FPL’s 3QFY18 core PATMI of S$157m (-13% YoY) came in above estimates, due to faster-than-expected recognition of development profits in Singapore.

Net gearing improved 6%pts QoQ but remains high at 89% and suggests that more properties are likely to be injected into its listed S-REITs.

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On the residential front, volumes jumped 35% QoQ to 897 units.

The recurring-income segments posted a mixed performance this quarter, with Singapore office seeing negative reversions and Hospitality SBU posting a 2nd quarter of net loss but solid occupancies in its Singapore retail and Australia investment properties.

FPL has fallen 18.3% YTD, underperforming both Developers (-8.3%) and FSSTI (-2.2%) despite having a relatively benign exposure to the Singapore residential sector.

Valuations remain undemanding at RNAV discount of 41% and P/B of 0.69x, compared to average of 26% discount and 0.76x for developers.

FPL’s …