Is Wing Tai one of the better SGX stocks?
Wing Tai is a property stock listed on SGX with a listed subsidiary on HKEX.
Investment Thesis
Wing Tai is a property Group with about an equal amount of assets in the Property Development and Property Investment segments. About 50 % of the assets are in Singapore and 35 % are in Hong Kong. The diversity has provided the Group with some protection against any slowdown in the property market.
While its performance had declined from the 2013/14 peak, the Group seemed to have arrested this decline. I do not expect losses going forward. Wing Tai is currently trading at a significant discount to its Book Value and EPV. There is a sufficient margin of safety to invest in Wing Tai.
Rationale
Wing Tai is a Property Group. An equal amount of the Group’s assets are tied up in the Property Development and Property Investment segments. Singapore and Hong Kong are important markets for the Group.
- The Group is dependent on the performance of the residential development and office rental markets. The residential activities are in Singapore, Malaysia, and Hong Kong. The office rental operations are in Hong Kong and Singapore.
- The Group operates in different countries. It also covers the rental and property for sales markets. The diversity offers some downside protection as the various property cycles are not in sync.
- Wing Tai is fundamentally strong. It has the financial resources to withstand a soft property market. It has a good performance track record and has managed to be profitable in 2021.
- A valuation of Wing Tai showed that there is a good margin of safety at the current price.
For details of the analysis refer to the article on my blog i4value.asia or the following link:
https://www.i4value.asia/2022/04/is-wing-tai-one-of-better-sgx-stocks.html#more
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