Keppel Land

Keppel Land: 2Q12 results inline to above expectations. Net profit was $94.7m, +88% yoy, with development profits as the key driver, accounting for ~70% of net profit, driven by recognition of devt profits at Reflections at Keppel bay, progressive completion at Marina Bay Suites and the Lakefront Residences and overseas completions in China. Domestic sales remained muted with 103 units sold in Singapore, primarily from the Luxurie. Overseas, sales in China improved to 491 units vs. 187 in 1Q while sales in Indonesia improved slightly to ~60 units vs. 40 in 1Q. Mgt further tempered its overseas launch plans, down from 5,171 units to 3,041 (2,433 in China and 608 units in other markets). Added that while construction has started on the showflat for Keppel Bay Plot 3, it is unlikely to launch the project in 2H12. With gearing low at 0.19x, capital recycling will be crucial for positioning the company for the next phase of growth. Deutsche maintains Buy with TP $3.81, says valuations are still attractive at 29% discount to RNAV. UOBK maintains Buy with TP $3.80. CIMB is Neutral with TP $3.43.