Surplus overload: Oxley chalks up $700m in Singapore projects

Potential surplus for FY15-17 at a whopping $1 billion.

Oxley Holdings was listed 3 years ago as a boutique developer of residential projects, launching some 28 projects that have since been substantially sold out.

A report by RHB reveals that Oxley has chalked up over $700m of surplus for its Singapore development projects, which will be recognized over the next 2-3 years. In addition, its first hospitality project, The PINEs, will generate a surplus of $380m and a recurring income stream of $35m upon completion.

Also, since last year, Oxley has amassed an overseas portfolio of 13 prime sites in Malaysia, the UK, China and Cambodia. It has launched two projects, Royal Wharf in the UK and The Bridge in Cambodia, achieving $1billion of pre-sales to be booked over the next 2-3 years. The sustained momentum in upcoming launches could extend earnings visibility into FY18 and beyond.

Here’s more from RHB:

We value Oxley using a reappraised net asset value (RNAV) method to derive a fair value of SGD3.32bn, or SGD1.14 per share. Our valuation is premised on a summation of Oxley’s current net asset value, and the valuation surplus accruing from its local and overseas projects. We apply a 20% discount to our RNAV to derive a TP of SGD0.91. Initiate coverage with a BUY rating.

While Oxley has executed well on the local front, its track record in overseas markets is limited. Its overseas projects in less developed markets are subjected to greater regulatory and policy risks. Any change in regulations involving taxes on property sales or foreign property ownership could have a direct impact on its sales rate.