- Keppel Land Ltd (Keppel Land) reported a 77% YoY jump in net pro't to S$237mil for 1HFY12. It was mainly attributable to lumpy recognition of a residential project under deferred payment scheme'Re'ections at Keppel Bay (Re'ections). Other projects such as Marina Bay Suites (MBS) in Singapore, The Springdale (Shanghai), The Botanica (Chengdu) and Central Park City (Wuxi) in China also added to the bottomline.

- Results were above expectations meeting 63% of both our FY12F forecast (exclude corporate restructuring surplus) and consensus estimates. We underestimated the sales rate for MBS and have revised it upwards to 80% for FY12F.

- Keppel Land sold over 190 units in Singapore for 1HFY12, 19% higher YoY. Bulk of sales came from The Luxurie with 64% take'up rate at an average selling price (ASP) of S$1,048 psf, in line with our ASP assumption.

- Commendably, 16 units in MBS were sold at an ASP of S$2,703 psf, 4% above the previous sale in 4QFY11. We think that as Marina Bay Financial Centre (MBFC) near completion, it attracted investment demand from investors searching for rental yields. As for Re'ections, take'up rate inched up 1% QoQ to 76% with ASP down marginally over 1% at S$1,834 psf. An architect Daniel Libeskind has been engaged to design Keppel Bay Plot 3 with a show'at under construction. We believe Keppel Land is targeting to launch this project in 2HFY12F. Our ASP assumption are S$2,100 psf, 15% premium over the older Re'ections.

- During 1HFY12, 680 residential units were sold in China, 70% higher YoY. We noted that sales mainly came from lower'tier cities such as Chengdu and Wuxi. In Indonesia, 100 units of Jakarta Garden City were sold at an ASP of $107psf, 37% higher than phase 1.

- Leasing momentum for MBFC Tower 3 continue nabated, up 3% QoQ to a pre'leased rate of 70%. In ddition, Keppel Land's management had guided that oom rates for Sedona Hotel Yangon had doubled to S$150 per room night and it continues to seek development opportunities in Myanmar.

- Our RNAV estimate stand at S$3.80/share. Pricing it at arity, we obtain a fair value of S$3.80/share. Share price as moved up 49% YTD and we believe that all the positives have been priced in. We maintain our HOLD rating.

Source: AmFraser