UOL Group Ltd

Buys site adjacent to landbank.

announced more land acquisition. This time it is an adjacent site to one which

it already owns at Spottiswoode Park Road off Keppel Road. This much larger

site has been acquired at a higher price of S$132m, however as the previous

site was bought at a lower cost, the amalgamation of both sites is positive to

UOL. We estimate that the amalgamation would also improve efficiency of the

site and hence increase the net saleable area and hence lower overall

breakeven. We estimate the breakeven of the combined sites to be about

S$1000psf and assuming a selling price of say S$1500psf, a pretax of S$140m

is possible. This in turn would have positive 11-cent accretion to our RNAV

which we now revise up to S$5.48.UOL Group Limited (UOL) recently

Other developments.

development. This involves UOL taking up a 50% stake in a subsidiary of

Kheng Leong Co Pte Ltd (KLC). KLC is owned by the Wee family, who is also

a substantial shareholder of UOL. It is difficult to read the intentions of the

Wee family or the purpose of the investments by UOL. However, a closer

working relationship between the 2 companies is a strong possibility. This

could be in the form of a JV in development projects that either one currently

owns or a JV for acquisition of new projects. A third possibility is for UOL to

eventually acquire KLC from the Wee family.Over the past month there has also been another

Downgrade on valuation.

very well rising from S$4.90 to the current trading range of S$5.60, or a rise of

over 14% within a month. More importantly it has risen past our previous fair

value of S$5.37 and currently stands close to our revised fair value of S$5.48.

As for ratings, even though we continue to like UOL for its mid-end residential

exposure as well as its exposure to the commercial sector, we see limited

upside from current levels. We thus downgrade our rating on UOL from BUY toSince our last report dated 14 May, UOL has done

HOLD.

Downgrade on valuation

SINGAPORE Company Update

Winston Liew

(65) 6531 9819

e-mail: wliew@ocbc-research.com

15 June 2007

Downgrade to

HOLD

Previous Rating: BUY

S$5.60

Fair Value: S$5.48

Stock Code:

Reuters: UTOS.SI

Bloomberg: UOL SP

Event: Update

General Data

Issued Capital (m) 796

Mkt Cap (S$m/US$m) 4,455 / 2,888

Major Shareholder Wee Family

(34.0%)

Free Float (%) 61.0

NTA per share (S$) 3.95

Daily Vol 3-mth (?000) 2,357

52Wk High (S$) 5.800

52Wk Low (S$) 2.630