SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<div>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</div>
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<h2>Oxley Holdings</h2>
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<h3>With the red-hot residential market, here's a property developer to watch</h3>
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Oxley Holdings (SGX:5UX) specialises in the development of residential, commercial, industrial, and hospitality projects. We believe that its deleveraging efforts could drive a re-rating in its share price moving forward.
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<li>Since its incorporation in 2010, property developer Oxley Holdings (SGX:5UX) has a launched portfolio of 48 projects spanning across Singapore as well as international markets including the United Kingdom.</li>
<li>With a substantial amount of unbilled sales, Oxley is expected to generate a steady income stream over the next three years.</li>
<li>The strong generation of cash flow generation has supported Oxley’s deleveraging efforts. We believe that the continuous reduction in its net gearing ratio could drive a re-rating in its share price.</li>
<li>We expect the streamlining of Oxley’s portfolio to focus on its core competency – property development – to deliver greater value to shareholders and further support its deleveraging.</li>
<li>We value Oxley at a target price of SGD 0.28, derived from a 50% discount to our estimated revalued net asset value (RNAV). This represents a potential upside of 17% based on the closing price of SGD 0.24 on 18 August 2021.</li>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.





Oxley Holdings



With the red-hot residential market, here's a property developer to watch



Oxley Holdings (SGX:5UX) specialises in the development of residential, commercial, industrial, and hospitality projects. We believe that its deleveraging efforts could drive a re-rating in its share price moving forward.





Since its incorporation in 2010, property developer Oxley Holdings (SGX:5UX) has a launched portfolio of 48 projects spanning across Singapore as well as international markets including the United Kingdom.
With a substantial amount of unbilled sales, Oxley is expected to generate a steady income stream over the next three years.
The strong generation of cash flow generation has supported Oxley’s deleveraging efforts. We believe that the continuous reduction in its net gearing ratio could drive a re-rating in its share price.
We expect the streamlining of Oxley’s portfolio to focus on its core competency – property development – to deliver greater value to shareholders and further support its deleveraging.
We value Oxley at a target price of SGD 0.28, derived from a 50% discount to our estimated revalued net asset value (RNAV). This represents a potential upside of 17% based on the closing price of SGD 0.24 on 18 August 2021.















(Non-SGX Report) Oxley Holdings: With the Red-Hot Residential Market, Here's a Property Developer to Watch

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 <img src='https://api2.sgx.com/sites/default/files/2021-03/Capture_6.PNG' alt='MPM-CEO' />
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 <div class='content-caption'>MPM-CEO</div>
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It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.” Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: <a href="http://www.marcopolomarine.com.sg">www.marcopolomarine.com.sg</a> 
Click <a href="https://www.sgx.com/securities/equities/5LY">here </a>for the company's StockFacts page. 
For the year ended 30 September 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QQYC4T8CH6OZ2TJB/640673_MPML-%20FY2020%20Results%20Announcement.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    MPM-CEO


It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.”   Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: www.marcopolomarine.com.sg  
Click here for the company's StockFacts page.  
For the year ended 30 September 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Marco Polo Marine Turns Tide, Steers into New Chapter

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.COMPANY RESULTS
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<h2>Oxley Holdings (OHL SP) 2QFY20: Thriving In Adversity</h2>
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Oxley continues to thrive with 69% sales for Singapore inventory (target of 100% by end-20). Invariably, the Coronavirus outbreak has impacted its Gaobeidian sales and hospitality portfolio. The group continues to stay nimble, with its deleveraging on track and net gearing declining to 1.94x (-31ppt qoq). The negative global outlook has also pressured interest rates downwards, lowering the group’s borrowing costs. Maintain BUY with a lower S$0.49 target price (previously S$0.50), pegged at a 30% discount to our RNAV.
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• Results below expectations. Oxley reported a 2QFY20 PATMI of S$3.6m (-90% yoy), bringing 1HFY20 PATMI to S$15.7m (-54% yoy). 1HFY20 revenue grew 13% yoy to S$594m, due to the increase in revenue from development projects in Singapore and Dublin, 3-month contribution from the Australia subsidiary, partially offset by lower contribution from the UK project. Still, 1HFY20 gross profit declined (-6% yoy) due to lower gross margins (- 3ppt yoy), dragged by lower-margin residential projects in Dublin, the new subsidiary in Australia and certain Singapore development projects.
• 1HFY20 share of results for associates and JVs was a S$12.3m gain (vs S$3.9m loss same period last year), mainly attributable to an associate in the UK. Finance costs crept up (+14% yoy), primarily due to the increase in borrowings to finance the group’s development and investment projects and advances to JVs, partially offset by the absence of interest cost incurred on the bank borrowings for an investment property deconsolidated in 4QFY19.. We expect better recognition in 2HFY20.
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.COMPANY RESULTS


Oxley Holdings (OHL SP) 2QFY20: Thriving In Adversity


Oxley continues to thrive with 69% sales for Singapore inventory (target of 100% by end-20). Invariably, the Coronavirus outbreak has impacted its Gaobeidian sales and hospitality portfolio. The group continues to stay nimble, with its deleveraging on track and net gearing declining to 1.94x (-31ppt qoq). The negative global outlook has also pressured interest rates downwards, lowering the group’s borrowing costs. Maintain BUY with a lower S$0.49 target price (previously S$0.50), pegged at a 30% discount to our RNAV.





• Results below expectations. Oxley reported a 2QFY20 PATMI of S$3.6m (-90% yoy), bringing 1HFY20 PATMI to S$15.7m (-54% yoy). 1HFY20 revenue grew 13% yoy to S$594m, due to the increase in revenue from development projects in Singapore and Dublin, 3-month contribution from the Australia subsidiary, partially offset by lower contribution from the UK project. Still, 1HFY20 gross profit declined (-6% yoy) due to lower gross margins (- 3ppt yoy), dragged by lower-margin residential projects in Dublin, the new subsidiary in Australia and certain Singapore development projects.
• 1HFY20 share of results for associates and JVs was a S$12.3m gain (vs S$3.9m loss same period last year), mainly attributable to an associate in the UK. Finance costs crept up (+14% yoy), primarily due to the increase in borrowings to finance the group’s development and investment projects and advances to JVs, partially offset by the absence of interest cost incurred on the bank borrowings for an investment property deconsolidated in 4QFY19.. We expect better recognition in 2HFY20.






Non-SGX Report: Oxley Holdings (OHL SP): 2QFY20: Thriving In Adversity

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The 10 best-performing real estate developer stocks (excluding REITs) with market cap of S$200 million and above on SGX have averaged a total return of 21.7% in the YTD, bringing their 3Y and 5Y total returns to 23.3% and 16.7% respectively. 
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	<li>
Among these 10, the three best performers in the YTD were: CityDev (+35.7%), UOL (+28.8%) and United Overseas Australia (+25.9%), averaging a total return of 30.1% over the period. 
	 </li>
	<li>Singapore’s private residential property prices climbed further in 3Q 2019, after hitting their highest levels in at least five years in the previous quarter, URA data showed. Medium-term demand for private homes is expected to pick up, driven by government measures to boost affordability in the public housing market, a recent DBS Research report noted.</li>
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SGX lists over 70 real estate developers and operators (excluding REITs). Among these, more than 30 have a market capitalisation of S$200 million and above.

In the 2019 year-to-date, the 10 best-performing developer stocks with a market cap of S$200 million and above have averaged a total return of 21.7%, bringing their three-year and five-year total returns to 23.3% and 16.7% respectively.

Among the 10, the three best performers in the YTD were: City Developments (+35.7%), UOL Group (+28.8%) and United Overseas Australia (+25.9%). They have averaged a YTD total return of 30.1%.

The table below details the 10 best-performing real estate developer stocks with market cap of S$200 million and above on SGX, sorted by YTD total returns.

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<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Market Cap (S$M)
			</td>
			<td>
			Total Return YTD (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			Total Return 5Y (%)
			</td>
		</tr>
<tr>
<td>
			CITY DEVELOPMENTS
			</td>
			<td>
			C09
			</td>
			<td>
			9,522
			</td>
			<td>
			35.7
			</td>
			<td>
			33.2
			</td>
			<td>
			18.2
			</td>
		</tr>
<tr>
<td>
			UOL GROUP
			</td>
			<td>
			U14
			</td>
			<td>
			6,511
			</td>
			<td>
			28.8
			</td>
			<td>
			45.7
			</td>
			<td>
			32.7
			</td>
		</tr>
<tr>
<td>
			UNITED OVERSEAS AUSTRALIA
			</td>
			<td>
			EH5
			</td>
			<td>
			1,132
			</td>
			<td>
			25.9
			</td>
			<td>
			48.5
			</td>
			<td>
			63.5
			</td>
		</tr>
<tr>
<td>
			OXLEY HLDGS
			</td>
			<td>
			5UX
			</td>
			<td>
			1,455
			</td>
			<td>
			24.4
			</td>
			<td>
			15.6
			</td>
			<td>
			3.4
			</td>
		</tr>
<tr>
<td>
			CAPITALAND LTD
			</td>
			<td>
			C31
			</td>
			<td>
			18,236
			</td>
			<td>
			21.7
			</td>
			<td>
			33.8
			</td>
			<td>
			29.5
			</td>
		</tr>
<tr>
<td>
			HONG FOK CORP
			</td>
			<td>
			H30
			</td>
			<td>
			696
			</td>
			<td>
			21.0
			</td>
			<td>
			36.0
			</td>
			<td>
			9.3
			</td>
		</tr>
<tr>
<td>
			GUOCOLAND LTD
			</td>
			<td>
			F17
			</td>
			<td>
			2,402
			</td>
			<td>
			17.3
			</td>
			<td>
			22.0
			</td>
			<td>
			34.0
			</td>
		</tr>
<tr>
<td>
			AVJENNINGS LTD
			</td>
			<td>
			A05
			</td>
			<td>
			218
			</td>
			<td>
			17.1
			</td>
			<td>
			-2.6
			</td>
			<td>
			19.0
			</td>
		</tr>
<tr>
<td>
			SINGHAIYI GROUP
			</td>
			<td>
			5H0
			</td>
			<td>
			401
			</td>
			<td>
			13.5
			</td>
			<td>
			7.9
			</td>
			<td>
			-27.7
			</td>
		</tr>
<tr>
<td>
			OUE LTD
			</td>
			<td>
			LJ3
			</td>
			<td>
			1,335
			</td>
			<td>
			12.2
			</td>
			<td>
			-6.9
			</td>
			<td>
			-14.8
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			21.7
			</td>
			<td>
			23.3
			</td>
			<td>
			16.7
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 22 Nov 2019)

 

Residential Market Outlook

Private residential property prices in Singapore continued to climb in the third quarter of 2019, after hitting their highest levels in at least five years in the previous quarter, <a href="https://www.ura.gov.sg/Corporate/Media-Room/Media-Releases/pr19-47">data</a> released last month by the Urban Redevelopment Authority (URA) showed. The private residential property index increased 1.3% to 152.8 points in the September quarter, after gaining 1.5% to 150.8 points in the June quarter.

DBS Research expects demand for private homes in Singapore to pick up in the medium term, driven by government measures to boost affordability in the public housing market, it said in a <a href="https://www.dbs.com.sg/treasures/aics/pdfController.page?pdfpath=/content/article/pdf/AIO/092019/190911_insights_singapore_property.pdf">report</a> published in September.

The Housing Development Board (HDB) and Ministry of National Development (MND) announced several new policies, including the Enhanced CPF House Grant, as well as higher household income ceilings for purchase of new HDB built-to-order, HDB resale and Executive Condominium homes. These measures took effect in September.

“We expect the higher grants to create more buying interest in the public housing market, especially the HDB resale market space. In the medium term, as HDB resale prices stabilise or even increase, we expect confidence to return to the private residential market, as upgrader households cash out of existing homes to fund their next property purchase,” the report added.

Earlier this month, a <a href="https://www.pwc.com/sg/en/publications/aprealestemerging.html">report</a> jointly published by the Urban Land Institute and PricewaterhouseCoopers ranked Singapore No. 1 for real estate investment prospects in 2020, vs second-to-last in the list of 22 centres back in 2017.

Singapore was also one of the few markets regionally to see a surge in transaction values in the first half of 2019, with most of the activity driven by cross-border capital. Deals totalled US$4.9 billion over the period, up 73% YoY, the report noted.
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The 10 best-performing real estate developer stocks (excluding REITs) with market cap of S$200 million and above on SGX have averaged a total return of 21.7% in the YTD, bringing their 3Y and 5Y total returns to 23.3% and 16.7% respectively. 
	 
	
Among these 10, the three best performers in the YTD were: CityDev (+35.7%), UOL (+28.8%) and United Overseas Australia (+25.9%), averaging a total return of 30.1% over the period. 
	 
	Singapore’s private residential property prices climbed further in 3Q 2019, after hitting their highest levels in at least five years in the previous quarter, URA data showed. Medium-term demand for private homes is expected to pick up, driven by government measures to boost affordability in the public housing market, a recent DBS Research report noted.

 

SGX lists over 70 real estate developers and operators (excluding REITs). Among these, more than 30 have a market capitalisation of S$200 million and above.

In the 2019 year-to-date, the 10 best-performing developer stocks with a market cap of S$200 million and above have averaged a total return of 21.7%, bringing their three-year and five-year total returns to 23.3% and 16.7% respectively.

Among the 10, the three best performers in the YTD were: City Developments (+35.7%), UOL Group (+28.8%) and United Overseas Australia (+25.9%). They have averaged a YTD total return of 30.1%.

The table below details the 10 best-performing real estate developer stocks with market cap of S$200 million and above on SGX, sorted by YTD total returns.




			Name
			
			
			SGX Code
			
			
			Market Cap (S$M)
			
			
			Total Return YTD (%)
			
			
			Total Return 3Y (%)
			
			
			Total Return 5Y (%)
			
		


			CITY DEVELOPMENTS
			
			
			C09
			
			
			9,522
			
			
			35.7
			
			
			33.2
			
			
			18.2
			
		


			UOL GROUP
			
			
			U14
			
			
			6,511
			
			
			28.8
			
			
			45.7
			
			
			32.7
			
		


			UNITED OVERSEAS AUSTRALIA
			
			
			EH5
			
			
			1,132
			
			
			25.9
			
			
			48.5
			
			
			63.5
			
		


			OXLEY HLDGS
			
			
			5UX
			
			
			1,455
			
			
			24.4
			
			
			15.6
			
			
			3.4
			
		


			CAPITALAND LTD
			
			
			C31
			
			
			18,236
			
			
			21.7
			
			
			33.8
			
			
			29.5
			
		


			HONG FOK CORP
			
			
			H30
			
			
			696
			
			
			21.0
			
			
			36.0
			
			
			9.3
			
		


			GUOCOLAND LTD
			
			
			F17
			
			
			2,402
			
			
			17.3
			
			
			22.0
			
			
			34.0
			
		


			AVJENNINGS LTD
			
			
			A05
			
			
			218
			
			
			17.1
			
			
			-2.6
			
			
			19.0
			
		


			SINGHAIYI GROUP
			
			
			5H0
			
			
			401
			
			
			13.5
			
			
			7.9
			
			
			-27.7
			
		


			OUE LTD
			
			
			LJ3
			
			
			1,335
			
			
			12.2
			
			
			-6.9
			
			
			-14.8
			
		


			Average
			
			
			 
			
			
			 
			
			
			21.7
			
			
			23.3
			
			
			16.7
			
		

Source: Bloomberg &amp; StockFacts (data as of 22 Nov 2019)

 

Residential Market Outlook

Private residential property prices in Singapore continued to climb in the third quarter of 2019, after hitting their highest levels in at least five years in the previous quarter, data released last month by the Urban Redevelopment Authority (URA) showed. The private residential property index increased 1.3% to 152.8 points in the September quarter, after gaining 1.5% to 150.8 points in the June quarter.

DBS Research expects demand for private homes in Singapore to pick up in the medium term, driven by government measures to boost affordability in the public housing market, it said in a report published in September.

The Housing Development Board (HDB) and Ministry of National Development (MND) announced several new policies, including the Enhanced CPF House Grant, as well as higher household income ceilings for purchase of new HDB built-to-order, HDB resale and Executive Condominium homes. These measures took effect in September.

“We expect the higher grants to create more buying interest in the public housing market, especially the HDB resale market space. In the medium term, as HDB resale prices stabilise or even increase, we expect confidence to return to the private residential market, as upgrader households cash out of existing homes to fund their next property purchase,” the report added.

Earlier this month, a report jointly published by the Urban Land Institute and PricewaterhouseCoopers ranked Singapore No. 1 for real estate investment prospects in 2020, vs second-to-last in the list of 22 centres back in 2017.

Singapore was also one of the few markets regionally to see a surge in transaction values in the first half of 2019, with most of the activity driven by cross-border capital. Deals totalled US$4.9 billion over the period, up 73% YoY, the report noted.



Trio of Best-Performing Real Estate Developers Returned 30% in YTD      

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.<h2>Oxley Holdings (OHL SP)</h2>
1QFY20: On Track For A Better FY20
Oxley continues to deliver, achieving 66% sales for Singapore inventory (target of 70% by end-19). Gearing levels (2.25x) continues to be in check, with high cash flow visibility of S$3.3b unbilled sales (vs S$3.2b net debt). More cash flow from Singapore and overseas projects are expected next year, with construction ramping up for Singapore projects, and more handovers from Royal Wharf, Dublin Landings, The Peak. Maintain BUY and target price of S$0.50, pegged at a 30% discount to our RNAV/share.
RESULTS&nbsp;
<ul>
<li>Results below expectations. Oxley reported 1QFY20 net profit of S$12.2m (1QFY19: S$30m loss). Revenue increased 66% yoy, mainly due to increase in contributions from development projects in Singapore and the UK. Gross margin was lower (-12ppt yoy), mainly due to lower margins from the UK project, partially offset by higher margins from its hotels at Stevens Road and Singapore development properties.</li>
<li>1QFY20 share of results for associates and JVs was a S$4.9m loss (1QFY19: S$3.7m loss), mainly attributed to associates in Australia and the UK. Finance costs crept up 21% yoy, primarily due to increase in borrowings to finance the group’s Singapore development projects, advances to JVs and additions to an investment property funded by equity, partially offset by absence of interest cost incurred on the bank borrowings for an investment property deconsolidated in 4Q19. Borrowing costs for 1QFY20 and 1QFY19 (restated) comprise interest expense for development projects where revenue is recognised over time.</li>
</ul>
STOCK IMPACT
<ul>
<li>Singapore residential projected to sell out by end-20. To date, the group has sold over 2,580 units (c.66%) of its 3,923 units of Singapore inventory (inclusive of commercial units). Four of the projects (incl. The Verandah Residences, Sixteen35 Residences, Sea Pavilion Residences and The Addition) are almost completely sold. Others, such as Riverfront Residences (80%), Affinity @ Serangoon (59%), Kent Ridge Hill Residences (48%) and Mayfair Gardens/Modern (54%) have also crossed cumulative sales marker of 30-40% (the level where most projects become self-financing). Barring any unforeseen circumstances, management expects sales to reach 70% of the total by end-19, and sell out the remaining within the next 12 months</li>
</ul>

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.Oxley Holdings (OHL SP)
1QFY20: On Track For A Better FY20
Oxley continues to deliver, achieving 66% sales for Singapore inventory (target of 70% by end-19). Gearing levels (2.25x) continues to be in check, with high cash flow visibility of S$3.3b unbilled sales (vs S$3.2b net debt). More cash flow from Singapore and overseas projects are expected next year, with construction ramping up for Singapore projects, and more handovers from Royal Wharf, Dublin Landings, The Peak. Maintain BUY and target price of S$0.50, pegged at a 30% discount to our RNAV/share.
RESULTS&nbsp;

Results below expectations. Oxley reported 1QFY20 net profit of S$12.2m (1QFY19: S$30m loss). Revenue increased 66% yoy, mainly due to increase in contributions from development projects in Singapore and the UK. Gross margin was lower (-12ppt yoy), mainly due to lower margins from the UK project, partially offset by higher margins from its hotels at Stevens Road and Singapore development properties.
1QFY20 share of results for associates and JVs was a S$4.9m loss (1QFY19: S$3.7m loss), mainly attributed to associates in Australia and the UK. Finance costs crept up 21% yoy, primarily due to increase in borrowings to finance the group’s Singapore development projects, advances to JVs and additions to an investment property funded by equity, partially offset by absence of interest cost incurred on the bank borrowings for an investment property deconsolidated in 4Q19. Borrowing costs for 1QFY20 and 1QFY19 (restated) comprise interest expense for development projects where revenue is recognised over time.

STOCK IMPACT

Singapore residential projected to sell out by end-20. To date, the group has sold over 2,580 units (c.66%) of its 3,923 units of Singapore inventory (inclusive of commercial units). Four of the projects (incl. The Verandah Residences, Sixteen35 Residences, Sea Pavilion Residences and The Addition) are almost completely sold. Others, such as Riverfront Residences (80%), Affinity @ Serangoon (59%), Kent Ridge Hill Residences (48%) and Mayfair Gardens/Modern (54%) have also crossed cumulative sales marker of 30-40% (the level where most projects become self-financing). Barring any unforeseen circumstances, management expects sales to reach 70% of the total by end-19, and sell out the remaining within the next 12 months


Non-SGX Report: Oxley Holdings (OHL SP): 1QFY20: On Track For A Better FY20

Singapore

Oxley Holdings Ltd. develops real estate. The Company develops residential and commercial projects in accessible locations. Oxley also develops light industrial buildings that include swimming pools and other recreational amenities.

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Oxley Holdings (OHL SP)

(Non-SGX Report) Oxley Holdings: With the Red-Hot Residential Market, Here's a Property Developer to Watch

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Singapore Exchange Ltd (SGX)

Trio of Best-Performing Real Estate Developers Returned 30% in YTD

The 10 best-performing real estate developer stocks (excluding REITs) with market cap of S$200 million and above on SGX have averaged a total...

Singapore Exchange Ltd (SGX)

Non-SGX Report: Oxley Holdings (OHL SP): 1QFY20: On Track For A Better FY20

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

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