CapitaLand - Maybank Kim Eng 2018-07-06: Small Exposure To SG Residential

SGinvestors.io

CAPITALAND LIMITED SGX: C31

CapitaLand - Small Exposure To Sg Residential

Maintain BUY; Target Price SGD3.80

• We cut Target Price to SGD3.80, based on a revised RNAV discount of 30% (from 25%). With a small exposure to Singapore’s residential market, our RNAV and EPS revisions are small at 0.2% and 2% respectively.
• CapitaLand’s current valuation is attractive at just 0.67x P/BV and steep RNAV discount of 45% after the recent sell down.
• Maintain BUY.

Cutting ASP assumptions

• With a 5-10% increase in ABSD for property investors, we expect developers to lower ASPs to stimulate demand. Nonetheless, its exposure to Singapore’s residential market is small as most of its previously launched projects have been sold.
• We cut ASP for the redevelopment of Pearl Bank Apartments by 10% to SGD2,150 psf.

Sector Report:

• Singapore Property Sector : Back To Tightening Mode ~ Let The Dust Settle; Downgrade To NEUTRAL 

Other Property Developer Stocks:

• Bukit Sembawang - Most Exposed To Singapore’s Residential Market

• Ho Bee Land (HOBEE) - Diversification Pays Off

• UOL Group Ltd - Oversold

• City Developments - Policy Overhang

• Oxley Holdings - Highly Exposed To Residential Headwinds

• GuocoLand - Limited Upside

Derrick Heng CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2018-07-06

SGX Stock Analyst Report BUY Maintain BUY 3.80 Down 4.100