Wing Tai Holdings (“Wing Tai”) just announced the planned issuance of 5-year senior notes at the initial price guidance (“IPG”) of 4.60%. Both the issuer and the new issuance are unrated. Wing Tai indicated that the new issue will have an issuance size of SGD 100m, with the proceeds used to finance working capital requirements and to refinance its existing borrowings. The new notes are expected to be issued on 3 April 2024, with a maturity date of 3 April 2029. We wish to note that the new issuance is made available for accredited and institutional investors only.
Wing Tai is a conglomerate headquartered in Singapore, operating a variety of businesses – property investment and development, lifestyle retail, and hospitality management solutions. It has a footprint all across the Asia-Pacific region, particularly in Singapore, Malaysia, Hong Kong, China, Japan and also Australia.
For the full year ended 30 June 2023 (“FY23”), Wing Tai saw a significant drop in its performance as compared to the previous year. Revenue fell by -7% year-on-year (“YoY”), from SGD 514.6m (FY22) to SGD 476.3m (FY23), while net profit fell by -90% YoY, from SGD 140.2m (FY22) to SGD 13.3m (FY23). The significantly lowered net profit was due to the share of results of associates and joint ventures, which saw a loss of SGD 10.4m in FY23 as compared to SGD 112.2m in FY22. This is largely due to the substantial fair value losses from Wing Tai Properties Limited in Hong Kong which saw offset by contributions from Uniqlo’s good performance in Singapore and Malaysia.
We see a slight moderation in Wing Tai’s credit profile. Wing Tai’s cash position fell from SGD 514m in FY22 to SGD 402m in FY23, primarily due to considerable cash flow used for development properties. On the other hand, its cash and cash equivalents remain more than sufficient to cover the current borrowings of SGD 71m. The total borrowings increased from SGD 591m in FY22 to SGD 671m in FY23. On the other hand, most credit metrics continue to look decent for Wing Tai, particularly with the net gearing ratio remaining low at 0.08x in FY23, a slight adjustment from 0.02x in FY22.
Wing Tai’s new offering provides a higher yield than its existing issuances of similar tenors - WINGTA 4.800% 26Oct2028 Corp (SGD) and WINGTA 3.680% 16Jan2030 Corp (SGD) with a yield to worst of 4.13% and 4.32% respectively. However, given the credit profile of Wing Tai, other property-based issuers appear relatively more attractive at the current point in time. OUESP 3.500% 21Sep2026 Corp (SGD) remains as one of our preferred picks offering a yield to maturity of 4.90%. This is considering OUE’s generally stable credit profile with the majority of its operations focusing in Singapore.
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) hold a position in OUECT 3.950% 02Jun2026 Corp (SGD), and the analyst who produced this report hold a NIL position in the abovementioned securities.
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