Why KepLand's sales nightmare won't be over anytime soon

Slow development sales in Singapore, China to persist.

According to CIMB, there were no surprises in KepLand’s results – 1Q14 core EPS was 24% of its full-year forecast and consensus. Development sales in China and Singapore were soft in the quarter. Given the weak outlook for the physical market in China and Singapore, CIMB thinks the slow development sales will persist forKepLand in FY14.

Here's more:

China sales
KepLand sold 570 units in China in 1Q14, below the 850 units sold in 1Q13. The higher value products on offer in the quarter resulted in lower volumes. Lower-cost township launches remain a key sales driver, with Central Park City achieving higher ASPs of Rmb8.2k psm vs. Rmb7.4k psm achieved in earlier phases. Suburban projects made up 62% of total sales volume in China in 1Q14.

Overall, 1Q was a slow quarter for KepLand’s China division, in line with the slowing contracted sales disclosed by its Hong Kong listed peers.

Singapore sales
Singapore sales remained weak. KepLand sold 54 units in 1Q14, slightly lower than 1Q13’s 59 units. In all fairness, the low volume was partly due to the lack of new launches by KepLand as the overall physical market remained very soft.

Associate income fell 20% yoy as a high value project in Marina Bay Suites (87% sold) was completed last year, boosting year-ago earnings. Highline Residences (500 units) at Tiong Bahru will be ready for launch in 2Q14

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