Keppel Land

Keppel Land: record FY11 results.
Reported net profit was $1.37b, boosted by revaluation gains of $591m from investment properties, and $508m divestment gain from the sale of its 87.5% stake in Ocean Financial Centre.
Adjusted net profit was inline by StanChart’s estimates, but below BNP, HSBC and Citi expectations.
On the back of this, KPLD proposed a bumper dividend of 20cts, ahead of last yr’s div and Street expectations of 18cts. This works out to a yield of 7.8%. Mgt is committed to paying out 1/3 of realized earnings.
KPLD also reported a big jump in NAV to $3.64/sh, +28.8% yoy, which translates to a valuation of 0.71x P/B.
Net debt to equity drops to a comfortable 0.1x.

On operating metrics, in FY11, KPLD sold ~ 480 homes in Spore, lower than the 650 sold in 2010. In China, KPLD sold 1,400 units, mostly in townships, lower than the 4,100 units sold in 2010.
KPLD also announced an acquisition of a 51% stake in a prime commercial site (100k sm GFA) in Chaoyang district, Beijing, for $195m, as it continues to signal its willingness to invest in China.

StanChart maintains Underperform with TP $2.50, continues to expect residential prices and volumes to decline in Spore and China, provide few upside catalysts. Notes when Spore residential prices started to decline in 2001, KPLD traded at 1.3x P/B on avg, and 0.3x P/B during the trough.
JPM maintains Neutral with TP $2.85, expects stock to carry some near term positive momentum with the mkt looking favorably at div payout, the 30% discount to NTA, and reversion of its 2011 laggard status.
Citi maintains Neutral with TP $2.88
HSBC maintains Overweight but cuts TP to $3.10 from $3.20.
Macquarie maintains Outperform with TP $3.41, believes shares are attractive at 47% discount to RNAV.
Deutsche maintains Buy with TP $2.90, pegged to 35% discount to RNAV of $4.48.
BNP reiterates Buy with TP $3.60