Straits Trading (STC) reported a 1Q17 PATMI of S$21.9m, down marginally YoY versus the S$22.6m in the same previous period last year.

Profits from the real estate segment increased to S$19.2m from S$11.5m in 1Q16 mostly due to fair valuation gains from investment properties, partially offset by the absence of rental income from an office building in Australia divested in Nov 2016.

The group also recorded a net gain on divestment for a Australia hotel in 2016, without which the STC’s hospitality segment would have reported a lower PATMI of S$1.4m in 1Q17.

In terms of the topline, 1Q17 revenues dipped 5.0% to S$133.5m mainly due to weaker contributions from the tin mining segment. We deem this set of results to be broadly within expectations. Maintain BUY with an unchanged fair value estimate of S$2.73.

Source: OCBC Research - 16 May 2017