Buy CapitaLand for its diversity, Maybank-Kim Eng says. 3Q12 core net profit was up 85% on-year, boosted by divestment gains, which when removed, was in line with expectations, it says.
CapitaMalls Asia accounted for 31% of CapitaLand’s EBIT, mainly on higher contributions from four Japanese malls acquired earlier this year and on higher management fees, it notes; “We expect the retail property business via CMA to be a key growth driver for CapitaLand.”
It notes China home sales improved, while management doesn’t expect Singapore’s latest property-cooling measures to have a significant impact on new-home demand. Maybank-Kim Eng sees opportunities for CapitaLand to monetise some assets, particularly at the CMA level, such as the Queensbay Mall in Penang and ION Orchard in Singapore.
It raises its target to $4.21 from $4.14 on higher RNAV for CMA, a higher valuation for CapitaCommercial Trust and higher market values for other listed entities. It keeps a Buy call. The stock is up 0.3% at $3.28, for an around 48% year-to-date rise.
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