Results better than expected, thanks to deferred income tax writeback following a 1% point reduction in corporate tax rate. Otherwise, earnings were largely in line. The 30% jump in topline to $195.8m came from higher rental, residential and IT operations. This helped fill the slack from hotel activities.

UIC earnings a reflection of Singland performance. The latter accounts for 80% of UIC’s total rental revenue. Billings from One Amber, Park Natura, Northwood and Grand Duchess lifted residential EBIT. This more than offset the decline from hotel operations, which were affected by economic slowdown. IT segment saw a 17% decline in EBIT to $1.9m.

Core earnings drivers to remain weak in the next 2 years. Continued pressure on office rents would likely erode the gap in rental reversions while hotel activities are likely to be dampened by the dip in tourist arrivals and reduced corporate travel. Absence of new launches in the past 6 months would mean little visibility from this earnings segment beyond the current locked-in presales.

Maintain HOLD, TP $1.10. UIC’s RNAV is raised to $1.30 after marking to market Singland’s share price. While having a more diversified earnings base, most divisions are likely to remain weak in coming years. The stock is currently trading at par with TP of $1.10, based on a 15% discount to asset backing.