|Bid||3.45 x 0|
|Ask||3.46 x 0|
|Day's range||3.4500 - 3.5100|
|52-week range||2.9800 - 3.8000|
|Beta (3Y monthly)||0.94|
|PE ratio (TTM)||10.15|
|Earnings date||11 Feb 2019 - 15 Feb 2019|
|Forward dividend & yield||0.12 (3.59%)|
|1y target est||4.07|
SINGAPORE (Feb 21): CGS-CIMB Research, DBS Vickers Securities and OCBC Investment Research are maintaining “buy” on CapitaLand with the respective price targets of $3.56, $3.62 and $3.98, after the group posted 71.2% higher earnings of $476 million for the 4Q ended Dec 2018.In a Wednesday report, CGS-CIMB analyst Lock Mun Yee says she continues to like the stock for its robust residential sell-through rate in China, the management’s active capital recycling, and its proposed acquisition of Ascendas-Singbridge to create Asia’s largest diversified real estate group. Despite cutting FY19-20F earnings after tweaking residential margins and tax rate assumptions, especially in China, Lock’s revised target price is one cent higher than previously upon accounting for CapitaLand’s latest balance sheet metrics.“As [CapitaLand’s] net debt-to-equity ratio is still healthy at 0.56 times, we anticipate the group to continue recycling and deploying capital into new investments… [The proposed acquisition of Ascendas-Singbridge] would strengthen the group’s presence in its core markets as well as provide it the scale to venture into new sectors such as logistics and business parks. This would enable to enable it to tap new growth opportunities in the medium-term,” comments Lock.DBS analyst Derek Tan foresees CapitaLand’s FY20 PATMI hitting a decade-high given its strong income visibility, with more than RMB15.7 billion ($3.2 billion) in presales to be recognised from FY19 onwards.Tan is also positive on the upcoming local residential launches of Pearl Bank Apartment and Sengkang Central in 2019.Even with cooling measures expected to put a dent on potential investor demand, he believes Pearl Bank Apartment’s unique attributes, coupled with its prime location closed to the central business district (CBD), may attract buyers if it is priced well.“We estimate a breakeven of S$2,200-2,300 psf. In addition, the launch of a mixed-use development in Sengkang Central (50%-50% JV with CDL) will offer an additional 700 units of residential land bank for the group in Singapore,” says the analyst.OCBC’s slightly higher fair value estimate of $3.98, compared to $3.96 previously, comes even as the latest set of results fell slightly short of expectations.“If we exclude the gain from the sale of Nassim in 1Q17, FY18 PATMI would instead have grown 13.8% [instead of falling 5.9% to $872.2 million, which formed 94.4% of FY18 forecasts],” says OCBC analyst Andy Wong in a Thursday report.He also highlights how real estate assets under management (AUM) have crossed the $100 billion mark during the latest year under review, which is earlier than targeted.“CapitaLand's real estate AUM rose 12% to S$100.1b, as at end-2018, surpassing its target to hit S$100b by 2020. Although headwinds remain in China, CapitaLand continues to hold an optimistic view on the outlook of the residential market, especially on Tier-1 and selected Tier-2 cities. Back home, CapitaLand remains open to land bank replenishment opportunities, but only if the price is right,” notes Wong.As at 3.13pm, shares in CapitaLand are trading 6 cents higher at $3.49 or 0.75 times FY19F book value, according to CGS-CIMB estimates.
The growth in revenue was attributed to a higher handover of units from residential projects in China and Vietnam compared to the previous year, and rental revenue from newly acquired and operational properties in China, Germany and the US. Residential projects which contributed to revenue this quarter were Vermont Hills in Beijing, New Horizon in Shanghai and Century Park East in Chengdu, Sky Habitat and The Interlace in Singapore.
SINGAPORE (Feb 1): The manager of CapitaLand Retail China Trust (CRCT) announced a distribution per unit (DPU) of 2.42 cents for the 4Q18 ended December, 2.1% higher than DPU of 2.37 cents a year ago. This brings full-year DPU for FY18 to 10.22 cents, 1.2% higher than DPU of 10.10 cents in FY17. Distributable amount to unitholders grew 7.7% in 4Q18 to $23.7 million, compared to $22.0 million a year ago. During the quarter, CRCT saw the addition of $2.5 million in distributable income contribution from joint ventures, due to its newly acquired 51% interest in Rock Square. Gross revenue rose 3% to $55.7 million in 4Q18, from $54.1 million a year ago. The increase was mainly due to stronger rental growth from the multi-tenanted malls. In addition, CapitaMall Wuhu received a one-off compensation during the quarter, following the exit of its anchor tenant Total property operating expenses fell 5.9% to $19.9 million in 4Q18, from $21.1 million a year ago. This was mainly due to the lower operating expenses in CapitaMall Wuhu, following its closure. Consequently, net property income (NPI) grew 8.8% to $35.9 million in 4Q18, from $33.0 million a year ago. Portfolio occupancy as at Dec 31, 2018, was 97.5% and rental reversion was 10.9%. As at end December, cash and cash equivalents stood at $173.9 million. “China’s more moderate pace of growth is reflective of an economy undergoing transition and its long-term fundamentals remain positive. We are confident that CRCT’s quality family-oriented shopping malls will continue to benefit from China’s growing middle class and policies implemented to stimulate the economy,” says Soh Kim Soon, chairman of the manager. According to Soh, China’s retail sales rose 9% year-on-year to RMB38.1 trillion ($7.7 trillion) in 2018, on the back of a 7.8% rise in urban disposable income and a 6.8% increase in expenditure per capita. The manager of CRCT on Friday also announced it has entered into a bundle deal in Hohhot, the capital of China’s Inner Mongolia province. The deal will see CRCT acquire a new mall in Yuquan District at an agreed property value of RMB808.3 million, and transfer its entire interest in a company that holds CapitaMall Saihan to a party related to the vendor of the new mall at an agreed property value of RMB460.0 million. CRCT intends to finance the acquisition through a combination of existing cash and debt, as well as use all the proceeds from the divestment to partially finance the acquisition. “To further optimise our portfolio, we have entered into a bundle deal in Hohhot with unrelated third parties to divest CapitaMall Saihan and acquire a new mall that is double in size and has a longer balance tenure. Given the new mall’s higher growth potential, CRCT will be in an even stronger position to tap Hohhot’s promising retail growth,” says Tan Tze Wooi, CEO of the manager. CRCT targets to take over the new mall in 2H19 and open the mall in 2H20. The eight-storey mall in Yuquan District has a gross floor area, excluding car park, of 76,309 sq m. Part of a mixed-use development that also includes residential, SOHO and office components, the mall is strategically located within a well-established commercial hub. “Compared with CapitaMall Saihan, the new mall will feature a larger proportion and greater variety of new concepts that will create leasing synergies with the rest of our multi-tenanted malls and enhance CRCT portfolio’s tenant diversification,” says Tan. “Supported by CRCT’s strong financial position, we will continue to explore suitable acquisition opportunities to grow and rejuvenate our portfolio,” he adds. Units of CRCT closed 4 cents higher, or up 2.7%, at $1.50 on Thursday.
SINGAPORE (Jan 25): RHB Research is maintaining a “neutral” call on CapitaLand Commercial Trust (CCT) with a target price of $1.86. CCT yesterday announced that its 4Q18 DPU has increased by 6.7% to 2.22 cents from 2.08 cents in 4Q17. FY18 DPU was just 0.5% higher at 8.70 cents from 8.66 cents in FY17. Gross revenue came in at $99.0 million, a 14.8% increase from $86.3 million last year, mainly due to contributions from Asia Square Tower 2 (AST2) and Gallileo. Net property income came in at $79.3 million, 16.6% higher than $68.0 million a year ago. See: CapitaLand Commercial Trust posts 6.7% increase in 4Q DPU to 2.22 cents Based on CBRE preliminary data, Grade-A office rents rose 15% y-o-y in 2018 to $10.80 psf. In a Friday report, analyst Vijay Nararajan says, “With limited Grade-A supply in the pipeline (c.1.1m sqft), we expect Grade-A rents to rise 5-10% in 2019. The favourable outlook would benefit CCT which has about 15% of leases (as % of rental income) due for renewal this year. With average expiring rents of these leases already 4% below current market rents, we expect a healthy positive reversion of 5-15% for 2019.” CCT’s management said that it is considering refurbishing 21 Collyer Quay (21CQ), with a view of re-leasing the entire space. CCT plans for the refurbishment works to achieve a minimum downtime. Currently, HSBC is the sole tenant of the building and has extended its lease until April 2020. “With office rental expected on an uptrend until 2021, we believe such a move will be favourable to unit holders,” says Natarajan. Meanwhile, leasing works are commencing at CapitaSpring, as construction works are on track to complete by 1H21. As of now, JP Morgan signed up to be the anchor tenant for office space taking up c.24% of the NLA. Management plans to open a show suite on the site and commence leasing for the remaining space. “We see more upside to its targeted yield on cost of 5% if the office rental momentum continues,” adds Natarajan. As for mergers and acquisitions, CCT’s management says that it prefers gateway cities in Germany for its sound fundamentals, but it is unlikely that overseas assets will exceed 20% of its portfolio. The analyst also reckons that the trust may exercise its call option to acquire the remaining 55% stake in CapitaSpring closer to its completion. “Despite a positive outlook, a 1.0 times FY19 P/B valuation and FY19 yield of 5.0% are not compelling in our view so we would recommend investors to buy on dips,” says Natarajan. As at 4.05pm, units in CCT are trading at 2.16% higher at $1.89.
SINGAPORE (Jan 24): The manager of CapitaLand Mall Trust (CMT) on Wednesday announced that its 4Q18 DPU has risen by 3.1% y-o-y to 2.99 cents, bringing FY18 DPU to 11.50 cents, 3.0% higher y-o-y. This came on the back of 4.7% y-o-y increase in gross revenue to $180.5 million and a 4.3% y-o-y increase in net property income to $124.4 million. Following the results announcement, DBS Group Research is maintaining its “buy” call on CMT with a target price of $2.44.
SINGAPORE (Jan 24): The manager of CapitaLand Commercial Trust (CCT) announced 4Q18 DPU increased 6.7% to 2.22 cents from 2.08 cents in 4Q17. This brings FY18 DPU to 8.70 cents, just 0.5% more than 8.66 cents in FY17. Distributable income for the quarter was 10.7% higher at $83.1 million, from $75.0 million in the previous year, due to higher net property income as well as the distribution of S$3.9 million tax-exempt income from dividends paid by its subsidiaries that own AST2 and Gallileo. Gross revenue came in at $99.0 million, a 14.8% increase from $86.3 million last year, mainly due to contributions from Asia Square Tower 2 (AST2) and Gallileo, acquired on Nov 1, 2017 and June 18, 2018 respectively. But this was offset by the divestments of One George Street, Golden Shoe Car Park and Wilkie Edge in 2017, and Twenty Anson on Aug 29, 2018. Property operating expenses was 7.7% higher y-o-y at $19.8 million, bringing net property income for 4Q18 to $79.3 million, 16.6% higher than $68.0 million a year ago. Share of profit (net of tax) of joint venture jumped 67.3% to $26.0 million from $15.6 million in the previous year. During the quarter, the trust registered a net increase in fair value of investment property of $19.0 million, compared to a net decrease of $24.4 million in the same period last year. Soo Kok Leng, chairman of the manager, says, “During the year, we diversified CCT’s growth engines geographically with a strategic acquisition in Frankfurt, Germany. We will continue to explore investment opportunities in select gateway cities of developed markets, while strengthening CCT’s market leadership in its home base.” Kevin Chee, CEO of the manager, says, “Looking ahead, we will strive to maintain robust portfolio occupancy and retain tenants while committing rents above market levels. In addition, we will pursue investment and value creation opportunities in Singapore and Germany, where 95% and 5% of CCT’s assets are currently located respectively. On the longer horizon, CCT’s growth pipeline includes the call option for the remaining 55% of CapitaSpring’s commercial component not owned by CCT. The call option is exercisable within five years after the development’s temporary occupation permit is obtained, which is expected in 1H21.” Units in CCT last traded at $1.83 on Wednesday.
SINGAPORE (Jan 23): The manager of CapitaLand Mall Trust (CMT) announced that its 4Q18 DPU has increased by 3.1% to 2.99 cents, compared to 2.90 cents in 4Q17. This brings the DPU for FY18 to 11.50 cents, 3.0% higher than 11.16 cents in FY17. Distributable income to unitholders was 5.1% higher in 4Q18 at $108.1 million from $102.9 million last year. Gross revenue for the quarter came in at $180.5 million, 4.7% higher than $172.4 million a year ago, with higher contribution from the trust’s gross rental income and other income, but partially offset by lower car park income. This increase in revenue was mainly attributable the acquisition of Infinity Mall Trust (IMT), completed on Nov 1, 2018. IMT is now a subsidiary of CMT and its results are consolidated at CMT Group. The increase was also due to higher other income as well as higher gross rental income from IMM and Bedok Mall. The increase was partially offset by lower gross revenue from Sembawang Shopping Centre which was divested on June 18, 2018 and lower occupancy for JCube, Lot One Shoppers’ Mall and Clarke Quay. Property operating expenses increased by 5.4% y-o-y to $56.0 million, bringing net property income of 4Q18 to $124.4 million, 4.3% higher than $119.3 million in the previous year. Finance costs was 3.3% higher y-o-y at $27.0 million, mainly due to interest on IMT’s bank borrowings which was consolidated at CMT Group after the acquisition and term loans drawn down to part finance the acquisition. But partially offset by repayment of bank borrowing in Jan 2018 and refinancing of EMTN of US$400 million in Mar 2018 at lower interest rates. The loans were partially repaid with net proceeds from divestment of Sembawang Shopping Centre in June 2018 and MTN issuances at lower interest rates in FY18. During the quarter, the trust spent $8.98 million in costs associated with acquisition of subsidiary, which was absent last year. However, CMT saw a 54.6% y-o-y increase in share of results (net of tax) of joint ventures to $16.7 million. Adj Professor Richard R Magnus, chairman of the manager, says, “Cognisant of the challenges ahead – which include slowdown in the global and Singapore economies, uncertainty in the interest rate environment and competition from the completion of new shopping malls – we remain vigilant and will continually explore new ways to differentiate our malls from the competition and increase customer engagement.” Units in CMT last traded 1 cent higher at $2.27 on Tuesday.
On Jan 14, CapitaLand announced that it is acquiring all the shares in two wholly-owned intermediate subsidiaries of Ascendas-Singbridge (ASB), which is in turn a subsidiary of Temasek. The acquisition, valued at $11 billion, will make CapitaLand the largest diversified real estate group in Asia.
SINGAPORE (Jan 15): CapitaLand on Monday announced it is acquiring all the shares in two subsidiaries of Ascendas-Singbridge (ASB) from Temasek for $11 billion to create the largest diversified property group in Asia. Analysts are maintaining a positive view on this transaction, with DBS Group Research calling a “buy” on CapitaLand with a target price of $3.62. The widening of CapitaLand’s scope to include more “new economy” real estate sectors in the business parks and sectors could make the overall group more “future proof” as it navigates through the new world.