UOL reported 3Q14 PATMI of S$102.6m, which increased 9.6% YoY mostly due to higher share of profits from JV and associates (UIC, SingLand, and the Archipelago and Thomson Three projects), partially offset by higher marketing expenses and pre-opening costs for Pan Pacific Hotel and Serviced Suites Tianjin. 3Q14 topline increased 65.6% YoY to S$433.5m as the Esplanade in Tianjin, China achieved TOP and hence full profit recognition over the quarter.

We judge 3Q14 results to be marginally above expectations, driven by stronger-than-anticipated profit margins from the Esplanade. In Sep 2014, the group also launched Seven Saint Patrick’s with a 67% take-up rate to date, and we understand the Upper Paya Lebar condominium project will likely be launched in 1Q15. In addition, the OneKM retail mall in Katong is expected to have its official opening on 30 Nov 2014. Maintain BUY; our fair value of S$6.95 is under review.

Source: OCBC Research - 12 Nov 2014