UOL

UOL: It’s residential project in Singapore, Botanique@Bartley, which was launched in Apr 15, has acheieved 40% take up rate to date. Management sees positive interest in this project given its good product proposition, located near an MRT station and having attractive pricing compared with other projects that launched recently.

UOL’s strategy of avoiding high-end and EC land tendered in recent times has proven to be collect as the luxury market in SG has slowed while there is a supple glut in EC segment. The company is reaching landbank replenishment levels though and said it will focus on mid-end land tenders.

Hospitality segment remains challenging in China due to austerity measures. Nonetheless, UOL expects to see improvement in its Suzhou and Xiamen hotels, akthough there has been a dip in RevPar.
Under retail segment, OneKM Mall, which was opened in Nov 14, has an occupancy rate of 95% as at May 15. The mall needs >1 year to stabilise.

UOL will launch Changfeng, in Shanghai, in 2H2015. China’s property market is improving due to easing of government policies and low I/R. For Malaysia, management is concerned about the oversupply issues I the Iskandar region and thus do not have plans to expand in Malaysia at the moment.

UOL’s net gearing has been hovering at 0.25-0.4x and overall debt maturity is 2 years with a financing costs of ~2%. The house maintains a BUY rating with TP $8.22.