2QFY10 results — For 2QFY10, Wing Tai reported net earnings of S$22.3m, down 52% qoq but up 7% yoy. 1HFY10 net profit amounted to S$68.65m, below both our (S$210m) and consensus (S$160m) estimates. Development projects that contributed included units sold at Belle Vue and progressive sales recognized from The Riverine.

Earnings revision — We have revised our FY10E estimate down to reflect the slower than expected contribution from Helios. We also assume there is no further sale at Helios for the rest of FY10 (We raise our FY11E-12E estimates). The revisions, however, have no significant impact on our RNAV or TP, as the profits are simply pushed back to FY11.

Expect a stronger 2HFY10 — Although associate income appears light in 1H10, we believe it could be higher in 2HFY10 with contributions from Ascentia Sky and The Floridian. Wing Tai has also just offered L’viv for preview, which should also start to contribute to its 2H earnings. We understand that approximately 40% of the 54 units launched were sold (Total: 147 units).

Project sales update — According to URA, as at end-Dec, Wing Tai has sold 162 units of Ascentia Sky (Total: 373units, launched: 180units), 103 units of Belle Vue Residences (total 176, launched 138) and 131 units of Floridian (total 336, launched 216.

Reiterate Buy — While we remain cautious on the sector, Wing Tai looks attractive on relative valuation within the sector, trading at a 29% discount to RNAV