We previously initiated coverage on Wee Hur’s bonds earlier this year: Idea of the Week: Attractive 4.5% yield for Wee Hur’s medium-tenor 4+year bonds!
Since then, Wee Hur released its full-year results ending 31 December 2025 (FY2025). In this article, we examine the group’s latest earnings and provide our updated view on their bonds.
1. Increasing profitability with strong earnings visibility, given a record order book
• For the full year ending 31 December 2025 (FY25), revenue for the group surged 47% year on year (YoY) to S$295.4m. This was driven by a 10% YoY increase in workers' dormitory, a 83% YoY rise in property development, and a 20% YoY rise in topline by the construction segment. While fund management soared 654% YoY to S$41.8m, we highlight that this is due to the divestment of the group’s PBSA Fund I in Australia, We do not expect the growth rate for fund management to be sustainable.
• Record order book stands at an all-time high of S$673m as of 31 December 2025, marking progress to an order book surpassing S$1.0b for 2026. This massive backlog provides the group with revenue visibility through 2029, which gives comfort to bondholders owing to better cash flow visibility and supporting a better ability to service debt.
• Accommodations income from the workers' dormitory, which provides repeatable, rent-like cash flows, rose 10% YoY to S$92.7m. This growth was supported by a high 95% occupancy rate at the 15,744-bed Tuas View facility. The recent completion of the 10,500-bed Pioneer Lodge in late 2025 will be a positive contributor to this segment’s income in 2026. For the Australian PBSA business, management is actively rebuilding its fee-bearing assets under Fund III, which should support long-term stability. As mentioned in our initial coverage (see article linked above), we continue to expect the recurring income from this accommodations segment to anchor the group’s credit profile moving forward.
2. Adequate Liquidity with little refinancing risk
• The group’s debt maturity profile is relatively well-staggered with S$62.7m due within the next 12 months, a figure comfortably covered by Wee Hur’s cash position. Most of the group’s debt is due in 2030 (S$205m from its bond issuance).
• Operating cash generation has also improved significantly, with net operating cash flow skyrocketing 121% YoY to S$141.7m. This strong cash generation provides a substantial buffer for the group to service its debt while the group potentially scales up capex in line with its growth initiatives. Hence, we continue to emphasise that the possible ramp-up in capex expenditure could thin free cash flow generation for the group moving forward.
3. Decent credit profile supported by deleveraging, accompanied by comfortable interest coverage
• Wee Hur maintains its decent credit profile. As of 31 December 2025, its net gearing ratio stands at 12%, significantly lower than its peers in the local property scene. The improvement in the group’s net gearing ratio, which also came in below our estimate, is largely due to the increase in total equity driven by strong operational performance.
• As of 31 December 2025, the total debt to EBITDA ratio softened to 2.7x, largely due to the group’s issuance of these 2030 bonds, which was mitigated by the strong EBITDA growth. We also highlight that this ratio is also lower than our initial estimate of 3.3x post-debt issuance. Looking ahead, while there might be more debt issuances (as Wee Hur executes its growth initiatives), we do not expect a material weakening of this metric, as EBITDA continues to improve, given the positive operating conditions in accommodation and construction.
• Wee Hur’s interest coverage ratio of 8.4x significantly outperformed our 3.3x estimate, reflecting its stable capacity to service interest payments. While we expect this metric to moderate in 2026, as the group starts servicing the S$9.8m in annual finance costs from its recent 2030 bond issuance, we remain comfortable with Wee Hur’s ability to absorb these increased interest expenses, given the pickup in its recurring accommodations income.
Recommendations
• Wee Hur's outstanding bonds trade at a yield to worst range of 4.49%, with 4.66 years to maturity. When compared to property developers operating in Singapore of similar tenors, these yields offer an attractive yield pickup of roughly 220-260+bps.
• We believe this yield differential is possibly due to these 2030 bonds being the maiden issuance for Wee Hur.
• Investors looking for higher yields from an issuer that is displaying an improvement in credit profile can consider these bonds from Wee Hur.
Table 1: Peer Comparison:
|
Issue |
Issuer |
Ask Price |
Yield to Maturity (%) |
Years to Maturity |
|
Wee Hur Holdings Ltd |
101.30 |
4.49% |
4.66 |
|
|
Daewoo Engineering & Construction Co., Ltd. |
105.77 |
1.88% |
2.99 |
|
|
Ho Bee Land Limited |
105.13 |
2.73% |
3.34 |
|
|
GLL IHT Pte Ltd |
100.02 |
2.30% |
3.55 |
|
|
City Developments Limited |
100.03 |
2.39% |
4.73 |
|
|
Data as of 10 March 2026. |
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