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Monday, 13 May 2019

Wing Tai Holdings Limited (SGX:W05) - Credit Review

Company Summary
Wing Tai Holdings Limited (SGX:W05) is a Singapore listed company with a market capitalization standing at c.SGD1.5b as of 14 March 2019. It operates in three main segments; property development (c. 51% of FY18 revenues), property investment (c. 10% of FY18 revenues) and apparel retail (c. 36% of FY18 revenues). The property development segment focuses on luxury and high-end residential development, primarily residential properties in Singapore, Malaysia, China and Hong Kong. The property investment segment covers investment properties across Singapore, Malaysia, Australia and China and provides a stream of recurring revenues, albeit contributing a small proportion of total revenues. As at Dec 2018, the company's investment properties portfolio stood at c. SGD729m. Lastly, the apparel retail segment includes 14 brands in Singapore and 13 brands in Malaysia (including Uniqlo), with retail floorspace spanning more than 1 million sf over 229 stores as at Jun 2018. The company's founding Cheng family holds a large stake in the company, with a combined interest of c. 51.5% as at 10 Sep 2018.

Metrics - absolute and compared to peers (show RV)
Market Cap
EBITDA Interest Coverage (x)
EBIT Interest Coverage (x) - more stringent because EBIT is often lower than EBITDA
Debt/ EBITDA (x)
Debt/ EBIT (x) - more stringent because EBIT is often lower than EBITDA
Debt/ Equity (%) - more stringent because total debt is often higher than net debt
Net Debt/ Equity (%) - (interest bearing debt – cash) / net ordinary share equity
Cash/ Short Term Debt (%)
Cash + CFO/ Short Term Debt  (%)
Gearing - [Debt + Perpetuals]/ Equity
Net Gearing Ratio
Business and geographical segment revenues and earnings (absolute and %)

WTH earnings is volatile, so EBITDA ratios are unreliable

Bond relative valuation to peers
Similar industry/ sector
Similar maturity

Credit review
Strengths



Weaknesses

Upcoming expenditures and CAPEX (unsure)
In April 2019, the Group was awarded the tender for a 99-year leasehold land parcel located at Middle Road, Singapore. This land has a site area of 80,327 square feet and the Group plans to develop it as a residential development with commercial uses at the first storey
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