$UOL GROUP LIMITED(U14.SI)$ Analysts from CGS-CIMB Research and OCBC Investment Research are remaining positive on UOL GROUP LIMITED after the group reported a 306% y-o-y surge in earnings of $371.0 million for the 1HFY2022 ended June.
Excluding fair value and other gains, core earnings or PATMI for the period grew 67% y-o-y to $181.1 million.
To the OCBC team, UOL Group’s residential portfolio in Singapore has shown resilience despite the Covid-19 break.
“Management is well known for its prudent land banking strategy. UOL also has a diversified investment properties portfolio with a strong presence in the commercial and hotel industries, thus allowing the group to generate recurring income streams, although near-term performance has been adversely impacted by the pandemic,” the team writes.
“Given UOL’s healthy balance sheet, it is able to embark on redevelopment projects and asset enhancement initiatives to rejuvenate its portfolio,” it adds.
The OCBC team has kept its “buy” call as the group’s 1HFY2022 results surpassed expectations. However, it has lowered its fair value estimate slightly to $8.52 from $8.56 previously after factoring in a lower fair value estimate for UOB, which is one of UOL’s investments in listed securities.
On the back of the healthy sales momentum for residential projects and seeing a firm recovery in the group’s hospitality assets, the team has raised its core PATMI estimates for the FY2022 and FY2023 by 6.8% and 7.0% respectively.
CGS-CIMB’s Lock Mun Yee has also retained her “add” call with an unchanged target price of $8.00 as the group’s 1HFY2022 results stood within her expectations at 54% of her FY2022 forecast.
Lock has also kept her earnings per share (EPS) estimates unchanged for the FY2022 to FY2024 post-results. Her revised net asset value (RNAV) per share is maintained at $13.34.
“We continue to like UOL for its diversified business model with a high proportion of recurring income," she says. To Lock, UOL's re-rating catalysts could come from a faster-than-projected recovery of its hotel operations, while slower-than-expected pace of residential sales are downside risks to the counter.
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