Excerpts from latest analyst reports….

DBS Vickers highlights Roxy-Pacific’s crown jewel, the Spottiswoode project

Dragon Mansion will be redeveloped by Roxy-Pacific. The launch of sale of the project is expected to be in 1Q next year. NextInsight photo
Roxy-Pacific is a beneficiary of the pick-up in high-end sales. The group has acquired the Dragon Mansion site at Spottiswoode Park Road last year for S$100.8m or land cost of S$850 psf.

The freehold site is in the Tanjong Pagar area and within walking distance to the Outram MRT station and other amenities.

It has a total land area of 3890.2 sqm and a maximum plot ratio of 2.8 for apartment development. This site is also in proximity to the Tanjong Pagar Malaysian Railway Station area that could be eventually redeveloped, and is just a stone throw away from the recently launched Spottiswoode Residences, which is selling at ASP of about S$1800-S$2000 psf.

Target price for Roxy-Pacific raised to S$0.55. Assuming ASP of S$2000 psf, we reckon Roxy-Pacific could book in an estimated S$85m pre-tax profit when fully sold, to be recognised over three years. This project is expected to be launched in 1Q11.

After incorporating a high ASP for the Spottiswoode project, adding two more upcoming launches and tweaking ASPs for recently launched projects, our RNAV is revised up 16Scts to S$0.79. Applying a 30% discount to RNAV (in line with the residential developers in our DBSV coverage of 10% to 40% discount), our target price for Roxy is S$0.55 (Prev S$0.44), which provides a potential upside of 47%.

Recent story: ROXY-PACIFIC: Record 3Q profit, robust insider buying

Kevin Scully notes INNOTEK has a dividend yield of 9.3%

(Visit www.nracapital.com)

Kevin Scully, executive chairman of NRA Capital. NextInsight photo
Innotek is in both my Stock Picks as well as my Yield portfolio.   It recently reported its Q3-2010 results which saw revenue rise by 22.6% to S$112.8mn while net attributable profit rose 374% to S$4.52mn.  Key highlights of the results are:

a) revenue for Q3-2010 rose 22.6% to S$112.8mn while nine month revenue was up 17.9% to S$316.9mn.

b) net attributable profit for Q3-2010 rose 374% to S$4.5mn while nine month net attributable profit rose 199.1% to S$13.7mn

c) EPS for the nine months was 6.0 cents while its NAV was 84.8 cents

d) the number of Treasury shares increased to 18.4mn from 11.2mn in 2009

e) Gross cash was 99.1mn while net cash was S$60.8mn or S$0.27 per share.

In its commentary, the company attributed the good performance to strong demand for its automotive, office automation and consumer electronics (mainly TV components).  For Q4-2010, the company is guiding for a stable outlook for its automotive and office automation but weaker TV demand.  Q4-2010 net profit is also forecasted to be lower than Q2 and Q3 which was S$5.7mn and 4.5mn.  A figure of between S$3-4mn is likely which would give full year net profit of about S$18mn.

Innotek remains in my growth and yield portfolio.  With an expected minimum dividend of 5 cents per share - we have a running dividend yield of 9.3%.  The prospective PER for 2010 at 6.6 times is reasonable with investors also enjoying protection from its NAV - the shares are now trading on a price to book of 0.62.   At S$0.53, investors also enjoy net cash backing per share of S$0.27.

Recent story: BROADWAY, INNOTEK: What analysts say now.....

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