Thursday, July 25, 2013

CapitaMalls Asia : 1H13 in line (CS)

CapitaMalls Asia
Maintain OUTPERFORM
Price (23 Jul 13 , S$) 1.94
TP (prev. TP S$) 2.58 (2.58)
1H13 in line: PATMI up 62% with 70% of CH NAV operational, further boosted by ION, Star Vista

● 1H13 core profit of S$120.2 mn was in line at 49% of our FY13E, driven by: (1) higher contribution from nine malls opened in 2012; (2) contributions from 2012 acquisitions; (3) stronger contribution from REITs; and (4) profit recognised from Bedok Residences.


● China continues to deliver growth, underpinned by strong tenant sales of +9.5%YoY psm basis (same mall NPI +12.1%). Yield on cost for its operational malls was stable at 7.3% (FY12: 7.3%). SG saw +3.5% in tenant sales psm and +2.0% same-mall NPI growth led by ION's first lease cycle reversions.

● SG's Westgate and Bedok Mall are > 75% and > 90% pre-leased at average rents of S$15-16psf/month and S$18-19psf/month (on target). Meanwhile, China's Meilicheng opened with > 95% occupancy and Jinniu Ph2 to open in 3Q13 with ~80% pre-leasing. Tianfu's opening will be delayed to 2014.

● We have adjusted FY13-15 EPS estimates up by 3% to adjust for better earnings at ION and its CH portfolio, no change to S$2.86 RNAV and S$2.58 TP. CMA trades at a 32% discount to RNAV and at 1.09x P/B vs. 1.55x at IPO. Maintain OUTPERFORM.

1H13 core profit of S$120.2mn was in line at 49% of our FY13E, with growth driven by: (1) higher contribution from nine malls opened in 2012 (7 in CH, 2 in SG); (2) contributions from 2012 acquisitions including Japan, China's Minhang, Hongkou; (3) stronger contribution from its REITs; and (4) additional profit recognised for Bedok Residences.

China continues to deliver growth, underpinned by strong tenant sales of +9.5% YoY psm basis (same mall NPI +12.1%) despite the slower shopper traffic of +0.8% YoY (due to concerns of bird flu in 1H13). Yield on cost for its CH operational malls portfolio maintained at 7.3% (FY12: 7.3%) while profit momentum in CH continues to show an improving trend.

ION, Star Vista continue to drive Singapore business (ex-REITs): SG portfolio saw +4.2% in shopper traffic, +3.5% in tenant sales psm and +2.0% same-mall NPI growth led by ION's first lease cycle reversions (ION opened in 2009, first lease cycle 2012)—passing now average S$28-29psf/month. Separately, profit recognition at Bedok started in 2Q13.

Strong pre-leasing at soon-to-be opened malls: Singapore's Westgate and Bedok Mall, both completing in 4Q13, are > 75% and > 90% pre-leased at average rents of S$15-16psf/month and S$18- 19psf/month (on target), respectively. Meanwhile, China's Meilicheng opened on 28 April with > 95% occupancy (est. NPI yield of ~5% post Y1 operations) and Jinniu Ph2 to open in 3Q13 with ~80% pre-leasing. Tianfu's opening will be delayed to 2014 to allow the retailers to pace their expansion (also to pace the supply in the market).

Balance sheet remains healthy with 35% net debt/asset (look through). Management has a funding capacity of S$1.27 bn versus its commitments of S$1.19 bn (over 2.5 years). Assets have been revalued upwards as we saw some cap rate compression across its Singapore properties by 15-25 bp. However, management at the analyst briefing, said that its valuation range remains on the prudent end versus their comps. CH ranges 5.5-7% net cap rates, MY at 7-7.3%, JP at 5-8.1% and India at 10-11.5%.

Maintain OUTPERFORM: We have adjusted FY13-15 EPS estimates up by 3% to adjust for better earnings at ION and its CH portfolio, no change to S$2.86 RNAV and S$2.58 TP. CMA trades at a 32% discount to RNAV (historical average of 30%) and at 1.09x P/B, vs 1.55x at IPO. Key risk: Epidemics (e.g. bird flu) and competition risks.




Source/Extract/Excerpts/来源/转贴/摘录: Credit Suisse
Publish date: 24/07/13

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