Wing Tai: An Eye On The Sky

Blue or Grey Sky? At our conference, client interest in Wing Tai mainly centered on its upcoming launch of Ascentia Sky, which is expected to enter the market this week. Our channel checks indicate ASPs post-discount starting from around S$1,100 psf onwards for the 373-unit project. Following recent market trends, the project has been reconfigured to include a greater proportion (c.40% each) of 2 and 3 bedroom units. Our current valuation is based on an ASP of S$1,200 psf for Ascentia Sky, which is close to the 2007 peak achieved at nearby Metropolitan. As Wing Tai only has a 40% stake, our sensitivity analysis indicates every S$100 psf increase in ASP translates to a 0.5 Scent increase in RNAV.

Room With A Vue. Wing Tai's other 2009 offering for now is Belle Vue Residences. A total of 79 units out of this 176-unit project have been launched, with 61 units sold at between S$1,700-1,900 psf. More than 80% of buyers are local. Around 80% of buyers have taken up the Deferred Payment Scheme (DPS), possibly eyeing a quick flip as the project obtains TOP in a year.

Upgrade to BUY, TP S$1.56 gives 15% upside. Adjusting our ASP assumptions for Ascentia to S$1,200 psf, our RNAV is revised to S$1.95 (from S$1.93). We maintain our 20% discount to RNAV (between historical average and +1SD), for a TP of S$1.56 (prev S$1.54). Upgrade to BUY, with 15% upside. Accumulate this high-beta, purer residential play on expectations of recovery filtering up to the high-end.

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