FY14 core profits a shade lower. Excluding S$6.2m of fair value gains on investment and acquisition and S$3.7m relating to employee stock options expense which were not within our forecast, core profit would be S$13.9m, compared to our expectation of S$14.8m. FY14 sales surged 66% y-o-y to S$100.4m, within forecast. For the quarter, net profit was S$6.4m (-49% y-o-y, +22% q-o-q) on sales of S$27.5m (+34% y-o-y, -9% q-o-q).
Property was main growth driver, recording sales ofS$90.9m in FY14 including S$45.8m of LDRs for zone B in Star City to an investor. Yoma also earned incentive fees of S$5.3m for meeting sales targets for block B1, B2 and B5. Incentives fees for B3 and B4 are expected in the coming quarters. In terms of units, Yoma sold 770k units in FY14 compared to 491 units in FY13 and our 700k assumption. ASP was stable at US$150 psf. Elsewhere, Balloon-over-Bagan was the other profitable venture despite only operating for a few months in the year due to seasonality.
Star City’s 940-unit Zone C going upmarket - upside potential. Already, properties near Dulwich College are expected to attract premium pricing. Additionally, Yoma is lifting height and raising specifications of this new phase to boost GFA and to offer units with more
attractive views for higher prices. Conservatively, we have assumed 6-7% y-o-y rise in ASPs. Further ASP expansion would therefore lead to potential earnings upside.
Among non-property, tourism would ease during off-peak season but telecom unit is well placed to sign more tower contracts. Despite difficulty in importing supplies, Yoma continues to build more towers than competitors. Management is also looking to restructure its stake in the consortium, which we read positively.
Maintain Buy, TP slightly lowered to S$1 as we trimmed our forecast to assume lower non-property contributions and employee stock option charges. As the long-stop date for Landmark’s acquisition closes end of June, we expect the conclusion of the deal to be a catalyst for the stock.
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