Singapore Land: 2Q11 results inline.
Reported net profit was $273.3m, up 4.5x yoy, 5.5x qoq, largely due to revaluation gain.
Core net profit came in at $67.8m, +48% yoy, +39% qoq. Profit was boosted by new sales and higher recognition of The Trizon. 14 units were sold in 2Q11, raising take-up rate to 79%. As sales of the project are nearly completed, mgt could be focusing next on its 50%-owned acquired project in Bedok.
Riding the hospitality uptrend, revenue in Pan Pacific Singapore increased 4% yoy on the back of stronger occupancy and room rates. Though this was partially neutralised by negative office rental reversions. Echoing comments from the other office S-Reits which have been observing a slowdown in the office leasing momentum, mgt turned more cautious and is now guiding for a moderation in office rentals amid upcoming office supply.
Stock trades at 0.6x P/B, vs 2005-06 average of 1x.
CIMB maintains Outperform and TP $10.22, believes downside will be capped by its near-distress valuations, and mere net gearing of 6%.
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