Wing Tai

Wing Tai: Mgt said recent measures are likely to impact sales as up to half of Wing Tai’s sales have been driven by foreigners. Given the recent round of M&A within the sector, mgt stated that it is unlikely to look at privatisation just yet as there is a one-year moratorium from the partial offer. Add that future launches will be in the mid market segment given slower activity in the luxury segment. Meanwhile, the retail business continues to perform well with margins improving in FY12. CS note that while there may be share price overhang from recent policy meausres, note cash flow remains strong with profit recognition improving, while valuation provides downside support, at 0.62x P/B and 28% discount to RNAV. Maintain NEUTRAL with \new TP of $1.75, pegged to a 30% discount to RNAV of $2.50.