BUY S$4.51
Price Target : S$ 5.19 (Prev S$ 5.40)
At a Glance
• 2Q11 net profit up 16%, in line
• Residential landbank as well as recurrent leasing and hotel income provide earnings visibility
• Maintain Buy, lowered TP to $5.19 after adjusting for value of listed holdings
Comment on Results
In line with estimates. UOL reported a 16% rise in net profit to $202.2m on a 40% jump in revenue to $455.9m. However, excluding revaluation gains of $96.5m, earnings came in at $110.6m, down 25% yoy. The drag was largely the result of significantly lower associate contribution from projects such as Nassim Park Residences and higher finance expenses, which was partially offset by higher revaluations and operating results from property development, leasing, hotel operations and dividend contributions. Revenue from property development activities surged 58% yoy thanks to ongoing contributions from projects such as Double Bay Residences, Terrene at Bukit Timah as well as Spottiswoode Residences. In addition, there were additional contributions from Parkroyal Serviced Suites in KL, which commenced operations in 4Q10 and Parkroyal Melbourne Airport, acquired in April this year.
Spore and China landbank provide development visibility. Looking ahead, the remaining Lion City Hotel/Hollywood Theatre development and Bedok Reservoir site would collectively offer an attributable c550 units. UOL remains cautious in terms of landbanking in Singapore. It has received provisional permission to develop a retail/SOHO for the former site and plans to market the Bedok Reservoir site later this year.
Recommendation
Maintain Buy. We continue to like UOL for its multi-engine growth prospects in the residential, commercial and hospitality sectors. Maintain Buy with a lower TP of $5.19 after adjusting for lower listed equities value, pegged at an adjusted 15% discount to RNAV.
No comments:
Post a Comment