Maybank KimEng started Oxley Holdings at Buy with a S$0.56 target price, calling it a “strong proxy” to Singapore’s recovering residential property market.
“We expect its sector-leading returns to continue, on the back of contributions from new local launches and the recognition of strong overseas presales,” the brokerage said in a note on Friday. “Successful launches in Singapore’s residential market could narrow its RNAV [revalued net asset value] discount, we believe.”
Oxley and its partners were early movers in predicting a rebound in Singapore’s residential property market and started buying sites in mid-2017, the brokerage said.
“This allowed the company to accumulate a sizeable inventory of over 4,000 units worth a combined gross development value of S$5 billion. Our calculations suggest that it now has the largest housing stock in Singapore,” it said. “Its well-timed acquisitions also give the group a considerable land-cost advantage at several projects, which could lead to competitive pricing for swift sales.”
In the office segment, the brokerage said it expected Oxley could capitalize on the limited prime office supply expected over 2018-20 by filling its vacancy in its newly acquired Chevron House building with higher-yielding tenants.
Maybank KimEng also said that near-term earnings would be anchored by overseas markets, with Oxley having unbilled sales of around S$1.6 billion.
The stock ended Monday down 3.26 percent at S$0.45.