Singapore Market: OCBC cuts UOL target to $5.17; keeps buy

OCBC Investment Research has lowered its target price on Singapore property firm UOL Group (UTOS.SI) to $5.17 from $5.48 but maintained its buy rating.

OCBC said it cut its target price on UOL as it had applied a heavier 25% discount to revised net asset value to reflect the heightened macro-economic risks.

OCBC expected UOL to launch its 577-unit development at Bedok Reservoir in Singapore later this month at indicative price levels of $1,100-$1,200 per square foot.

But given that Singapore’s CapitaLand (CATL.SI), Southeast Asia’s largest property developer, would likely launch its 583-unit Bedok Residences in the same window at similar price levels, OCBC said it was cautious about UOL’s pace of sales going forward.

However, UOL has a solid track record of accretive land acquisitions and navigating the property cycle well, OCBC said, adding that the management would be actively seeking land as the company’s land bank was almost depleted.

At 11:08 a.m., UOL shares were up 2% at $4.53. The stock has fallen nearly 5% so far this year. (The Edge Singapore)