F & N: Hitting a sweet spot

Hitting a sweet spot. Recent launches by the Group have met with overwhelming response in terms of units sold and ASPs. The latest being 8@Woodleigh, which sold c. 90% of the units over its soft launch last weekend at ASPs of S$770psf, 10% above our expectations. Higher-end projects such as Martin Place Residences also met with keen response, at ASPs of S$1,450-$1,700psf, higher than the S$1,250psf we had anticipated. Recent positive property sentiment in China could also bode well for the Group's developments there.

Acquiring land soon? Currently, the Group has an existing landbank of about 930 attributable units in Singapore - relatively low, in our view. We believe it will be looking to acquire land, particularly from URA's Reserve List GLS. This could be a catalyst for the counter, if it materializes, as it (i) signals a positive on-the-ground view of the property market; and (ii) prompt an upward revision on RNAVs.

Upgrade RNAV and recommendation, Buy. We raised our SOTP RNAV by 13% to $5.15 as we (i) revised up our ASPs for its development property launches to current clearing levels and transacted volumes; and (ii) factored in higher market values for its listed entities. We narrowed our discount to 10% (from 20% previously) premising on (i) our house view that the worst is over; (ii) a better than expected clearing levels for property; (iii) potential for land acquisition signaling on-the-ground view that the market outlook is brighter. Upgrade to Buy, TP: S$4.52.

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