The SEA Analyst, thanks for highlighting Coliwoo Holdings Limited (W8W; COLIWOO SP)
(1) "The metric that matters is core PATMI. Reported net profit is unreliable for Coliwoo because fair value swings on investment properties create wild distortions"
I think even core PATMI may overstate future recurring profits.
In FY2025, core PATMI reached SGD 23.0 mn. This included SGD 7.4 mn gains from net investment in subleases.
These gains arose because Coliwoo renewed 2 subleases. The new subleases covered the majority of the duration of Coliwoo's master lease with its landlord.
In FY2025, Coliwoo recognised the 'profits' from the subleases upfront.
Investors should note these gains are lumpy and less predictable. They rely on the timing of long-term finance subleases that Coliwoo signs.
Thanks for raising this. It's a fair and technically sound point.
You're right that the SGD 7.4 mn gain from net investment in subleases sits in core PATMI and deserves scrutiny. Under IFRS 16, when Coliwoo renews a sublease for a term that covers most of the remaining master lease, it reclassifies the sublease from operating to finance, derecognises the ROU asset, and books the gain upfront. That recognition is front-loaded by construction, not a cash inflow.
The honest read: strip that out, and FY2025 recurring core PATMI is closer to ~SGD 15–16 mn, not SGD 23 mn.
Where we'd push back slightly: these gains are not random. We think they arise from deliberate portfolio management. Coliwoo actively signs long-duration subleases as its master lease book matures. The frequency is lumpy but not unforeseeable. As the portfolio scales and more master leases reach the renewal window, the cadence should become more regular, even if not perfectly annual.
The better framing for investors is probably: (a) ~SGD 15–16 mn in steady-state recurring earnings, with (b) periodic finance sublease top-ups as the portfolio turns over. Neither number alone tells the full story.
Worth monitoring whether management starts disclosing a sublease renewal pipeline. That would help investors model the lumpiness more precisely.
The SEA Analyst, thanks for highlighting Coliwoo Holdings Limited (W8W; COLIWOO SP)
(1) "The metric that matters is core PATMI. Reported net profit is unreliable for Coliwoo because fair value swings on investment properties create wild distortions"
I think even core PATMI may overstate future recurring profits.
In FY2025, core PATMI reached SGD 23.0 mn. This included SGD 7.4 mn gains from net investment in subleases.
These gains arose because Coliwoo renewed 2 subleases. The new subleases covered the majority of the duration of Coliwoo's master lease with its landlord.
In FY2025, Coliwoo recognised the 'profits' from the subleases upfront.
Investors should note these gains are lumpy and less predictable. They rely on the timing of long-term finance subleases that Coliwoo signs.
Thanks for raising this. It's a fair and technically sound point.
You're right that the SGD 7.4 mn gain from net investment in subleases sits in core PATMI and deserves scrutiny. Under IFRS 16, when Coliwoo renews a sublease for a term that covers most of the remaining master lease, it reclassifies the sublease from operating to finance, derecognises the ROU asset, and books the gain upfront. That recognition is front-loaded by construction, not a cash inflow.
The honest read: strip that out, and FY2025 recurring core PATMI is closer to ~SGD 15–16 mn, not SGD 23 mn.
Where we'd push back slightly: these gains are not random. We think they arise from deliberate portfolio management. Coliwoo actively signs long-duration subleases as its master lease book matures. The frequency is lumpy but not unforeseeable. As the portfolio scales and more master leases reach the renewal window, the cadence should become more regular, even if not perfectly annual.
The better framing for investors is probably: (a) ~SGD 15–16 mn in steady-state recurring earnings, with (b) periodic finance sublease top-ups as the portfolio turns over. Neither number alone tells the full story.
Worth monitoring whether management starts disclosing a sublease renewal pipeline. That would help investors model the lumpiness more precisely.
Yup! Management disclosure on the sublease pipeline would be highly valuable.
Alternatively, investors could smooth the earnings by spreading those upfront gains over the sublease duration.
The main risk is assuming the full SGD 23.0 mn core PATMI is recurring and slapping a multiple on it.
On a side note, fair value loss on investment properties is also coincidentally SGD 7.4 mn in the same year.