1Q17 PATMI increased 77.2% YoY to S$386.8m mainly due to a divestment gain from the sale of The Nassim, higher handovers from development projects in China and higher portfolio gains, partially offset by lower revaluation gains from investment properties.

In terms of the topline, 1Q17 revenues increased 0.4% YoY to S$897.5m as the group saw more handovers from its development projects in China and stronger rental contributions from newly acquired investment projects. After accounting for one time gains, we deem this set of results to be broadly within expectations.

In China, the group sold 2,062 units in 1Q17, which declined versus 3,377 units in 1Q16, as there were less units available for sale over the quarter.

Management also indicated that they have secured pre-leases for more than 90% of the retail components of their Raffles City projects in Changning, Hangzhou and Shenzhen in China, which are slated to open in 2017.

Maintain BUY with our fair value estimate of S$3.93 under review.

Source: OCBC Research - 26 Apr 2017