MCL said it has been informed by the lawyer of the Chinese buyer of all 25 units at The Fernhill, that the buyer has sold 19 of the 20 units it had failed to pay up for by the May 4th due date. The buyer will complete the sale in May, before the expiry of the 21-day grace period from May 4th.

The Chinese buyer had earlier sold 5 units, and if full payment is not made by May 25th, MCL would have the right to forfeit the initial 20% down payment, and to re-sell the units.

As noted in our Apr comments, MCL would have no trouble re-selling these 20 units; but it is still a relief 19 units have been sold, which would save MCL the hassle of looking for buyers.

Also note that MCL disclosed in the Q1 results that had full payment been made, it would have recognized US$39.3 mln revenue instead of the reported US$8.3 mln; and profit of US$10.7 mln instead of US$1.4 mln. This suggests that the 2007 / 2008 dividend payout of 10 Singapore cents per share can easily be repeated this year, which implies 4.9% yield with the stock at $1.22.

We last downgraded the stock (then at around $1.16) to Take Profit. In view of the current market upswing, we would raise our target-selling price to around $1.40, taking into account MCL’s only-average liquidity. NAV is $1.54 per share.