OUE resumes share buybacks after brief pause; Wing Tai chairman’s wife actively buying
Property, hospitality and healthcare play OUE is back buying back shares after a brief respite this year compared to previous years. OUE started buying on Sept 22, when it acquired 16,900 shares on the open market at $1.01 each. This was followed by 40,400 shares at $1.028 each on Sept 25 and most recently on Sept 27, when it acquired 51,000 shares at $1.04 each.
The transactions bring the cumulative number of shares bought under the current mandate to 140,300 units, equivalent to 0.011% of the total share base.
OUE was buying shares up until Dec 6 last year under the previous mandate, buying back more than 22.4 million shares. This was more than double the more than 9.1 million shares bought back in 2021.
OUE shares, like many other property plays, trade consistently and significantly below their book values. As at June 30, OUE’s NAV per share was $4.33, down slightly from $4.35 as at Dec 31, 2022. Year to date, OUE shares are down 16.8% to trade at $1.03 as at Sept 26.
In 1HFY2023 ended June, OUE reported higher revenue of $304.5 million, up 53.3% y-o-y. However, earnings dropped by 54.6% y-o-y from $88.7 million to $40.2 million.
OUE attributes the drop to a lower share of results of equity accounted investments, higher financing costs and also lower fair value booked on its investment properties.
OUE’s revenue growth was largely driven by a recovery in its hospitality business, which enjoyed a twofold jump to $95.8 million, helped by the reopening of some rooms in its Hilton Singapore Orchard hotel on top of recovery from the pandemic.
OUE’s healthcare segment also contributed to higher revenue, reporting 79.1% higher y-o-y sales of $79.8 million as the company began to book full-period contributions from First REIT. The company also booked $8 million in its property development business as well from selling three units at OUE
Twin Peaks.
On the other hand, OUE booked lower earnings in its equity-accounted investments, specifically Gemdale Properties and Investment Corp, and PT Matahari Department Store.
From 1HFY2022 earnings of $77.6 million, OUE’s share of earnings dropped to $25.8 million in 1HFY2023. Despite the lower earnings, OUE has maintained its interim dividend at a cent per share.
Wing Tai sees insider trades
Cheng Wai Keung, chairman of Wing Tai Holdings, saw an increase in his deemed stake after his wife Helen Chow made a series of purchases from the open market almost daily this month.
Chow is also a director of Wing Tai Property Management. According to Wing Tai’s filings to the Singapore Exchange, Chow started buying on Sept 8, adding 21,400 shares to her stake. While the purchase price was not disclosed, Wing Tai shares closed at $1.36 on Sept 8. This is a significant discount off the company’s NAV of $4.13 per share as at June 30.
Over the following fortnight, Chow was in the market almost daily, buying from as little as 10,300 shares on Sept 18 to as much as 163,900 on Sept 13. Over this past month, Wing Tai shares hovered between $1.35 and $1.42.
After the most recent acquisition of 28,000 shares on Sept 26, Cheng’s total interest in Wing Tai hit 463.69 million or a total stake of 61.01%.
Cheng’s deemed stake of nearly 463.5 million shares — equivalent to 60.98% — is mainly held through an entity called Wing Sun Development. Cheng’s direct stake remains at 214,400 shares or 0.03%.
On Aug 25, Wing Tai reported earnings of $13.3 million in FY2023 ended June 30, down from $140.2 million recorded a year earlier. Wing Tai attributes the lower earnings to its associates and joint ventures in Hong Kong.
Despite the lower earnings, the company plans to pay a first and final dividend of 3 cents, plus a special dividend of 2 cents. In FY2022, Wing Tai paid a total of 6 cents.