1Q13 earnings within expectations

ROXY reported 1Q13 PATMI of S$11.8m, which increased 31% YoY

mostly due to a stronger contribution from property development.

This forms 15% of our FY13 forecast (S$78.0m) and is judged to be

mostly within expectations, given that we expect a “lumpy”

contribution later in FY13 from Wis@Changi (COC recognition).

Revenue for the quarter came in at S$53.7m – up 41% YoY – again

mostly due to increased revenues from the property development,

partially offset by a 16% dip in Hotel revenues from enhancement

works. The group continues to sit on S$918.4m of progress billings

from sold projects, which would underpin earnings from 2Q13 to

FY17.

In the midst of major launches

The 171-unit Jade Residences was launched in Apr and 44% of the

units have been sold to date at ~S1.6k psf. All considered, we believe

this is a decent launch performance and would be keeping a close eye

on the pace of sales over the new couple of months. We also

understand that WhiteHaven at Pasir Panjang would be launching for

sales soon, with Sophia Mansions to follow.

1Q13 hotel average room rates down YOY

RevPar for the the hotel segment (Grand Mercure Roxy) decreased by

17% to S$155.1 in 1Q13 mostly due to a lower occupancy rate of

79.2% from enhancement works. However, we also note that 1Q13

room rates have fallen to S$195.9 versus S$201.5 in 1Q12 which,

taken together with other datapoints in the hotel sector from our

channel checks, could point to a muted RevPar outlook in FY13.

Maintain HOLD

We see the next two to three quarters to be particularly key ones for

ROXY as it executes on its first set of key launches (Jade Residences,

WhiteHaven, Sophia Mansions) after the Jan-13 cooling measures. At

this juncture, maintain

performance at new launches and the group’s land-banking ahead.

Our fair value estimate is unchanged at S$0.61.HOLD as we await more clarity on sales