UOL

UOL: Grp announced a record quarterly rev of $345.2m, +7%YoY and QoQ, while Net Profit was at $124.7m, +18%YoY but -15.5%QoQ. High rev attributed to higher profit recognition from property development, stronger performance in grp’s hotel operations and increased profits from associated Cos.....

Property dev which was 50% of profit contribution, boosted by progressive recognition of successful sales, while property investments which contributed to 28% of profits recorded improved rev and profit in tandem with improving office market and better rev from service apartments. Hotel operations operating profit rose 24%YoY boosted by stellar performance in SG’s tourism sector....

Results put 9m10 net profit at $360.4m, -14% YoY, attributed to a negative goodwill gain of $279.2m in 2009, while 9m10 Rev grew 25% YoY to $914.9m. Going forward, grp aims to enhance earnings base in China’s residential market, while property investment and hotel operations will continue to provide steady income stream and underpin gearing capacity for new acquisitions....

We note that at current levels, grp trades at undemanding valuations of 0.83xP/B and a discount of 35% to RNAV of $7.15, while balance sheet has strengthened, with gearing ratio declining to 34% from 43% due to net reduction in bank borrowings and increase in shareholders’ funds.