Metro

Metro: (S$0.91) Healthier operating metrics despite 3QFY16 net profit slip
Counter is up 5.7% in mid day trade despite reporting that its 3QFY16 net profit dropped 12.6% y/y to $55.9m mainly due to absence of gains from disposal of its 10.7% interest in Tesco Lifespace developments.

With the property segment now accounting for about 99% of its operating profit, current valuation of 0.53x P/B appear to be at a slight premium to other pure Chinese property plays such as Ying Li (0.37x) and Yanlord (0.5x).

That being said, the premium could be based on its same-day announcement of the acquisition of a 50% stake in a office development in the UK for £19m (including loan). This acquisition should help to provide for some geographical diversification in Metro’s property portfolio.