UOL reported 2Q13 PATMI of S$431.4m which increased 151% YoY mostly due to fair value gains at Novena Square, United Square and Odeon Towers where valuation cap rates have compressed some 25 to 50 bps. Excluding fair value and other one-time gains, 1H13 attributable profit is an estimated S$164.4m which is broadly in line with our expectations – constituting 45% of OIR’s FY13 forecast of S$368.3m – but somewhat below the street’s view (41% of FY13 consensus of S$391.8m). For UOL’s residential strategy ahead, we see management remaining cautious and more likely to replenish land at the rate of sales or below, and capital deployment is likely to be focused on growing recurring income in investment and hospitality assets. To recap, UOL had made a cash offer of S$2.55 per share to delist PPHG and we understand that the exit offer is now unconditional with a closing date of 13 Aug 2013. Maintain HOLD with an unchanged fair value estimate of S$7.16 (20% RNAV disc.).
Results mostly in line after excluding fair value gains
UOL reported 2Q13 PATMI of S$431.4m which increased 151% YoY mostly due to fair value gains at Novena Square, United Square and Odeon Towers where valuation cap rates have compressed some 25 to 50 bps. Excluding fair value and other one-time gains, 1H13 attributable profit is an estimated S$164.4m which is broadly in line with our expectations – constituting 45% of OIR’s FY13 forecast of S$368.3m – but somewhat below the street’s view (41% of FY13 consensus of S$391.8m). UOL’s 1H13 topline cumulates to S$552.1m which is again broadly on target and forms 47% of our forecast of S$1,168.7m for FY13.
More likely to replenish land-bank cautiously
For its residential strategy ahead, we see management remaining cautious and more likely to replenish land at the rate of sales or below. The group recently won a new GLS site at Sengkang West Way at S$262.1m which is expected to yield 550 homes. Future launches in 2H13 are Bright Hill (445 units) and St Patrick’s Garden (186 units) projects in 2H13. Management reports that it has launched three blocks (480 units) at the Esplanade in Tianjin China with about 80% of units sold. Its Jalan Conley project in Kuala Lumpur, Malaysia is on target to be launched in 4Q this year.
Pan Pacific Hotel Group exit offer now unconditional
The direction of capital deployment ahead is likely to be focused on growing recurring income in investment and hospitality assets. To recap, UOL had made a cash offer of S$2.55 per share to delist PPHG and we understand that the exit offer is now unconditional with a closing date of 13 Aug 2013. Again, from our previous discussions with management, we continue to believe that material operating changes, i.e., a major re-structuring or REIT listing, are unlikely for these newly fully consolidated hotel assets.
Maintain HOLD with unchanged S$7.16 fair value
Maintain HOLD with an unchanged fair value estimate of S$7.16 (20% RNAV disc.).
UOL reported 2Q13 PATMI of S$431.4m which increased 151% YoY mostly due to fair value gains at Novena Square, United Square and Odeon Towers where valuation cap rates have compressed some 25 to 50 bps. Excluding fair value and other one-time gains, 1H13 attributable profit is an estimated S$164.4m which is broadly in line with our expectations – constituting 45% of OIR’s FY13 forecast of S$368.3m – but somewhat below the street’s view (41% of FY13 consensus of S$391.8m). UOL’s 1H13 topline cumulates to S$552.1m which is again broadly on target and forms 47% of our forecast of S$1,168.7m for FY13.
More likely to replenish land-bank cautiously
For its residential strategy ahead, we see management remaining cautious and more likely to replenish land at the rate of sales or below. The group recently won a new GLS site at Sengkang West Way at S$262.1m which is expected to yield 550 homes. Future launches in 2H13 are Bright Hill (445 units) and St Patrick’s Garden (186 units) projects in 2H13. Management reports that it has launched three blocks (480 units) at the Esplanade in Tianjin China with about 80% of units sold. Its Jalan Conley project in Kuala Lumpur, Malaysia is on target to be launched in 4Q this year.
Pan Pacific Hotel Group exit offer now unconditional
The direction of capital deployment ahead is likely to be focused on growing recurring income in investment and hospitality assets. To recap, UOL had made a cash offer of S$2.55 per share to delist PPHG and we understand that the exit offer is now unconditional with a closing date of 13 Aug 2013. Again, from our previous discussions with management, we continue to believe that material operating changes, i.e., a major re-structuring or REIT listing, are unlikely for these newly fully consolidated hotel assets.
Maintain HOLD with unchanged S$7.16 fair value
Maintain HOLD with an unchanged fair value estimate of S$7.16 (20% RNAV disc.).
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