TEE Land

TEE Land: 2QFY15 net profit rose 46% to $2.4m, while revenue soared five times to $15.12m due to higher progressive income recognized for Aura 83 compared to The Peak @ Cairnhill last year. Gross margin fell 18.4ppt to 25.4%, slowing down bottom line growth, as The Peak @ Cairnhill was a higher margin project. Meanwhile, admin expenses increased 75.5% to $2.4m due to higher staff costs, professional fees, depreciation and marketing expenses, of which the latter two were mainly incurred for the Malaysian development project. Share of associates profits rose 7% to $1.8m, as construction in development projects progressed. Management expects a gloomy year ahead, as it reckons property cooling measures in Singapore will not be lifted soon. Property sales in Malaysia have also slowed as Bank Negara tightens debt policies, amid cooling measures imposed by the government. Thailand’s private sector is recovering, boding well for the property market. The Australian and New Zealand markets are expected to be stable. TEE Land has declared an interim DPS of 0.44¢, and is currently trading at 0.8x P/B.