United Overseas Land

[winston]

not vested

UOL Group Limited or UOL ($6.77, down 0.02) reported a 26% increase in net attributable profit excluding a one-off gain in FY17 to $433.7 million for the year ended 31 December 2018 (FY18).

Including the one-off gain, net attributable profit declined 51% due mainly to the $535.6 million gain recognised upon the consolidation of the United Industrial Corporation group (UIC) in FY17.

The performance was in line with expectations.

Group revenue rose 13% to $2.4 billion in FY18 due mainly to the full year consolidation of revenue of the expanded group.

Revenue from property development fell 15% to $989.3 million mainly from the completion of Alex Residences and Principal Garden, in September 2017 and December 2018 respectively.

The revenue decline was partially off set by Amber45, which was launched in May 2018, and higher revenue from The Clement Canopy as well as Park Eleven in Shanghai.

Revenue from property investments increased 60% to $541.0 million following the consolidation of UIC’s investment properties and 120 Holborn Island.

Hotel ownership and operations, including those of UIC’s hotels, was up 29% to $678.7 million, while revenue from management services and technologies climbed 163% to $140.1 million mostly from the technology arm of UIC.

The increases arose mainly from full year consolidation of revenue for FY18 compared to four months for FY17.

Dividend income grew 62% to $48.2 million with higher dividends from United Overseas Bank Limited in FY18. Group pre-tax profi t before fair value and other gains/(losses) rose 18% to $595.2 million, due mainly to higher profits from property investments and hotel operations with the full year contributions from the consolidation of UIC and higher dividend income.

Gross profi t margin improved from 34% to 41%, supported by higher revenue from property investments and lower revenue from property development, where the former commands higher profit margins compared to the latter.

Share of profit from associated and joint venture companies declined 95% to $5.6 million as UIC and the common associated and joint venture companies with UIC were no longer equity accounted but were consolidated with those of the Group from September 2017.

Group expenses rose 23% to $425.5 million. Marketing and distribution expenses were down four per cent to $93.0 million due to lower sales commissions incurred.

Administrative expenses increased 24% to $123.2 million and other operating expenses were up 52% to $168.7 million, reflecting full year consolidation of expenses for FY18 compared to four months in FY17.

Finance expenses edged up seven per cent to $40.6 million.

UOL Group Chief Executive Liam Wee Sin said: “With the property cooling measures imposed last year, land prices will moderate and en bloc sales will have very limited traction. However, projects with land price advantage, strong product differentation and in locations with limited
supply, will see healthy take-up.

Singapore office rents are expected to appreciate further amid a tight supply. With the Group’s broadened office portfolio in the CBD, we are positioned to ride the continued wave of growth in the office market.

In line with our diversification strategy, we have acquired investment properties overseas to further strengthen our recurrent income stream and will continue to deploy our capital overseas.

The challenges that we face in the market are muli-faceted. Going forward, with the consolidation of UIC, we will play to our strengths of scale for office portfolio, strong execution for our residential projects, a shift towards experiential appeal for our retail malls and expansion of our hospitality footprint.”

UOL said that growth in tourist arrivals is expected to benefit the hospitality sector in Asia Pacific, except in China and Myanmar where trading conditions are expected to remain challenging.

Retail rents in Singapore look set to stabilise although the pressures from a tight labour market and e-commerce persist. While the property market in London continues to be weighed down by uncertainties over Brexit, the office rental market in Midtown is expected to hold up.

As at 31 December 2018, shareholders’ funds increased to $9.65 billion from $9.45 billion
at the end of 2017. Net tangible asset per ordinary share rose to $11.30 from $11.01.

Group gearing ratio increased to 0.28 from 0.21 due mainly to higher borrowings for the acquisitions of the Silat Avenue site in Singapore and 72 Christie Street in Sydney.

We maintain BUY on UOL given its undemanding 0.6x price to book, 2.6% dividend yield, and 17% upside to consensus target price of $7.90/share.

Source: Lim & Tan

[winston]

not vested

BUY (Upgrade from Hold)
Last Traded Price ( 15 Apr 2019): S$7.36 (STI : 3,325.86)
Price Target 12-mth: S$8.53 (16% upside) (Prev S$7.15)

What’s New

UOL’s 50% owned UIC gains 100% control of Marina Square via acquisition of 25% stake in MCH and AHPL for a total consideration of S$675m

Timely acquisition for UOL / UIC as the biggest beneficiary riding on the government’s plan to
rejuvenate the central business district (CBD)

Price implies 1.2x P/NAV and half of RNAV

Upgrade to BUY; raised TP to S$8.53

Source: DBS

https://researchwise.dbsvresearch.com/R ... VyaWRAQA==

[winston]

not vested

UOL Group: Class shall prevail

UOL reported its 1Q19 results which met our expectations.

We estimate that core PATMI rose 26.6% YoY to S$104.3m. The Tre Ver has seen strong sales momentum in recent months, with the project now 75% sold. We believe this can be attributed to The Tre Ver’s good specifications and competitive pricing.

With UOL and UIC now having full control of Marina Centre Holdings which owns Marina Square Shopping Mall and the Marina Square hotels (Pan Pacific Singapore, Marina Mandarin Singapore and the Mandarin Oriental, Singapore), we see increased flexibility for UOL to value add to this portfolio of assets, including taking advantage of the Strategic Development Incentive from the 2019 Draft Master Plan.

While a better alignment of interests and potential intensification of plot ratio are positives, management highlighted that development charges/premiums are at high levels, and a detailed feasibility study needs to be carried out first.

After adjustments, our RNAV-derived fair value increases from S$8.45 to S$8.50. Maintain BUY.

Source: OCBC

[winston]

not vested

UOL posts 5% decrease in 1Q earnings to $72.4 mil

By Samantha Chiew

Revenue increased 12% to $741.2 million from $663.7 million a year ago, mainly due to recognition of property development revenue sales at Park Eleven, Shanghai.

Revenue from property investments was up 4% to $139.2 million, due to ramped-up occupancy of UIC Building and maiden contribution from 72 Christie Street in Sydney, which was acquired in Dec 2018.

Hotel ownership and operations declined by 6% to $163.4 million, mainly from the closure of Pan Pacific Orchard for redevelopment, and lower revenue from the Group’s hotels in Australia.

Gross profit margin for 1Q19 increased to 42% from 37% la year ago.

As at end March, the group’s cash and cash equivalents stood at $715.6 million.

Source: The Edge

https://www.theedgesingapore.com/uol-po ... 401b309bc7

[winston]

not vested

What’s New

1Q19 net profit (ex-accounting reversal) up 27% y-o-y, led by settlement of residential properties in China

Tre Ver is now 73% sold, from 40% in Feb-19

Marina Centre opens up opportunity to be hotel operator, and has redevelopment potential

Maintain BUY; S$8.53 TP

Source: DBS

https://researchwise.dbsvresearch.com/R ... =eeibckhab

[behappyalways]

UOL posts 5% decrease in 1Q earnings to $72.4 mil
https://www.theedgesingapore.com/uol-po ... gs-724-mil

[winston]

BRIEF-UOL Group Posts 2Q19 Net Attributable Profit S$195.4 Mln

Aug 8 (Reuters) - UOL Group Ltd :

* GROUP REVENUE IN Q2 DECLINED 20% TO S$512.3 MILLION
* 2Q19 NET ATTRIBUTABLE PROFIT UP 48% TO S$195.4 MILLION
* EXPECTS PRICES FOR NEW PRIVATE HOMES TO REMAIN RELATIVELY STABLE DESPITE ECONOMIC SLOWDOWN IN SINGAPORE

Source: Reuters

[behappyalways]

UOL posts 48% increase in 2Q earnings to $195 mil on higher fair value gains
https://www.theedgesingapore.com/capita ... alue-gains

[winston]

not vested

Buoyed by fair value gains

1H19 earnings improved on higher FV gains; net profit (ex-FV gains) fell marginally

Ongoing projects had 75% take-up; Avenue South Residences expected to launch end-Aug19

Marina Mandarin transitioning to PARKROYAL brand

Maintain BUY; TP S$8.53

Source: DBS

https://researchwise.dbsvresearch.com/R ... =ehbgbkhfj

[winston]

not vested

UOL Group: The future looks exciting

UOL reported its 2Q19 results which met our expectations, with core PATMI declining slightly by 1.0% YoY to S$91.7m.

Following a portfolio revaluation exercise, UOL recorded fair value gains of S$181.9m in 2Q19.

This was driven largely by UIC’s office portfolio, which saw a compression in cap rates by 25 bps.

Operationally, UOL’s retail portfolio saw a high committed occupancy of 97%.

Rental reversions for UOL’s retail portfolio grew 5-6%, while office was marginally positive.

For its hotels segment, RevPAR was flat YoY as corporate demand saw some weakness.

Following UOL’s full-control of MCH (including UIC stake), the group has actively engaged the authorities on potentially undertaking a rejuvenation of the assets as part of the Strategic Development Incentive from the 2019 Draft Master Plan.

While an approval is likely still some distance away, we believe the longer-term prospects look exciting.

We maintain our BUY rating and S$8.50 fair value on UOL.

Source: OCBC