This equates to an estimated gross development value (GDV) of $2.5 billion ($9.54 per share), providing multi-year income visibility.
“Given Singapore’s acute land scarcity and tightly regulated supply, the structurally tight supply-demand backdrop continues to underpin price resilience of landed properties across cycles – making Bukit Sembawang’s landbank all the more valuable,” they state.
In both Foo and Tan’s view, Bukit Sembawang as a good potential candidate for outsized capital return and anchored by a “best-in-class” balance sheet.
“The company stands out among Singapore developers with its fortress balance sheet and its high-quality landbank. The group holds record cash of $2.25 per share and carries zero debt, affording it exceptional financial flexibility and scope to deliver materially higher payouts.
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Based on their estimates, a “bonanza” special dividend of up to $1.00 per share is well within reach for Bukit Sembawang, which underscores the embedded capital efficiency and near-term catalysts for a meaningful re-rating of the company’s stock.
With this, the DBS analysts have indicated a fair value of $5.88 a share for Bukit Sembawang’s stock. Their fair value is pegged to a 45% discount of their revalued net asset value (RNAV), in line with the rest of the developer peers.
As at 9.25am, shares in Bukit Sembawang are trading 7 cents higher or 1.68% up at $4.24.
