UOL's 1Q09 core net profit of S$48m forms only 20% of our full-year forecast and 18% of consensus. 1Q09 revenue rose 22% yoy to S$197m on stronger presales and higher rents, partially offset by weak hotels. Presales and higher passing rents should lift operating performance in FY09. Hotels could further disappoint on shrinking global demand. We adjust our FY09-11 core EPS estimates by -9% to 12%. We also lower our cap-rate assumptions and capture a higher UOB target price in our model. Our end-CY09 RNAV estimate has been raised from S$3.02 to S$3.33. The stock trades at 0.6x CY09 P/BV and a 20% discount to RNAV, reflecting mid-cycle valuations. With hotels expected to remain depressed and further downside expected for office rents in 2010, we look for larger valuation discounts before accumulating the stock. Our target price, now pegged at a 30% discount to RNAV (50% previously) on lower risk aversion, has been raised from S$1.51 to S$2.33. Maintain Underperform.