UOL’s 3Q16 PATMI decreased 14% YoY to S$87.1m primarily because of lower gross profit margins and weaker contributions from joint venture companies, which dipped as the Archipelago and Thomson Three projects attained TOP in Sep 2015 and May 2016, respectively.

That said, overall group revenues for the quarter increased 11% YoY to S$393.4m as we saw broadly higher topline contributions across UOL’s property development, hotels and property investments segments.

In particular, property development revenues increased 19% YoY to S$206.6m due to higher progressive revenue recognition from Riverbank@Fernvale, Botanique at Bartley and Principal Garden.

The hotel segment similarly reported higher revenues, which increased 4% YoY to S$110.3m, due to stronger performance from Pan Pacific Tianjin, Parkroyal Penang and Parkroyal Paramatta.

We judge this quarter’s results to be broadly in line with expectations. Maintain BUY with an unchanged fair value estimate of S$7.30.

Source: OCBC Research - 11 Nov 2016