Kim Eng on 14 Feb 2014
What’s New
CMA’s core 4Q13 PATMI came in strongly at SGD60.9m (+54.4% YoY, -6.5% QoQ), thanks to contributions from The Star Vista, Olinas Mall and Bedok Residences, offset by higher-than-expected
taxation. Robust same-mall NPI growth rates were registered for its malls, in particular in China (+13.1% YoY) and Malaysia (+8.7% YoY). This was underpinned by healthy tenants’ sales growth and high committed occupancy rates.
What’s Our View
Despite concerns over slowing consumption growth in China and competition from e-commerce, CMA’s China malls continued to enjoy tenants’ sales growth of 10.1% in FY13 (11.0% if excluding Tier 1 cities). Management attributed this to shoppers’ growing familiarity with its tenants and its regular refinement of trade mix. The two China malls expected to open in 4Q14 are Tianfu Mall and
CapitaMall SKY+ in Baiyun, Guangzhou. Management is eyeing initial yields of 4-5% for both malls, which will underpin its earnings growth in FY15. CMA’s balance sheet remains strong with SGD1.0b in cash and a net gearing of 0.22x. This provides ample headroom for opportunistic acquisitions.
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