■ Wheelock Properties (S) Ltd (“Wheelock”) has seen its share price fall 6.0% over the last two months and is down another 1.1% intraday to S$1.79. This decline is in line with the decline in the STI (down 5.9%) over the same period and in our view is likely driven by a muted outlook in the domestic residential market and macro concerns over a potential Greek default and exit from the EU.
■ Technically, the company’s share price has recently bounced off its firm S$1.75 horizontal support level and we believe this rebound could potentially continue from current levels.
■ Wheelock’s management is currently in a process to rejuvenate the Scotts Square retail mail with leading fashion powerhouses and interesting F&B concepts, and we understand extensive advertising and promotion programs are in store for FY15. Key investment asset Wheelock Place continues to put up a steady performance with its occupancy rate kept at a firm 99.6% as at end 1Q15, while the blended monthly rent was mostly flat QoQ at ~S$13.50 psf. As at end 1Q15, the group’s balance sheet remains in a solid position with S$406.5m in cash and a low net gearing of 8.3%.
Fundamentally, we have a BUY rating and S$2.27 fair value estimate within a 12-month investment horizon. (Read Report)
Source : OCBC Investment Research