2Q’s strong 68% sequential growth was due mainly to property development (60% of earnings) where pre-tax profit jumped 74% QoQ. The Arte, 98% sold in 2Q09, was at an advanced 30-55% completion stage. Hotel pre-tax profit also improved 41% QoQ while pre-tax of rental properties (mainly office) fell 17% QoQ.
Market has improved again over the past seven weeks, during which it sold almost as much as it did in 1H09 to bring YTD sales to 1,031 sold, amounting to about S$1.34 bn. In 2H09, it plans to launch 400 units in three projects, across low, mid and high end.
We raise our FY09-11 EPS forecasts by 33-50%, as we raise selling prices to reflect market conditions. We have also adjusted office and hotel values to reflect improving sentiments. Raise RNAV to S$9.82 (from S$8.13), and with strong momentum likely to continue, we peg a 10% premium to derive its target price of S$10.80.
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