UOL’s full-year results beat expectations and its upcoming property launches are set for “robust demand,” OCBC said in a note on Wednesday.
The group’s core PATMI (profit after tax and minority interests), excluding fair value and other gains and losses, rose 10 percent in 2017 to S$355.9 million, beating OCBC’s forecast for S$314.8 million, the bank said.
It noted that UOL and UIC, which UOL has now consolidated, sold a combined 1,090 unites last year, with total sales value topping S$1.5 billion.
OCBC pointed to UOL’s planned launch of the Amber 45 project in April and the expected second-half launch of the Potong Pasir Avenue 1 site, which would likely be followed by the expected launch next year of the 92-128 Meyer Road site.
“We continue to like UOL for its healthy balance sheet and strong exposure to the Singapore residential market, which is in the nascent stage of recovery,” OCBC said, noting that management has also said it would be “selective and prudent” on replenishing its land bank.
Analysts in general have recently become concerned that developers may be bidding up land sales and en bloc sales to levels higher than might be profitable.
OCBC kept a Buy call on UOL and raised its fair value to S$10.63 from S$9.70 after switching analysts.