UOL

UOL: Nomura says, 3Q11 results broadly in line.
Net profit fell 11% yoy to $101m, mainly due to lower contributions from associates and higher finance expenses. The share of profit of associates slumped 44% to $37m due to reduced contributions from Nassim Park Residences following the receipt of TOP in 1Q11.
Revenue rose 37% to $413.3m, boosted by higher progressive recognition from the sale of development properties and new contributions from the hospitality operations, such as PARKROYAL Serviced Suites Kuala Lumpur that commenced operations in 4Q10 and PARKROYAL Melbourne Airport that was acquired in April.

4Q11 should see continued profit recognition from Meadows at Peirce, Double Bay Residences, Spottiswoode Residences, Waterbank at Dakota as well as Terrene at the associates’ level.
In terms of launch plans, UOL is previewing its 50:50 JV project in Bedok Reservoir as well as the residential component of its Tianjin Hai He Hua Ding project soon. The Lion City redevelopment, on the other hand, will likely be launched only next year.

Balance sheet wise, UOL ended 3QFY11 with cash balance of $281.8m and a gearing of 0.38x.

Nomura maintains Buy with TP $5.59. Notes the stock trades at 37% discount to its RNAV estimate of $7.17/sh and FY12E P/B of 0.6x. Says UOL remains one of its top picks among
the SG developers, given its prudent land-banking strategy, low inventory risk and undemanding valuation.