UOL

UOL: 2Q13 results broadly in line with expectations. Net profit of $431.4m surged 151% yoy, mostly due to fair value gains at Novena Square, United Square, and Odeon Towers, where valuation cap rates have compressed some 25-50 bps. Excluding revaluation gains on invmt properties and negative goodwill, 1H13 core net profit was $164.4m (-7% yoy). Nomura reiterates Buy with TP $8.20. Notes the stock is trading at 0.78x P/B and a discount of 34% to its NAV estimate of $10.01. Valuation appears undemanding after the recent share price pull back. Tips corporate actions at UIC, Sing Land as well as plans for Marina Centre Holdings (unlisted), remain the largest driver of UOL’s share price. OCBC maintains Hold with TP $7.16. Operational updates: - The Bright Hill Drive project (445 units) is scheduled for launch in “a couple of weeks” while the St. Patrick’s Garden project (186 units) will be launched in “one to two months’ time”. The Sengkang West Way project (555 units), is scheduled for launch in 1Q14. - UOL’s retail devt in Katong, One KM, is now 65% precommitted, compared with 55% as of end-1Q13 and 50% as of end- FY12. Mgt is hopeful that the commitment could reach 75% by end-2013. The mall is on track to open by 2H14. - Sales at the residential component of The Esplanade in Tianjin remain brisk, with over 80% of the three launched blocks now sold, compared with 70% as of June and 59% at the start of 2013.