UOL

UOL: positive read through from FY12 results Despite the 42% decline in revenue at $1.15b, net profit jumped 19% to $807.7m, on the back of total revaluation gains of $549.6m, supporting the view that UOL’s book values are considerably understated. NTA is up 16% yoy to $7.94. CIMB believes UOL’s Novena and United Square properties remain undervalued, particularly with the $1,600 psf GLS land tender for a nearby white site in Dec ’12. Occupancy remains high, with strong rental reversions seen in the retail segments in FY12. The lower revenue was bcs several of the group’s residential projects were completed in FY11. Devt sales in FY12 were very strong with 938 units sold at over $1b in value. Unsold residential units now account for only 6% of its gross asset value (GAV). With a more active mgt, improved trading liquidity and a strong balance sheet, CIMB believes UOL is now a much more investable stock. At 33% discount to RNAV and 0.8x P/B, believes UOL offers more attractive exposure to the Singapore commercial/ hotel sectors compared to the S-REITs (1- 1.4x P/B) and its developer peers (15-20% RNAV). Meanwhile the potential to consolidate the UIC/ SingLand structure should give investors a longer term option value. CIMB reiterates Outperform, on higher TP of $7.76 (from $6.55).