on holding its hotels, namely the 389-room Amara Singapore in Tanjong Pagar, 140-room Amara Sanctuary Resort Sentosa, 343-room Amara Shanghai and 250-room Amara Bangkok, under property, plant and equipment at historical cost. Depreciation is charged to the assets, as are costs needed to bring an asset to operate in the way intended by management.  

 

In its evaluation of Amethyst&rsquo s offer for Amara, Xandar Capital said Amara&rsquo s end-June 2023 revalued NAV (RNAV) per share was around S$1.25 or 87 per cent above Amara&rsquo s end-June 2023 NAV per share.

 

The key contributor to the difference between RNAV and NAV was mark-to-market valuations of the hotels. 

 

Xandar Capital was the independent financial adviser to the directors of Amara, considered independent with regards to Amethyst&rsquo s offer.

 

Amethyst is a consortium linked to Teo and family, and private equity investor Dymon Asia.

 

Wing Tai

 

Perhaps, Wing Tai&rsquo s board and top management sees the S$0.895 price per Amara share as attractive, given the latter&rsquo s updated RNAV may exceed its latest NAV.

 

Maybe, Wing Tai wants to grow its recurrent income by having ownership interests in Amara&rsquo s hotels as well as its investment properties. After all, property development profits are lumpy, its margins in Singapore are thin and home buying sentiment might be uncertain given a weaker economic outlook.

 

As at end-2024, Amara owned investment properties worth S$385.4 million, based on fair market values. Key assets include 100 AM in Tanjong Pagar and in Shanghai &ndash both of which have a mix of retail, office and car park spaces.

 

Might Wing Tai see potential to redevelop the Tanjong Pagar site, which houses Amara Singapore and 100 AM, into a new mixed-use development, possibly with higher gross floor area?

 

But it may not make sense for Wing Tai to buy into Amara at a large premium to NAV when Wing Tai itself is trading far below NAV.

 

Wing Tai&rsquo s investment in Amara is likely to get marked down by the market substantially, assuming Wing Tai continues to trade at a deep discount to NAV.

 

As at May 5, Wing Tai traded at a discount of nearly 70 per cent to its end-2024 NAV per share of S$3.91.

 

Sure, Wing Tai is not alone among Singapore-listed property groups for trading at a large discount to NAV.

 

For one, its trading liquidity is poor. Based on latest corporate filings, Cheng Wai Keung&rsquo s direct and deemed interest in Wing Tai amounts to about 61.7 per cent.

 

Critically, Wing Tai&rsquo s recent financial performance has been dismal. It made losses for the financial year ended Jun 30, 2024. The latest NAV per share of S$3.91 is down by 9.5 per cent versus that of S$4.32 as at Jun 30, 2022.

 

For the half year ended Dec 31, 2024, Wing Tai reported profit attributable to equity holders of S$10.1 million. Based on annualising the said profit and end-2024&rsquo s equity attributable to equity holders of nearly S$3 billion, return on equity would be around 0.7 per cent &ndash hardly tempting to investors.

 

Perhaps, what Wing Tai&rsquo s board and management should prioritise is improving the financial performance and ownership structure of its various assets, over participating as part of a consortium buying Amara.

 

For example, can the group become more asset light and recycle capital more efficiently? Is the group being dragged down by its investment in Hong Kong-listed Wing Tai Properties? Should the group exit its retail business in Singapore and Malaysia?

 

Property mergers

 

Regarding Amara, what might better serve Wing Tai&rsquo s minority shareholders is for it to merge with Amara through an exchange of shares.

 

A merger will help Wing Tai bring in new shareholders and raise its number of shares outstanding, which may in turn drive better trading liquidity.

 

While government-led efforts are ongoing to strengthen the competitiveness of Singapore&rsquo s equities market, undervalued property-linked listed groups are exiting the local bourse. 

 

To support equities market development, mid-size listed property and/or hotel groups should consider merging.

 

Potential mergers involving groups such as Bonvests Holdings : B28 0%, Far East Orchard : O10 0%, Metro Holdings : M01 0%, OUE : LJ3 +0.53% and Tuan Sing Holdings : T24 -3.92% to create greater scale and generate better trading liquidity can help drive potential share price re-rating.  

 

Ultimately, Wing Tai&rsquo s Amara foray will cheer Amara&rsquo s minority shareholders but do little to help its own minority shareholders. Wing Tai&rsquo s board needs to act urgently to improve the group&rsquo s financial performance and craft an investment story that is fit-for-purpose.

The company incurs higher sales and finance costs for the 6-month period ended Dec 31, 2024

 

PROPERTY and retail company Wing Tai Holdings&rsquo : W05 -0.82% net profit continued its decline in the first half of its 2025 fiscal year due to lower contributions from its property assets, after selling one of its condominium projects in Singapore.

 

The company also incurred higher sales and finance costs for the six-month period ended Dec 31, 2024.

 

In a bourse filing on Tuesday (Feb 11), the company said it posted a net profit of S$10.1 million for H1 2025. This marks a 51 per cent decline from the S$20.5 million in the corresponding period in the prior year.

 

This is the second consecutive year that its net profit dropped for the first half. Its net profit of S$20.5 million for the first half of FY2024 was a 68 per cent drop from the corresponding period the year before.

 

Despite the lower net profit, Wing Tai recorded higher revenue for the reporting period. Revenue came in at S$112.7 million, a 15 per cent increase from S$97.7 million in the year-ago period.

 

The increase was mainly due to the higher contribution from its development properties. In particular, progressive sales were recognised from its Singapore condominium development The LakeGarden Residences, as well as its Malaysia housing project Jesselton Hills.

 

However, the absence of contribution from The M in Singapore following its sale in the previous financial year led to a fall in operating profit of S$3.7 million, down 59 per cent from S$9.2 million in the previous year.

 

Cost of sales for the half-year jumped 43 per cent to S$62.5 million, from S$43.9 million. Meanwhile, finance costs increased 32 per cent to S$22.1 million, from S$16.7 million over the same period.

 

As at Dec 31, 2024, the group&rsquo s net asset value per share was S$3.91 &ndash compared to S$3.90 as at Jun 30, 2024.

 

In its filing, it noted that the Singapore economy is expected to slow down in 2025, with a projected gross domestic product growth rate ranging between 1 and 3 per cent.

 

&ldquo This is primarily due to escalating global trade conflicts that could disrupt global supply chains and dampen demand. Singapore&rsquo s economic outlook, however, remains positive as its strong fundamentals and proactive policy responses should enable it to navigate the challenges ahead,&rdquo the group added.

Wing Tai Holdings : W05 -0.79% chairman and managing director Cheng Wai Keung has increased his deemed interest in the company through shares acquired by his spouse, Helen Chow. On Dec 6, Cheng&rsquo s deemed interest in the leading real estate developer and lifestyle retailer rose by 100,000 shares, from 61.63 per cent to 61.64 per cent.

Wing Tai : W05 -1.59%chairman and managing director Cheng Wai Keung has continued to build his deemed interest in the company through his spouse Helen Chow. Between Dec 2 and Dec 5, Cheng increased his deemed interest in the leading real estate developer and lifestyle retailer by 400,000 shares, raising his total interest from 61.58 per cent to 61.63 per cent.

Wing Tai Holdings : W05 +0.79% chairman and managing director Cheng Wai Keung has continued to build his deemed interest in the company, with his spouse Helen Chow acquiring shares.

 

Between Nov 22 and 28, Cheng has increased his deemed interest in the leading real estate developer and lifestyle retailer by 230,000 shares.

 

He maintains a 61.58 per cent total interest in the company.

 

Bonvests Holdings

On Nov 25, Bonvests Holdings : B28 0% executive chairman Henry Ngo acquired 101,000 shares at an average price of S$0.90 per share. The acquisitions were made through Allsland, which is wholly owned by Ngo.

 

His total interest in Bonvests Holdings is 84.75 per cent. His preceding acquisitions were in September and June. Ngo has gradually increased his total interest in the group from 82.93 per cent in August 2018.

 

In August this year, Bonvests Holdings reported that its H1 FY2024 revenue increased 3.4 per cent to S$108.991 million from H1 FY2023, driven by higher revenue from the industrial division.

 

However, earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 8.5 per cent to S$21.68 million due to higher operating expenses from the hotel division. The group reported a loss before taxation of S$1.91 million, mainly due to higher finance costs, depreciation, and lower Ebitda.

 

The five revenue segments of the group span rental, hotel, industrial, investment and property development.

 

Bonvests Holdings expects its rental division to remain stable, while the hotel division faces challenging market conditions despite industry recovery, with ongoing construction in the Medina of Tunis, Tunisia, scheduled for completion by mid-2026.

 

The industrial division has improved financial results, but continues to face challenges from market competition and rising costs, while the investment division&rsquo s performance will be influenced by stock-market volatility the development division currently has no active projects.

Wing Tai Holdings : W05 +0.79% chairman and managing director Cheng Wai Keung has continued to build his deemed interest in the company, with his spouse Helen Chow acquiring shares.

 

Between Nov 22 and 28, Cheng has increased his deemed interest in the leading real estate developer and lifestyle retailer by 230,000 shares.

 

He maintains a 61.58 per cent total interest in the company.

 

Bonvests Holdings

On Nov 25, Bonvests Holdings : B28 0% executive chairman Henry Ngo acquired 101,000 shares at an average price of S$0.90 per share. The acquisitions were made through Allsland, which is wholly owned by Ngo.

 

His total interest in Bonvests Holdings is 84.75 per cent. His preceding acquisitions were in September and June. Ngo has gradually increased his total interest in the group from 82.93 per cent in August 2018.

 

In August this year, Bonvests Holdings reported that its H1 FY2024 revenue increased 3.4 per cent to S$108.991 million from H1 FY2023, driven by higher revenue from the industrial division.

 

However, earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 8.5 per cent to S$21.68 million due to higher operating expenses from the hotel division. The group reported a loss before taxation of S$1.91 million, mainly due to higher finance costs, depreciation, and lower Ebitda.

 

The five revenue segments of the group span rental, hotel, industrial, investment and property development.

 

Bonvests Holdings expects its rental division to remain stable, while the hotel division faces challenging market conditions despite industry recovery, with ongoing construction in the Medina of Tunis, Tunisia, scheduled for completion by mid-2026.

 

The industrial division has improved financial results, but continues to face challenges from market competition and rising costs, while the investment division&rsquo s performance will be influenced by stock-market volatility the development division currently has no active projects.

Wing Tai Holdings : W05 +0.75% chairman and managing director Cheng Wai Keung has continued to build his deemed interest in the company, through his spouse Helen Chow acquiring shares.

 

From Sep 10 to 12, Cheng increased his deemed interest in the leading real estate developer and lifestyle retailer by 95,000 shares.

 

He maintains a 61.52 per cent total interest in the company.