UOL GROUP LIMITED
U14.SI
UOL Group - Deep Value Play
- 1Q17 net profit was in line with estimates.
- Commercial and hotel portfolio offers stability.
- More launches of recently acquired sites in 2018.
- Raised TP to S$8.73 on narrower 20% discount to RNAV.
Valuations still attractive.
- We maintain our BUY rating on UOL Group (UOL) as it is trading at an attractive valuation of c.0.7x P/NAV, which is at the lower end of its historical range.
- The successful launches of recently purchased land sites in the enbloc market will be re-rating catalysts for the stock. We have lifted our TP to S$8.73 based on a narrower 20% discount to RNAV of S$10.90.
1Q17 results stable.
- UOL reported a 4% rise in earnings to S$80.3m, in line with expectations.
- Management believes the Singapore property market has stabilized, and UOL has been more aggressive in landbanking than the other large cap developers.
- Key positives from the results were:
- revenue growth from all divisions, and
- stable portfolio occupancy rates.
- The group has recently acquired more landbank, offering longer term income visibility.
Most aggressive in landbanking in Singapore; bulk of new launches in 2018.
- There was good interest The Clement Canopy (1Q17; 505 units), which was officially launched in 1Q17. Management expects to launch Raintree Garden, Amber Road and Bishopsgate in 2018.
Valuation
- Maintain BUY on attractive valuations. We raised our TP to S$8.73, pegged to a 20% discount to our RNAV of S$10.90, taking into account new properties acquired.
Key Risks to Our View
- Economic slowdown. The downside risk to our projections is if residential sales are slower than our projections or if commercial properties and hotels operations are impacted by slower-than-projected growth in rental/room rates.
Rachel TAN
DBS Vickers
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Derek TAN
DBS Vickers
|
http://www.dbsvickers.com/
2017-05-15
DBS Vickers
SGX Stock
Analyst Report
8.73
Up
7.640
