Here's what boosted Wing Tai Holdings' 122% jump in net profit

More residential launches seen this year.

According to CIMB, Wing Tai Holdings' 3Q13 revenue and core net profit soared 256% and 122% yoy, respectively, mainly attributed to full recognition of Malaysian project, Verticas Residences upon completion and additional sales of Singapore projects. More units were sold in completed projects, Helios and Belle Vue Residences.

CIMB noted that based on URA data, six units of L’VIV and 29 units of Foresque Residences were sold in 3Q13. In Feb, one unit was launched and sold at ultra-high-end Le Nouvel Ardmore, at a price of S$4,372 psf.

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We expect Wing Tai’s freehold residential project The Tembusu to be launched in 4Q13. Demand is expected to be strong, going by generally robust demand for private residential units in the outside centralregion (OCR).

Given its freehold status and close proximity to amenities at Kovan centre, the property should fetch an ASP of S$1,200psf, translating into exceptionally high margins as the land is booked at historical cost. Our concern though is with the high-end, for which Wing Tai still has inventory and demand remains weak. Sales of the remaining units at Helios, Belle Vue and Ardmore could stay slow.