Monday, 17 February 2014

CapitaMalls Asia

OCBC on 14 Feb 2014

CapitaMalls Asia (CMA) reported 4Q13 PATMI of S$216.4m, which increased 17.1% YoY mainly due to contributions from Star Vista, four new malls in Japan and progressive recognition from Bedok Residences. Adjusting for one-time items and fair value gains, FY13 core PATMI cumulates to S$240.1m, forming 104% of our FY13 forecast and we judge this to be mostly in line. The group announced a final dividend of 1.75 S-cents per share. Overall occupancy rate for CMA’s Chinese malls increased QOQ marginally to 97.3% from 97.2%. FY13 tenant sales increased 10.1% (excluding Tier 1 cities: 11.0%) while shopper traffic increased 2.2%. Maintain BUY. Our fair value estimate falls marginally to S$2.40 from S$2.55 previously due to weaker valuations of listed holdings.

4Q13 numbers within expectations
CapitaMalls Asia (CMA) reported 4Q13 PATMI of S$216.4m, which increased 17.1% YoY mainly due to contributions from Star Vista, four new malls in Japan and progressive recognition from Bedok Residences. Adjusting for one-time items and fair value gains, FY13 core PATMI cumulates to S$246.3m, forming 106% of our FY13 forecast and we judge this to be mostly in line. In terms of the topline, 4Q13 revenues came in at S$103.7m, down 8.7% YoY mainly due to lower leasing commission and project management fees from China. The group announced a final dividend of 1.75 S-cents per share.

Chinese mall data still healthy
Overall occupancy rate for CMA’s Chinese malls increased QOQ marginally to 97.3% from 97.2%. FY13 tenant sales increased 10.1% (excluding Tier 1 cities: 11.0%) while shopper traffic increased 2.2%. From an NPI yield on cost perspective, there were broad-based improvements across mall vintages in the range of 4.8%% to 18.4%. The group opened two malls in Chengdu over FY13: CapitaMall Meilicheng in Apr-13 and CapitaMall Jinniu (Phase 2) in Sep-13. Both are 98% and 93% committed and have achieved ~5% and ~7% yields, respectively. 

Two new malls opened in Singapore
In Singapore, overall committed occupancy rate remained firm at 99.3% as at end Dec 13. FY13 tenant sales were up 3.2% while shopper traffic increased 2.4%. Over the year, CMA opened Westgate, Bedok Mall and also announced a 49:51 JV with the Changi Airport Group to develop the S$1.47b Jewel project, which is anticipated to open by end FY18.

Maintain BUY
As at end Dec-13, CMA holds S$1.0b in cash with a relatively low net gearing of 22%. Including its facilities, the group has access to S$1.35b in funding, which is adequate for its projected funding needs of S$1.19b ahead. Maintain BUY. Our fair value estimate falls marginally to S$2.40 from S$2.55 previously due to weaker valuations of listed holdings.

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