Roxy-Pacific Holdings’s 2Q16 PATMI increased 57% YoY to S$20.6m mostly due to fair value gains on its Australian assets, higher contributions from its development segment and stronger share of associates and JV profits from Eon Shenton. In terms of the topline, 2Q16 revenues increased 5% YoY to S$98.4m as contributions from the property development and hotel ownership segment grew, but partially offset by a weaker numbers from the property investment segment.

We deem this quarter’s results to be broadly within expectations, and year-to-date PATMI now comprises 38% 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$363.3m which will be progressively recognized from 3Q16 to 2020.

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

Source: OCBC Research - 1 Aug 2016