Keppel Land

Keppel Land announced 3Q13 which was at the top end of estimates. Revenue and net profit surge 151% and 70% to $417.9m and $126.4m respectively. The strong results was on back of stronger contributions from property trading, with more project completions in China and progressive recognition from Singapore projects, as well as increased contribution from property investment and fund managemen In 3Q13, KepLand sold 1,130 units in China valued at Rmb1.5b, up from the 290 units valued at Rmb328m y/y. YTD, sales trebled to 3,070 units, mainly from projects such as The Botanica Ph7 in Chengdu and Ph2/3 of The Springdale in Shanghai. KepLand has a potential launch pipeline of a further 1,117 units for 4Q13, and early indications suggest that demand remains healthy. In Singapore, KepLand launched 200 units at The Glades at Tanah Merah (total 726 units) in Sep and sold 89 of them, achieving a median price of $1,518 psf, in line with expectations. Sales at its associate project, Corals at Keppel Bay, stood at ~43% (out of 366 units) with an ASP of $2,200 psf. KepLand is targeting to launch its 500-unit Tiong Bahru site by 1Q14, which is expected to be priced at ~$1,750 psf. Going forward, KepLand is in the process of divesting its 51% stake in Jakarta Garden City, which will return net proceeds of $240m and result in a divestment gain of $152m when the sale is completed by 4Q13. While MBFC Tower 3’s occupancy rate remain little changed at 91%, believe it still remains a likely candidate for capital recycling in FY14, particularly if more attractive investment opportunities come along. That, will be a catalyst for further re-rating, especially with the prospect of more generous dividends. At 0.6x P/RNAV, Maybank-KE maintains that KepLand’s valuations are undemanding. Maintain Buy with $4.80 TP. Latest broker ratings as follows: Credit Suisse maintains Neutral with $4.24 TP Deutsche maintains Buy with $4.27 TP HSBC maintains O/w with $4.90 TP OCBC maintains Buy with $4.09 TP