However, overall operating expenses were better contained in 1Q10 as management implemented tighter cost controls including reduction of manpower. This resulted in a stronger operating profit margin of 9.2% on a QoQ basis (a loss in 4Q09), but still way below the higher 16.9% in 1Q09.
On a QoQ basis, we reckoned an improvement in Stamford Land’s property development and investment business segment. Operating profit from this business turned black as the 14 apartments unloaded at The Stamford Residences Auckland in 1Q10 helped lift some profit.
Given also much lesser deferred tax charge in 1Q10, Stamford Land managed to be profitable again in 1Q10 as compared to 4Q09, recognizing S$3.2m net profit VS a loss of S$6.8m in 4Q09.
1) Occupancy rate will continue to be under strong pressure;
2) ASP for The Stamford Residences Auckland (< 50% sold) will maintain only at near breakeven pricing in the shortterm;
3) Main contributing catalyst, The Stamford Residences & Reynell Terraces in Sydney (> 80% sold), will only be recognized in FY11 and FY12 upon completion;
Considering the above factors, we maintain our RNAV forecast of S$0.67. An illiquidity discount of 50% fixed our target price at S$0.34. Should liquidity of the stock be better, we believe that Stamford Land could potentially be a highly undervalued stock. Maintain HOLD with target price of S$0.34.
Sponsored Links
Comments
No response to “Stamford Land - 1Q10 results in line”
Post Comments (Atom)
Post a Comment |
Post a Comment