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Sunday 27 August 2017

Guocoland FY2017 Results

I've initiated a smallish position with Guocoland earlier this year in April at 1.85
At that point, Guocoland is trading at about 40% off their NAV, which I felt that Guocoland is trading a very big discount and given a very attractive valuation. Recently, they have a run up to 2.28, which is about a 20% increase and currently at their 52week high. With the opening of TPC, it will be a big recurring income for them as well as giving them a higher RNAV.
Guocoland has released their Full Year results recently and has declared a 7 cents dividend for FY2017. This is an increase from their usual dividends of 5 cents. The group's revenue has increased 5% to $1.1 billion driven by higher residential sales and progressive revenue from residential projects in Singapore.

Dividends will be paid on 21 November 2017 and XD on 31 October 2017.


 Residential Sales
- Goodwood Residence has been completely sold.
- As at end June 2017, the 381-unit freehold Leedon Residence in prime District 10 is approximately 90% sold
- 1,024-unit Sims Urban Oasis is approximately 80% sold.
- In Shanghai, Phase 3 of the 664-unit Changfeng Residence has sold and received bookings for over 600 units as at end June 2017

Land aquisition
Guocoland has acquired land in 3 different locations, District 9 in Singapore (Martin Modern), Yuzhong District in Chongqing and Cheras in Malaysia.

 Martin Modern, a luxury residential development has been lauched and in Phase 1, 110 out of 120 units released have been sold.
Wallich Residence to be completed by end 2017.

 TPC & Damansara City
Both integrated mixed-used developments, TPC & Damansara City has commenced operations.
Office & Retail spaces are more than 90% committed in TPC, while at Damansara, Office spaces are 100% occupied with retail spaces 80% committed.
Fair value gain from investment properties increased $234.8 million as compared to the previous financial year mainly due to higher fair value gain from Tanjong Pagar Centre’s Guoco Tower.

NAV

NAV at end FY2017 is at S$3.18. At their current price of S$2.28, Guocoland is still trading at a 30% discount to NAV. RNAV at S$3.63/share which also suggest that they are trading at a deep 37% discount to its RNAV.

I believe that with their upcoming projects, there will be more recurring income for Guocoland. With the dividends of 7 cents, it provides me a yield of 3.78% from my entry price.


Guocoland full year results can be found here.
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8 comments:

  1. B27 August 2017 at 14:49

    Hi Sleepydevil

    Big congrats on the gain.

    It's a very good entry price there at $1.85 :) and the future is bright too.

    ReplyDelete
    Replies
    1. sleepydevil27 August 2017 at 18:50

      Hi Brian,

      Thanks for dropping by :)
      Congratulation on locking your gains for Guocoland too !!

      Delete
  2. vany27 August 2017 at 23:19

    Hi Sleepydevil,

    Althought the future looks bright for Guoco, Do you think the price is considered too expensive now to enter considered that the price has ran up significantly in the last few weeks?

    thanks!

    thanks!

    ReplyDelete
    Replies
    1. sleepydevil27 August 2017 at 23:57

      Hi Vany,

      Thanks for dropping by :)

      In a valuation way, I feel that Guocoland is still cheap given that they are currently trading at 30% discount to NAV and 37% to their RNAV. I believe that there is still room for Guocoland to trend upwards. This is just my thoughts :)

      However, do remember that news tends to affect an investor pretty much. Given the recent good news, it might be a strong "buy", but this will also mean that there is a good number of people selling it too.

      Due diligence should be done before buying in :)

      Delete
  3. KPO29 August 2017 at 21:57

    Hi Sleepydevil,

    Nice summary! We have around the same entry price ;)

    ReplyDelete
    Replies
    1. sleepydevil29 August 2017 at 22:50

      Hi KPO!!

      Thanks for dropping by!! :)
      Congratulation on the gains for Guocoland!!

      Delete
  4. Betta man4 December 2017 at 09:04

    Do you think the 7 cents annual dividend is sustainable ?

    ReplyDelete
    Replies
    1. sleepydevil4 December 2017 at 20:34

      Hi Betta Man,

      Thanks for dropping by. Guocoland have been giving out 5 cents dividend for the past 5 year (since 2012). Prior to that, there's some years that they're giving out 8 cents.

      Hence, taking 5 cents into consideration of my purchase price, it translates to a 2.7% dividend, which I believe that they'll be able to sustain well.

      The opening of TPC, and Guoco holding onto it provides them with more recurring income. With more recurring income into play, I believe that the dividends are sustainable. Should they sell TPC to realize their gains, that would be another story :)

      Delete