GuocoLand

GuocoLand: delivered $186.1m (+478% y/y) profits in 4QFY14, bringing FY14 profits to $304.2m (+651% y/y). Core profit less one-off fair value gains for 4QFY14 rose 81.4% y/y to $62.6m and for FY14 multiplied 18x to $173.4m (vs FY13 $8.9m), impressive nonetheless. Revenue recognized was higher at $492.9m (+192% y/y) for 4QFY14 and $1.25b (+85%) for FY14 due to units sold in Goodwood Residence in Singapore and Seasons Park in Tianjin, China. GuocoLand derives 57.3% of its revenue from Singapore and 32.9% from China. The bulk of bottomline increase came from fair value gains in investment properties (4QFY14: $122.6m; 4QFY13L $0.6m and FY14: $122.6m; FY13: $32.3m) and gain on disposal of interests in subsidiaries and associates (FY14: $98.9m; FY13: $3.9m). Expenses were in check, as operating costs as %Rev is proportionately less in FY14. Despite its good earnings ability, balance sheet ratios may raise some concerns. Net gearing is as high as 1.46x as at Jun14 (Jun13: 1.60x) and quick ratio is only 0.43x (Jun13: 0.57x) giving it little cushion in times of short-term liquidity squeeze. With BVPS at $2.36, Guocoland trades at 11.4% discount to NAV and 7.9x trailing P/E.