CMA’s 1Q13 PATMI came in at S$73.2m – up 9.6% YoY mostly due to contributions from Star Vista, four malls in Japan and Queensbay Mall, a S$6.6m gain from warehousing of two assets sold to CCDFII, better performance from CMT, ION Orchard and the China Funds, and a sale at The Orchard Residences. Excluding one-time items, we judge 1Q13 results to be somewhat above expectations. Given the H7N9 bird flu outbreak, shopper traffic for CMA’s Chinese malls showed a decrease of -0.9% YoY. On a same mall basis, however, tenant sales were up +15.9% YoY. We see worsening H7N9 fears potentially reducing retail traffic over the nearer term but a sustained long-term business impact, in our view, is unlikely. Maintain BUY with an unchanged fair value estimate of S$2.55.
1Q13 numbers above expectations
CMA’s 1Q13 PATMI came in at S$73.2m – up 9.6% YoY mostly due to contributions from Star Vista, four malls in Japan and Queensbay Mall, a S$6.6m gain from warehousing of two assets sold to CCDFII, better performance from CMT, ION Orchard and the China Funds, and a sale at The Orchard Residences. Excluding one-time items, we judge 1Q13 results to be somewhat above expectations. 1Q core PATMI, estimated at S$64.6m, now constitutes 34% of our FY13 core PATMI forecast. 1Q13 topline came in at S$91.5m which increased 29.1% YoY due to contributions from Star Vista and four malls in Japan and higher management fee revenue from new malls and improved performances.
Bird-flu unlikely to have long-term impact
Given the H7N9 bird flu outbreak, shopper traffic for CMA’s Chinese malls showed a decrease of -0.9% YoY. On a same mall basis, however, total tenant sales were up +15.9% YoY (up 8.3% on a per sqm basis). We see worsening H7N9 fears potentially reducing retail traffic over the nearer term but a sustained long-term business impact, in our view, is unlikely. NPI performance in its Chinese malls continue to show improvement, with a 15.2% YoY increase in same-mall NPI seen in 1Q13. CapitaMall Meilicheng in Chengdu began operations on 28 Apr 2013 and is 90% leased with an expected NPI yield of 5% after its first year of operations.
Singapore portfolio showing stable growth
Singapore malls in the pipeline, Westgate (>50% committed) and Bedok Mall (>70% committed), remain on track for completion in 4Q13. Singapore same mall NPI also increased 1.3% YoY, while tenant sales per sqm and shopper traffic increased 3.6% and 3.7%, respectively.
Maintain BUY
We favor CMA for its sharp execution and retail property exposure in China and Singapore which continue to enjoy firm long-term fundamentals. Maintain BUY with an unchanged fair value estimate of S$2.55.
CMA’s 1Q13 PATMI came in at S$73.2m – up 9.6% YoY mostly due to contributions from Star Vista, four malls in Japan and Queensbay Mall, a S$6.6m gain from warehousing of two assets sold to CCDFII, better performance from CMT, ION Orchard and the China Funds, and a sale at The Orchard Residences. Excluding one-time items, we judge 1Q13 results to be somewhat above expectations. 1Q core PATMI, estimated at S$64.6m, now constitutes 34% of our FY13 core PATMI forecast. 1Q13 topline came in at S$91.5m which increased 29.1% YoY due to contributions from Star Vista and four malls in Japan and higher management fee revenue from new malls and improved performances.
Bird-flu unlikely to have long-term impact
Given the H7N9 bird flu outbreak, shopper traffic for CMA’s Chinese malls showed a decrease of -0.9% YoY. On a same mall basis, however, total tenant sales were up +15.9% YoY (up 8.3% on a per sqm basis). We see worsening H7N9 fears potentially reducing retail traffic over the nearer term but a sustained long-term business impact, in our view, is unlikely. NPI performance in its Chinese malls continue to show improvement, with a 15.2% YoY increase in same-mall NPI seen in 1Q13. CapitaMall Meilicheng in Chengdu began operations on 28 Apr 2013 and is 90% leased with an expected NPI yield of 5% after its first year of operations.
Singapore portfolio showing stable growth
Singapore malls in the pipeline, Westgate (>50% committed) and Bedok Mall (>70% committed), remain on track for completion in 4Q13. Singapore same mall NPI also increased 1.3% YoY, while tenant sales per sqm and shopper traffic increased 3.6% and 3.7%, respectively.
Maintain BUY
We favor CMA for its sharp execution and retail property exposure in China and Singapore which continue to enjoy firm long-term fundamentals. Maintain BUY with an unchanged fair value estimate of S$2.55.
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