2Q17 PATMI increased 59% YoY to S$109.4m mainly due to higher recognition from Principal Garden, higher share of profits from associated companies and fair value gains on investment properties.

In particular, we note that UOL booked S$9.2m in fair value gains over the latest quarter (mostly from Novena Square and United Square) versus S$21.5m of impairment losses in the same period last year.

In terms of the topline, 2Q17 revenues increased 10% YoY to S$399.1m as contributions from property development rose 19% YoY to S$221.2m. Contributions from the hospitality segment were mostly flat YoY at S$105.6m versus S$106.2m in 2Q16.

We deem this set of results to be above expectations and excluding non-core items, 2H17 PATMI now constitutes 69% of our full year forecast.

Maintain BUY with our fair value estimate of S$8.63 under review.

Source: OCBC Research - 7 Aug 2017