UOL reported FY11 PATMI of S$664m, down 12% YoY mostly due to lower fair value gains on investments properties of associated companies. Adjusting for one-time gains, FY11 PATMI was S$535m which came in very close to our estimates of S$538m but somewhat below consensus (S$562m). Management also declared total dividends of 15 S-cents (10 cents final, 5 cents special). The group’s outlook is mostly unchanged and our thesis continues to be that its limited land-bank would shelter it from residential uncertainty ahead. However, its share price has appreciated 20% since our last update; we are downgrading to HOLD as our fair value estimate remains intact at S$4.77 (30% discount to RNAV). We expect sales at the Lion City project and accretive land-banking to be key catalysts ahead.
4Q11 results mostly within expectations
UOL reported FY11 PATMI of S$664m, down 12% YoY mostly due to lower fair value gains on investments properties of associated companies. Adjusting for one-time gains, FY11 PATMI was S$535m which came in very close to our estimates of S$538m but somewhat below consensus (S$562m). FY11 topline came in at S$1,960m, up 45% YoY due to higher recognition of projects sold, added contributions from ParkRoyal Serviced Suites in KL from 4Q10 and ParkRoyal Melbourne Airport Hotel (acquired Apr11). The topline came in above our forecast of S$1,858m and that of consensus (S$1,789m). Management also declared dividends of 15 S-cents (10 cents final, 5 cents special).
Holding prices at the Archipelago
Sales at the Archipelago launched in Dec11 continue to be slower than we had hoped with ~160 units out of 577 units sold as of 24 Feb 12. Management indicated that they would be holding prices mostly firm (~S$1,000 psf) in order not to undercut previous buyers – a strategy we agree with but would imply the Archipelago could take longer to sell than we previously projected. Looking ahead, we expect the condominium units at the Lion City project and The Esplanade in Tianjin to launch in 2Q12.
Healthy numbers from hotels
We saw another set of positive results from the hotel segment as revenue increased 10% YoY to S$358m, boosted by contributions from the ParkRoyal Melbourne Airport Hotel (acquired Apr11). Except for North America, REVPAR increased broadly across the hotel portfolio.
Outlook mostly intact
UOL’s outlook is mostly unchanged and our thesis continues to be that its limited land-bank would shelter it from residential uncertainty ahead. Management indicated a cautious view of the market, which is reassuring in our view, and we expect a prudent stance to land acquisitions in FY12. However, its share price has appreciated 20% since our last update; we are downgrading to HOLD as our fair value estimate remains intact at S$4.77 (30% discount to RNAV). We expect sales at the Lion City project and accretive land-banking to be key catalysts ahead.
UOL reported FY11 PATMI of S$664m, down 12% YoY mostly due to lower fair value gains on investments properties of associated companies. Adjusting for one-time gains, FY11 PATMI was S$535m which came in very close to our estimates of S$538m but somewhat below consensus (S$562m). FY11 topline came in at S$1,960m, up 45% YoY due to higher recognition of projects sold, added contributions from ParkRoyal Serviced Suites in KL from 4Q10 and ParkRoyal Melbourne Airport Hotel (acquired Apr11). The topline came in above our forecast of S$1,858m and that of consensus (S$1,789m). Management also declared dividends of 15 S-cents (10 cents final, 5 cents special).
Holding prices at the Archipelago
Sales at the Archipelago launched in Dec11 continue to be slower than we had hoped with ~160 units out of 577 units sold as of 24 Feb 12. Management indicated that they would be holding prices mostly firm (~S$1,000 psf) in order not to undercut previous buyers – a strategy we agree with but would imply the Archipelago could take longer to sell than we previously projected. Looking ahead, we expect the condominium units at the Lion City project and The Esplanade in Tianjin to launch in 2Q12.
Healthy numbers from hotels
We saw another set of positive results from the hotel segment as revenue increased 10% YoY to S$358m, boosted by contributions from the ParkRoyal Melbourne Airport Hotel (acquired Apr11). Except for North America, REVPAR increased broadly across the hotel portfolio.
Outlook mostly intact
UOL’s outlook is mostly unchanged and our thesis continues to be that its limited land-bank would shelter it from residential uncertainty ahead. Management indicated a cautious view of the market, which is reassuring in our view, and we expect a prudent stance to land acquisitions in FY12. However, its share price has appreciated 20% since our last update; we are downgrading to HOLD as our fair value estimate remains intact at S$4.77 (30% discount to RNAV). We expect sales at the Lion City project and accretive land-banking to be key catalysts ahead.
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