Ho Bee

Ho Bee: 2Q13 earnings declined 64% y/y to $26.2m while revenue tumbled 95.8% to $6.1m. The deteoriation was mainly due to lower revenue recognition in property development (-98%) after the group recorded a full recognition of its Orange Grove project, as well as the completion of One Pemimpin in 2Q12. The sale of Hotel Windsor was completed in May 2013, where a net gain of $25.9m was recognized and the revaluation reserve amounting to $94.7m was transferred to unappropriated profit upon completion. Total gain on the sale of the hotel was $120.6m. Revenue from property investment segment was flat at $2.8m, similar to its hotel segment that contributed $2.7m after achieving 86% occupancy for 2Q. In its pipeline, the recent acquisition of Rose Court in London (end-May) was scheduled for completion by end of Jun, which will contribute a full quarter in its next results. In addition, The Metropolis at One North in Singapore is on track for completion in Oct and 82% of the 1.08m sf net lettable commercial space has been pre-committed. Ho Bee has a healthy gearing of 0.24x and currently trades at 0.8x P/B.