Friday, 8 February 2013

CapitaMalls Asia

OCBC on 8 Feb 2013

CapitaMalls Asia (CMA) reported 4Q12 PATMI of S$184.8m - decreasing 10% YoY mostly due to lower fair value gains from its properties in China and Singapore. This brings FY12 PATMI to S$546.0m, up 19.7%. Excluding revaluation and portfolio gains, FY12 PATMI adjusts to a core figure of S$175.7m, which we judge to be mostly in-line and only 3.2% below our FY12 forecast of S$181.5m. We continue to view CMA favorably and see its share price likely benefitting from dual tailwinds ahead: 1) increasing operational traction, as a larger component of CMA’s portfolio becomes operational, and 2) relatively firm retail outlooks in China and Singapore. Maintain BUY with an unchanged fair value estimate of S$2.55.

4Q12 results mostly in line
CapitaMalls Asia (CMA) reported 4Q12 PATMI of S$184.8m - decreasing 10% YoY mostly due to lower fair value gains from its properties in China and Singapore. This brings FY12 PATMI to S$546.0m, up 19.7%. Excluding revaluation and portfolio gains, FY12 PATMI adjusts to a core figure of S$175.7m, which we judge to be mostly in-line and only 3.2% below our FY12 forecast of S$181.5m. 4Q12 topline came in at S$113.6m, up 71% YoY due to the acquisition of Olinas Mall in Jul 12, additional stakes in three malls in Japan in Feb 12 and higher project and property management fees.

FY12 Chinese tenant sales up 9.8% YoY
CMA reports that, for its Chinese portfolio over the FY12 period, shopper traffic and tenant sales (per sqm) were up 7.0% and 9.8% YoY, respectively. (Excluding Tier 1 cities, FY12 tenant sales were up a healthy 13.2% YoY.) Similarly, FY12 same-store NPI for CMA’s Chinese malls were up 16.9% YoY. Singapore shopper traffic over the FY12 period was mostly flat (up only 0.1% YoY), while tenant sales were up 2.0% YoY. Same-store NPI in Singapore showed a 2.7% growth over FY12.

Execution tracking in line with expectations
In terms of execution in its greenfield pipeline, CMA opened seven malls in China over FY12, which tracked very closely to our expectations – we were looking for eight. In Singapore, the group opened Star Vista (91% committed) and JCube (99.6% committed). Two sets of asset enhancements were also completed in Singapore over the year: Bugis + (99.5% committed) and The Atrium@Orchard (95.3% committed).

Maintain BUY with S$2.55 fair value
We continue to view CMA favorably and see its share price likely benefitting from dual tailwinds ahead: 1) increasing operational traction, as a larger component of CMA’s portfolio becomes operational, and 2) relatively firm retail outlooks in China and Singapore. Maintain BUY with an unchanged fair value estimate of S$2.55.

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