Singapore Land: 1H10 results in line with expectations. Topline surged by 53% yoy driven by recognition of property sales as well as improved hotel income. 1H10 net profit was $108.1m, reversing last yr’s loss of $271.6m…
SingLand’s hotel business has recovered, improving by 8% qoq, due to higher room rates and F&B revenue. On the back of strong tourist arrival numbers, we have raised our valuations of its hotels by an average of 26%, adding 29 cts/sh to the RNAV. We believe the hotel business will continue to pick up. SingLand will also continue to recognise profits from its residential projects, namely The Excellency in Chengdu and The Trizon in Singapore…
While income from SingLand’s investment properties was fairly stable qoq, it is still down 3% yoy, due to lower occupancy and rental rates. With the exception of SingLand Tower, the other office properties which are mainly Grade B are unlikely to see improvements in rents soon.
KE has a target of $6.92, pegged to 0.8x P/RNAV, vs last close at $6.80. Maintain HOLD.
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