CAPITALAND LIMITED
C31.SI
CapitaLand (CAPL SP) - Strong China home sales the highlight
Maintain BUY and SGD3.71 TP
- CapitaLand reported 4Q15 results that were inline.
- We reiterate our view that the group is likely to achieve its ROE target in 2017 on the back of recognition of pre-sold homes and fair value gains on the completion of key Raffles City projects.
- We retain our BUY rating and RNAV-based TP of SGD3.71 pending full model update.
- Our RNAV of SGD4.77 incorporates TPs for its listed REITs and market value for units not covered.
FY15 inline; ROE 6.1%
- CapitaLand’s FY15 net income of SGD1,066m is broadly inline at 95% of our SGD1,118m estimate.
- We attribute the slight variance to impairments and provisions made in 4Q15.
- The company achieved ROE of 6.1% for the year and maintained its 9.0 SGD cts DPS.
Singapore: Residential headwinds persist
- Residential sales in Singapore remained sluggish with 244 homes worth SGD559m (FY14: 278 homes worth SGD561m) sold.
- Management continues to look out for headwinds from property-cooling measures.
- For its malls in Singapore, we also noticed further weakness at Star Vista that led to a 9.8% decline in valuation to SGD276m from Jun 2015.
- CL Singapore took project-specific impairment of SGD110m for the year.
China: Strong home sales momentum
- The surge in China residential sales was a key highlight with a record 9,402 homes worth CNY15.2b sold in the year (FY14: 4,961 homes worth CNY7.6b).
- Going forward, management aims to maintain current sales level with government policies remaining favourable.
- We believe the targeted completion of over 9,000 homes will drive earnings in the year ahead.
- CL China took an impairment charge of SGD71m for continued weakness at Tianjin.
- There was slight weakness in the Raffles City Portfolio with RC Beijing and RC Ningbo reporting 1.2% and 1.5% decline in NPI respectively for FY15.
Derrick Heng CFA
Maybank Kim Eng
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http://www.maybank-ke.com.sg/
2016-02-18
Maybank Kim Eng
SGX Stock
Analyst Report
3.71
Same
3.71
