Keppel Land

Keppel Land: 1Q12 results above consensus, though analysts less sanguine on outlook.
Core net profit came in at $142m, +26% qoq, +141% yoy, driven by development profit recognition under the deferred payment scheme (DPS) at Reflections and the completions of units at The Springdale in China. The fund mgt and invmt property operations continue to strengthen, rising 28% and 36% rptvly on higher contributions from K-Reit, improved occupancy, AUM and acq fees.

However 1Q sales trends remain slow, with Spore sales at 90 units (1% mkt sh) vs 60 units (2%) in 4Q11, led by the mass project Luxurie. KPLD has also set aside 150 units at the 1229-unit Reflections (75% sold) for corporate residences to get income stream, while preparing for the potential launch of Keppel Bay Plot 3 (367 units).
Meanwhile overseas home sales remains subdued with China selling ~190 units in 1Q12 vs 220 in 4Q11. Mgt has tempered its overseas launch plans, cutting its planned launches in China to ~4k units vs 6.65k units in 4Q.

MBFC Tower 3 (1.3m sf) has attained TOP, and is currently 67% committed, including recent tenant additions of Rio Tinto, Fitness First, and the Regus group. Potential divestment is tipped as a positive catalyst for the stock, as with the previous divestments of MBFC Towers 1-2 in 2010 and OFC in 2011.

Seeing divergent Street views.
BOA-ML maintains Underperform with TP $2.30, believes residential sales will remain weak as govt measures continue to affect sentiment.
Goldman maintains Sell, but lifts TP to $2.60 from $2.46, after raising FY12-14e EPS by 4-12% on DPS bookings and updated sales schedules.
Morgan Stanley maintains Equalweight, believes valuations is fair at a 23% discount to base case RNAV.
Deutsche maintains Buy, raises TP to $3.77 from $3.73, inline with upward revision of RNAV to $4.71 from $4.66, due to marking to market of K-Reit.