Roxy-Pacific Holdings reported that its 1Q16 PATMI fell 79% YoY to S$9.9m mostly due to the absence of profit recognition from the TOP of Centropod@Changi in the corresponding period last year. There was a similar impact on the topline for the quarter as well, which fell 48% YoY to S$103.0m; this was partially offset by higher hotel revenues (up 7% YoY) due to contributions from the newly opened Noku Kyoto.

We deem this to be broadly within expectations, and year-to-date PATMI now comprises 13% of our full year forecast as we expect a back-loaded year in terms of revenue recognition ahead. The group currently sits on total pre-sale revenues of S$341.8m which will be progressively recognized from 2Q16 to 2020.

Maintain HOLD with an unchanged fair value estimate of S$0.52 per share.

Source: OCBC Research - 6 May 2016