Tuesday, July 30, 2013

CapitaLand : Focus on sustainability and growth (DBSV)

CapitaLand,
Buy S$3.22,
Focus on sustainability and growth
Price Target : 12-month S$ 4.36 (Prev S$ 4.44)

•2Q13 results dragged by lower portfolio gains and one-offs
•Strategy to generate recurrent income, capture niche in integrated projects
•Maintain Buy, TP S$4.36

Highlights
Dragged by lower portfolio gains and one-offs. Capitaland’s results were slightly below expectations. Revenue was 37% higher at S$1.18bn while PATMI was flat at S$383m due to a normalized GP margin of 27.9% (vs 39.5% last year), and after factoring in lower portfolio and revaluation gains and a S$28m one-off charge from repurchase of CBs. Stripping out these items, operating profits would have been S$108m, 20% higher than previously, to reach S$240m for 1H13.


Major residential and retail SBUs expanded. Operations-wise, Singapore, China and CMA reported higher EBIT y-o-y, derived from higher residential sales in Singapore, with recognition of profits from Bedok Residences, and billings from 1,353 homes in China. CMA continued to enjoy higher NPI as its malls ramped up operations amid higher tenant sales.

Our View
Targeting 8-12% long term ROE. Post the result, we expect 2H earnings to be better sequentially. Another key takeaway was the result of the strategic review its non-core investments. The group aspires to be a growth company underpinned by steady recurrent earnings, derived from 1/3 development and 2/3 ready assets and would focus on integrated projects in its core markets in Spore and China as part of strategy to deliver a target ROE of 8-12%. We see this as also a platform to generate a sustainable dividend level. On Australand, the company now becomes a key investment rather than a financial investment as earlier mentioned. We do not see this latest outcome as a major deviation from its long term growth strategies and expects the group to potentially reach these targets in the longer term. Balance sheet remains healthy with 0.45x gearing and gross cash hoard of S$5.2b.

More residential launches. The group plans to offer 2 projects in Spore in 2H – Bishan 2, targeting at a different segment than Sky Habitat as well as Marine Point while landed homes at Coronation Rd are likely to come onto the market in 2Q14. In China, it would recognize billings from another 1,900 homes. To extend earnings visibility, the planned launch of 1,400 units is scheduled to augment sales of 1,691 units in 1H. Danga Bay development in Msia would likely be marketed in 2014. CMA and Ascott could continue to focus on expanding income and portfolio through AEIs and newbuilds.

Recommendation
Maintain Buy. We are retaining our Buy call with TP of S$4.36, pegged to a 25% discount to RNAV. The stock is currently trading at a steep 26% below its TP. We believe that the share price gap to TP could close as the group continues to drive ROE improvements towards its long term objective.  


Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 26/07/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock