Performance came within expectation, but outlook seems better than expected. Pre-sales revenue as at 27 April 2009 stands at S$386m with only S$71m recognized thus far in 1Q09.

Revenue grew 62.8% YoY backed strongly by progressive recognition of sold units from S$23.4m to S$38.1m in 1Q09. Contribution from hotel segment declined within expectation by 15% YoY. We are convinced that our low forecast on Roxy’s hotel segment is on the right track, especially under current uncertain global epidemic condition of the H1N1 flu virus.

Overall operating expenses were well-contained and in line with our forecast. Roxy managed to reduce its finance cost due to lower bank borrowing on TOP of projects. Consequently, net profit grew 53.4% YoY to S$6.4m.

Base on latest update by Roxy, sales from Nova 48, Nova 88, The Lucent, The Florentine and The Ambra came in exceptionally well. According to our forecast, sales value psf were mostly highly above cost.

Though no forecast adjustment at this stage, we believe that upward revision is likely should property market stabilize in next few quarters. Our valuation on Roxy is on the conservative side but that said, our RNAV of S$0.51 with a 40% discount for illiquidity gives the stock a potential upside of 34.8%. We feel that Roxy is stable with strong growth prospect and reiterate BUY with target price of S$0.31.