Tuesday, 12 August 2014

UOL

OCBC on 11 Aug 2014

UOL reported 2Q14 PATMI of S$211.7m, which decreased 51% YoY mostly due to lower fair value gains from investment properties at both the group level (down 75% to S$85.0m) and at associated companies (down 21% to S$52.5m), partially offset by higher share of profits from associated companies (up 56% to S$38.4m) with stronger contributions from Pan Pacific Singapore, Archipelago and Thomson Three. Excluding one-time items, we estimate 2H14 core PATMI at S$212.3m, which is judged to be within expectations and makes up 63.2% of our full year forecast. We understand from management that Seventy St. Patrick’s would likely be launched later this year, while its condo projects in Upper Paya Lebar and Prince Charles Crescent could come onto the market in FY15. Maintain BUY with an unchanged fair value estimate of S$6.95 (20% RNAV disc.).

2Q14 results within expectations
UOL reported 2Q14 PATMI of S$211.7m, which decreased 51% YoY mostly due to lower fair value gains from investment properties at both the group level (down 75% to S$85.0m) and at associated companies (down 21% to S$52.5m), partially offset by higher share of profits from associated companies (up 56% to S$38.4m) with stronger contributions from Pan Pacific Singapore, Archipelago and Thomson Three. Excluding one-time items, we estimate 2H14 core PATMI at S$212.3m, which is judged to be within expectations and makes up 63.2% of our full year forecast. In terms of the topline, 2Q14 revenue came in at S$213.6m, down 30% YoY given the absence of contributions from two projects, Waterbank at Dakota and Spottiswoode Residences, which achieved TOP in May-13 and Dec-13, respectively. 

Seventy St. Patrick’s condo ready for launch
For existing domestic residential projects that have been launched, Riverbank@Fernvale (555 total units) and Thomson Three (445 total units) are 42% and 91% sold, respectively, as at end Jun-14. We understand from management that Seventy St. Patrick’s would likely be launched later this year, while its condo projects in Upper Paya Lebar and Prince Charles Crescent could come onto the market in FY15. Management indicates that conditions in the domestic residential space continue to be difficult and they would replenish land-bank on a very selective basis.

One KM now ~90% pre-leased
The pre-commitment level at One KM, slated for a soft opening in 2H14, is now ~ 90% pre-leased, though management cautioned that it could take time for a new mall in that area to gain retail traction, amidst other headwinds such as labor shortage and rising costs as well. The group also reported broad-based RevPar growth across its hotel portfolio over 2Q14, though it noted that travel patterns ahead could be affected by rising geo-political tensions. Maintain BUY with an unchanged fair value estimate of S$6.95 (20% RNAV disc.).

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