UIC

UIC: 3Q13 net profit rose 8% y/y to $43.4m, mainly because of lower selling and distribution costs, as well as higher contributions from the Archipelago residential property project, in which UIC owns a 50 per cent stake. However, topline declined 16% y/y to $152.4m, mainly from lower sales recognition from The Trizon and The Excellency (Chengdu), partially offset by sales of the V on Shenton residential project as well as higher income from the Pan Pacific hotel (reopened Sep ’12). Higher contribution from the 50% owned Archipelago residential property project increased share of results of joint ventures by 232% to $4.8m. Management highlighted that, overall demand for office space is still largely confined to small and medium sized firms, despite encouraging pre-commitment of office space. The management also expects market retail rent to remain healthy while it cautions challenging pricing strategy amid new supply of rooms and slower visitor growth. NAV at end Sep rose to $3.54, which translates to P/B of 0.86x.