CapitaLand Limited - 2nd year of record Chinese sales
- 4Q16 numbers in line.
- Strong sales in China.
- Scaling up sales in Vietnam.
4Q16 results within expectations
- Capitaland's 4Q16 PATMI increased 73.8% YoY to S$430.5m mostly due to improved operating performance, higher fair value gains and reduced impairments over the quarter.
- Excluding gains from the change in use, we saw FY16 operating PATMI rise 27.8% YoY to S$834.8m mostly due to higher recognition of profits in China and improved contributions from CapitaGreen and the shopping mall portfolio.
- In terms of the topline, group revenues over the quarter improved 6.5% YoY to S$1,852.8m as we saw higher handover of home units sold in China and income from the group’s serviced residences business.
- Overall, we deem this set of results to be fairly healthy and broadly in line with expectations. The group also proposed a final dividend of 10.0 S-cents per share, versus 9.0 Scents in 2015.
Second consecutive year of record sales in China
- In China, the group sold a record of 10.7k units worth a total value of RMB18.1b which is up 14% and 17% in terms of units sold and value, respectively, and is a second record year of sales. Healthy sales were also seen in Singapore and Vietnam with 571 units and 1,480 units sold, respectively.
- Looking ahead to 2017, management reports that they have over 8k units which are launch ready in China and expect to hand over over 6k units, while they expect to continue to scale up their operations in Vietnam.
- Same-mall NPI growth across the group’s commercial malls portfolio appear stable with Singapore and Chinese malls clocking 1.4% and 3.2% in tenant sales growth (per sq ft/mth), respectively.
- We like the fact that the company has delivered a balanced set of results in an uncertain environment due to its diversified asset portfolio and robust recurring income streams and maintain our BUY rating with an unchanged fair value estimate of S$3.68.