Target Price Cut 5% to SGD1.90; Maintain HOLD

• While GuocoLand's FY18 sales were in line with expectation, core EBIT was a miss on weaker profitability. Nonetheless, higher valuation for its investment properties led to a 7% improvement in net profit.
• We cut GuocoLand's FY19-20E EPS by 31/48% after pushing out the project completion timeline for its China projects. As such, our RNAV is lowered by 5% to SGD3.45. Our Target Price is cut to SGD1.90, based on an unchanged RNAV discount of 45%.
• While GuocoLand's valuations are not expensive, we believe the recently implemented policy tightening will continue to weigh on sector sentiment. Furthermore, with majority of its unsold stock in the prime region, it could be more impacted by the measures targeting property investors.
• Maintain HOLD.

Source: Maybank Kim Eng Research - 27 Aug 2018