Excerpts from analysts' reports

UOB Kay Hian expects Wee Hur to report bumper profit in 2014.

Analyst: Loke Chunying

WH_peercf4.13Bumper profit expected in 2014. 
As the completed 
contract accounting method is adopted for industrial 
development properties, Wee Hur saw a 750% surge in net 
profit for 2012 with the TOP and recognition of revenue for 
Harvest@Woodlands. 

Accordingly, investors can expect 
another surge in profit in 2014 with the TOP of 
Premier@Kaki Bukit (more than 95% sold), where Wee Hur 
owns a 60% interest in the 74,943 sqm GFA industrial 
development.

• 
Consistent dividend payout. 
Wee Hur has been 
maintaining a dividend payout of at least 2 S cents since 
2008. In its bumper profit year 2012, Wee Hur rewarded 
shareholders with a total dividend of 4 S cents. We like 
Wee Hur for its consistent dividend payout history and its 
willingness to reward shareholders in windfall years. 
Assuming Wee Hur maintains its 2 S cents dividend payout 
for 2013, it translates to a current dividend yield of 4.3%.

The next big project– Thomson View, third time’s the 
charm? 
In 2012, the JV between Wee Hur (51%) and 
Lucrum Capital (49%) successfully acquired Thomson View 
Condominium, a 99-year leasehold residential site sitting 
on a land area of 540,314.4sf. After including the 
differential and lease upgrading premium payable, 
estimated cost of acquisition is S$712 psf ppr.

250_goh_aiceGoh Yew Lian, CEO of Wee Hur Holdings. NextInsight file photoAnother 99-
year leasehold residential site at Bright Hill drive was sold 
at a cost of S$719.9 psf ppr to a JV between UOL and 
Singapore Land in 2012. With Thomson Grand (launched in 
2011 and fully sold out with an ASP of S$1,330 psf) being 
the only new launch in the vicinity for the past few years, 
we expect the launch of Thomson View to be highly 
anticipated by investors.

However, the Thomson View 
project recently hit the brakes when 13 of the condo’s 
owners filed for a stop order against the sale. With the stop 
order, uncertainty over the project looms as risks of a sale 
termination or a long dreaded legal battle emerged.

The 
stop order is also likely to delay project launch and future 
earnings. Any new property cooling measures announced 
during this period may also deter buying sentiment. 
Thomson View had been unsuccessful in its two previous 
enbloc attempts in 2007 and 2011. 

Our view.While uncertainty looms over the future of 
Thomson View, there is definitely a heightened market 
interest in Wee Hur. The stock has seen a jump in volume 
since the start of the year. With an established track record 
and a good practice of rewarding shareholders with 
consistent dividend payout, any positive news about 
Thomson View will be a catalyst for the stock price.

_____________________________________________________________________________ 

sunteccitymakeover2Artist impression of a made-over Suntec City.

Morgan Stanley initiates coverage of Suntec REIT with expectations of higher dividend


Analysts: Wilson Ng, CFA, and Sean Gardiner

New top pick in S-REITS. Outperforming office assets well appreciated by the market but we think mall overhaul concerns are overdone. Our 2014/15 div forecasts are thus 12/15% above consensus.

Above consensus-dividends: We forecast +18/12% growth in 2014/15 as income from reopened spaces in Suntec Mall progressively flows through.

Renovations pose uncertainty for nearer-term dividends, but earmarked proceeds from the sale of Chijmes should more than cover any shortfall. We expect dividends to revert to pre-renovation levels at 9.7 c (annualized) by 3Q and surpass at 10.6 c by 2014.

Under-appreciated mall: At 0.9x P/B, the stock prices in a rent of only S$8.95 psf for Suntec Mall – 10% below passing rents and 30% lower than management’s target of S$12.59. 

Price target of S$2.15/shr is derived by applying a target dividend yield of 5.5% -- half a standard deviation below the long-run average of 6.0% -- to our estimated 4Q13 annualized dividend/share of 9.8 c.

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