Sino Land reported strong earnings in 1H FY18 amid recognition of two sizable disposal gains, in line with our forecasts, and declared a HK$0.45 special dividend exhibiting active capital management in our view. Management expects to launch on 5 new projects in HK in next 12-months. We highlight results and project pipeline details within. Reiterate Buy.
Sino Land reported HK$8.7bn underlying proﬁt for 1HFY18, upn 218% yoy, of which c.HK$5.65bn was from disposal gains at Chengdu projects, in line with our forecasts and previously reported guidance on disposals (Sept 2017).
While keeping its interim DPS unchanged at HK$0.13,n management declared a HK$0.45 special dividend, roughly equating to 50% of the aforesaid disposal gains.
Management noted plans to strike a balance between capital management and growth needs in view of aforesaid gain. Net attributable rental revenue up 2% yoy to an annualizedn c.HK$3.5bn, or c.HK$0.55/share. BVPS up 5% hoh to HK$21 .38.
Even after spending an attributable c.HK$15bn on siten acquisitions in HK during the period, the company still sits on HK$26bn net cash (including associates/JVs), which equates to c.HK$4.1/share or 29% its market cap.
Management highlighted a strong new launch pipeline in then next 12 months, including a Kowloon Bay ofﬁce project (attr. 147k sq GFA; 1HCY18), Sham Shui Po residential project (attr.