Strong gains in student lodging make Wee Hur ripe for picking

Firm posts half-year net profit of $75m, with value of properties likely to increase in 2025

- Ven Sreenivasan

There has been a lot written lately about the moribund Singapore stock market. A government-led committee has now been formed to look into the malaise afflicting the local bourse.

Rather than complain about the state of the Singapore market, it might pay off to sift for overlooked nuggets arising from significant valuation gaps due to market inefficiency and a lack of investor interest.

Recently, I highlighted Sinarmas Land, Centurion, Sats and a few others, which despite strong portfolios and results were abysmally undervalued. They have recovered somewhat as investors gradually see the potential in these stocks.

But one company that has not performed despite its strong results and strong portfolio is Wee Hur Holdings.

Founded in 1980 and listed in 2008, Wee Hur started as a general contractor.

It then ventured into property development in 2009, and in 2017 started a fund of A$350 million to invest in purpose-built student accommodation (PBSA) in Australia with a target of 5,000 beds.

Fast-forward to 2022, it sold a 49.9 per cent stake in its PBSA to a wholly owned subsidiary of Singapore sovereign wealth fund GIC for A$567.9 million, valuing the seven properties at A$1.14 billion. Wee Hur owns 50.1 per cent of them.

In February 2024, these properties were revalued at about A$1.4 billion (S$1.23 billion). After the revaluation, Wee Hur's 50.1 per cent works out to 67 cents per share.

At current levels, Wee Hur is trading at a trailing price-earnings (PE) multiple of about 1.35 times and a 62 per cent discount to net asset value (NAV) of 73 cents.

Due to the extreme shortage of student accommodation in Australia, occupancy at these PBSAs will remain high and rental renewals will be at higher rates.

Also, given that Wee Hur's seven PBSAs are new, they will likely see even higher upside reversion in rental rates compared with peers.