Singland

Singland: Announced FY11 results, which was in-line. Revenue at $615.3m, +17% yoy, while net profit at $330.7m, -51% yoy. Lower yoy profits was largely due to a fall in fall value gains to $115.9m, -75% yoy. Notwithstanding fair value gains, core net profit at $214.7m, +5% yoy.

Higher rev was due to improved sales recognition of trading property and higher rev from Pan Pacific Singapore hotel, partially offset by lower rental income. Sales of The Trizon residential project at $250.7m was higher by $84.6 million due to additional units sold and higher % of completion. Although office occupancy rates improved, gross rental income from investment properties dropped by $8.6m (4%) to $237.0m as new office leasing rates were still lower than the expired lease rates.

Share of associates' operating results decreased by $13.0m (24%) to $41.1m due mainly to the absence of $20.6m contribution from One Amber (fully sold and completed in Apr10), partially offset by higher contributions from Mandarin Oriental and Marina Mandarin.

Going forward, grp note that the increase in supply of office space amid the global economic uncertainty and expected slower growth in SG will likely impact market rentals for office space. The imposition of additional buyer’s stamp duties in Dec11 has also affected the purchase sentiment in the residential ppty mkt and retail rental market is expected to remain resilient with strong demand from international retailers and in those suburban malls. We note that at current price, grp trades at 0.56x P/B.

Kim Eng maintains Sell with $4.86 TP.