GLP reported that its 2QFY17 PATMI increased 52% to US$173m mainly due to increased contributions from the group’s fund management platform. Specifically, we understand that fund fees over the quarter rose 25% YoY to US$47m, comprising US$31m of asset and property management fees and US$16m of development fees.

On a core basis (adjusting for non-recurring items and revaluations), the group’s core earnings in 2QFY17 were 53% higher YoY at US$68m. In terms of the topline, GLP’s revenues over the quarter also increased 13% YoY to US$214m mostly because of the completion and stabilization of the group’s Chinese projects with higher rents, higher management fee income, and the appreciation of the JPY, partially offset by the weaker RMB and rent adjustments in China due to the transition of business tax to a VAT regime.

Overall, we judge this quarter’s performance to be broadly in line with expectations. Maintain BUY with an unchanged fair value estimate of S$2.37.

Source: OCBC Research - 8 Nov 2016