Revenue – AED1.4bn, +26% Y-o-Y, -26% Q-o-Q, -7% vs. EFGe Net income – AED727mn, -0.9% Y-o-Y, -2.7% Q-o-Q, -14% vs. EFGe Contracted sales – AED0.6bn     Aldar’s 4Q16 results were modest, albeit not worrying, with the lower-than-expected contracted sales figure for the quarter being the main disappointment (AED0.6bn in 4Q16; 2016: AED3.5bn, 2016e: AED4.05bn). Revenue from property development was strong, carrying decent GPM (4Q16: 40%, 2016: 44%). Revenue growth within the investment portfolio was modest (4Q16: +3.5%, 2016: +6.6), but GPM was robust at 80%+. Occupancy rates across Aldar’s residential and retail portfolio lost a few points sequentially, but continued to be strong, above the 90% mark. The board has proposed a DPS of AED0.11/share (EFGe: AED0.10), which implies a DY of 4.3%.   Main positives Strong growth in revenue from property development and sales segment, coming in at AED342mn in 4Q16 (+147% Y-o-Y, -65.1% Q-o-Q, with 3Q boosted with an AED900mn land transaction in Raha Beach). 2016 revenue from property was AED2.4bn (+135.2% Y-o-Y) indicating that construction across the company’s development portfolio is on track. Aldar has awarded AED3.0bn worth of construction contracts during the year Gross Profit Margin (GPM) on investment portfolio maintained above 80% mark, averaging 81% (4Q15: 79%, 3Q16: 81%) Recurring revenue net operating income of AED1.6bn, in line with management strategy and guidance for the year   Main negatives Weaker-than-expected contracted sales of cAED0.6bn in 4Q16, bringing the total for the year to cAED3.5bn (+17% Y-o-Y), short of our estimate of AED4.05bn. We estimate land sales in Shams Abu Dhabi and Raha Beach of AED1.4bn, out of the total development sales, in 2016. Management indicated that sales during the year were driven by Yas Acres (first two phases out of the three launched are sold out), Mayan and West Yas Occupancy rates for the investment portfolio showing further slight weakness in 4Q16, with Yas Mall occupancy rate at 94% (3Q16: 96%, 2Q16: 98%), residential portfolio: 92% (3Q16: 95%, 2Q16: 96%). Office was an exception, maintaining 95% in 4Q16, 3Q16 and 2Q16 Revenue missed our estimate by 6.7%, coming in at AED1.4bn (+25.5% Y-o-Y, -25.7% Q-o-Q). 2016 was AED6.3bn (+36.0% Y-o-Y) Modest growth in revenue from investment properties, +3.5% Y-o-Y and +1.9% Q-o-Q in 4Q16 and 6.6% Y-o-Y in 2016 Lower revenue from the hospitality and leisure segment, totaling AED175mn in 4Q16 (-18.2% Y-o-Y, +63.8% Q-o-Q) and AED540mn in 2016 (-14.9% Y-o-Y), on lower occupancy and room rates for hotels. Average occupancy rate across the hotel portfolio came in at 77% (79% in 2015); yet ahead of the market average rate of 73% Weaker blended gross profit margin, averaging 37.0% in 4Q16 (4Q15: 50.4%, 3Q16: 46.5%) mainly a result of no recognition of land sales during the quarter Fair value losses of AED65.0mn were reported in 4Q16 on investment portfolio, totaling AED170.0mn for the year. This is compared to fair value gains of AED567mn and AED487mn in 4Q15 and 2015, respectively   Net income missed our estimate by 14.3%, coming in at AED748mn (-0.9% Y-o-Y, -2.7% Q-o-Q). Net income in 2016 was AED2.8bn (+9.7% Y-o-Y). The main reason for the earnings miss is the fair value losses recorded (AED65.0mn) compared to our estimate of a gain of AED104mn   We will update our numbers following the release of the results. (Company disclosure, Mai Attia, Sara Boutros)   Aldar Properties (AD): AED2.57 as of 13 Feb. 2017, Rating: Buy, TP: AED3.37/share, MCap: USD5,506mn, ALDAR UH/ALDR.AD