4Q14/FY14  results  in  line.  Keppel  Land  recorded  4Q14/FY14  core PATMI  of  SGD224.3m/SGD532.2m  (-11.5%/-4.1%  YoY),  driven  mainly by  divestment  gains  and  development  profits.  In  FY14,  it  divested  its stakes  in  Marina  Bay  Financial  Centre  Tower  3,  Equity  Plaza  and  two data  centres  in  Singapore,  as  well  as  its  overseas  projects  -  Elita Garden Vista in Kolkata, India, Al Mada Towers in Jeddah, Saudi Arabia, and  BG  Junction,  its  shopping  mall  in  Surabaya,  Indonesia,  unlocking SGD1bn net proceeds and lowering its net gearing to 20% (3Q14: 37%)

Highline  Residences  and  The  Glades  are  30%  and  34%  sold respectively.  Keppel Land sold about 304  residential units in Singapore (FY13: ~370 units), of which about half were from Highline Residences. Outside  Singapore,  the  company  sold  about  2,100  residential  units,  of which  about  1,900  units  were  in  China,  mostly from  Central  Park  City, The  Botanica,  Stamford  City  and  The  Springdale.  Buyer  sentiment improved after the mortgage rule relaxation and rate cut.  In Vietnam, the group saw steady home sales with about 160 units sold, mainly from The Estella and Riviera Point. The new foreign property ownership rule which will take effect from 1 July 2015 is expected to boost the market.

Our  view.  Trading  in  Keppel  Land  shares  has  been  halted,  with  the market shrouded by privatisation chatter, which we estimate  could  cost Keppel Corp (KEP  SP,  BUY, TP: SGD11.30)  SGD3.4bn-4.2bn, pegged to FY14 NTA and RNAV,  if it goes  through.  In  FY15, we expect Keppel Land to maintain its focus on growing its operations in Singapore, China, Indonesia  and  Vietnam.  The  mortgage  relaxation  for  second-home buyers (downpayment down to 30%  from 60%) and  the  lower mortgage rate  of  a  5-10%  discount to  the  5.6%  benchmark rate  in  China  should help  sustain  demand.  At  0.58x  P/RNAV,  we  maintain  that  the  stock's valuation  is  undemanding.  Reiterate  BUY  with  a  RNAV-derived  TP  of SGD4.05.

Source: OSK-DMG