OUE

OUE: reported 3Q results which was below estimates. Net profit of $13.4m, -43% y/y on account of one-off cost items and decreased contributions on lower occupancies at 6 Shenton Way. Revenue rose 17% y/y to $119.1m on account of sales at Twin Peaks, and contributions from US Bank Tower. The company saw a 27% y/y rise in operating expenses from legal and professional fees due to the listing of OUE Hospitality Trust, upgrading works at hotels and $4.8m in losses from the sale of its two hotels in China. The group also revalued its properties, and took a S$73m gain on its US Bank Tower asset, while revaluing its OUE Bayfront building down by $72m, resulting in a net gain of $0.9m. Going forward, Management restated that it is exploring the establishment of OUE Commercial Trust, and plans to inject OUE Bayfront as part of the initial portfolio. Latest broker ratings as follows: Deutsche maintains Buy with $2.98 TP