Roxy’s 3Q15 PATMI increased 7% YoY to S$13.3m mainly due to increased contributions from the property development and investment property segments, partially offset by a poorer performance from the hotel segment. In terms of the topline, 3Q15 overall revenues rose 31% YoY to S$87.7m; this was largely attributed to higher property development revenues, which increased 40% YoY with progress recognition from Jade Residences, Whitehaven, LIV on Sophia, LIV on Wilkie and Sunnyvale, and higher office rental income due to contributions from 59 Goulburn St in Australia (which was acquired in Jul14). Revenues from the hotel ownership segment, however, decreased 7% YoY to S$11.6m in 3Q15 as REVPAR dipped YoY from S$174.2 to S$160.0.

Overall, we judge these results to be within expectations and 9M15 PATMI now constitutes 75% of our full year forecast. With a weak domestic housing outlook, the group is setting its sights on wider growth and we like that management is actively growing diversified recurring income by developing hotels across the region in Japan, Phuket and Perth. Maintain HOLD with an unchanged fair value estimate of S$0.52 per share.

Source: OCBC Research - 2 Nov 2015