Keppel Land's 1Q13 earnings will take a heavy pounding

Here's why the 72% decline isn't surprising.

According to Maybank Kim Eng, the expected huge dip is part of the volatility foreseen for the quarter and that the bigger story is how its China home sales have performed far better on an annual basis on the back of still-resilient demand from first-timers and upgraders.

Here's more from Maybank:

We expect KepLand to report a 72% decline in 1Q earnings on 17 April, but we reiterate that the volatility in quarterly earnings is to be expected. We maintain our BUY recommendation and target price of SGD4.78.

Rather than focusing on the headline numbers, we would instead focus on KepLand’s execution. In particular, its home sales in China have already improved by >80% YoY for the period of 2M13 and we expect demand from firsttimers and upgraders to persist.

The stock still trades cum-dividend until 23 April. A higher dividend for FY13 is still possible should MBFC Tower 3’s commitment level exceed 90% this year and subsequently divested.