CapitaLand (CAPL) reported 1Q14 PATMI of S$182.8m, down 1.7% YoY mostly due to the absence of a one-time S$58.7m divestment gain in 1Q13. 1Q14 PATMI now constitutes 20.8% of our full year forecast and we judge 1Q performance to be mostly in line with expectations. An anemic 34 residential units were sold in Singapore over 1Q14, down significantly YoY from the 544 units sold in 1Q13, due to continued headwinds in the domestic housing segment and a lack of new launches over the quarter. We expect the run-rate to pick up ahead, however, as the group pushes to sell remaining inventory by adjusting prices at slower projects. Management reports that newly operational assets, Raffles City Chengdu and Raffles City Ningbo, are gaining good traction. The retail components for both assets are already 98% and 92% committed, respectively, with tenant sales and shopper traffic showing firm double-digits YoY growth. Maintain BUY with an unchanged FV estimate of S$3.79.
1Q14 figures mostly within expectations
CapitaLand (CAPL) reported 1Q14 PATMI of S$182.8m, down 1.7% YoY mostly due to the absence of a one-time S$58.7m divestment gain in 1Q13. 1Q14 PATMI now constitutes 20.8% of our full year forecast and we judge 1Q performance to be broadly in line with expectations. In terms of the topline, 1Q14 revenues fell 3.4% YoY to S$612.6m as we saw lower contributions from Singapore development projects, partially offset by stronger development revenues in China and Vietnam, and higher rental income from investment assets.
Focused on marketing domestic residential inventory
An anemic 34 residential units were sold in Singapore over 1Q14, down significantly YoY from the 544 units sold in 1Q13, due to continued headwinds in the domestic housing segment and a lack of new launches over the quarter. We expect the run-rate to pick up ahead, however, as the group pushes to sell remaining inventory by adjusting prices at slower projects. Already, we have seen 106 units sold in Apr-14, mostly in Sky Habitat, as prices were lowered by an additional 10% to 15% versus initial launch levels. Over in China, total residential sales in 1Q14 fell 48% YoY to 1.2k units though we also expect the rate of sales to increase ahead as the group looks to launch about 8k units over the remainder of FY14.
Maintain BUY with unchanged S$3.79 FV
Management reports that newly operational assets, Raffles City Chengdu and Raffles City Ningbo, are gaining good traction. The retail components for both assets are already 98% and 92% committed, respectively, with tenant sales and shopper traffic showing firm double-digits YoY growth. We continue to see value in CAPL shares and are optimistic about recent key strategic moves to simplify the group’s structure and increase shareholder ROE. Even accounting for CMA’s delisting, the group’s balance sheet is likely to remain healthy with S$3.06b in cash and a net gearing of 56%. Maintain BUY with an unchanged FV estimate of S$3.79.
CapitaLand (CAPL) reported 1Q14 PATMI of S$182.8m, down 1.7% YoY mostly due to the absence of a one-time S$58.7m divestment gain in 1Q13. 1Q14 PATMI now constitutes 20.8% of our full year forecast and we judge 1Q performance to be broadly in line with expectations. In terms of the topline, 1Q14 revenues fell 3.4% YoY to S$612.6m as we saw lower contributions from Singapore development projects, partially offset by stronger development revenues in China and Vietnam, and higher rental income from investment assets.
Focused on marketing domestic residential inventory
An anemic 34 residential units were sold in Singapore over 1Q14, down significantly YoY from the 544 units sold in 1Q13, due to continued headwinds in the domestic housing segment and a lack of new launches over the quarter. We expect the run-rate to pick up ahead, however, as the group pushes to sell remaining inventory by adjusting prices at slower projects. Already, we have seen 106 units sold in Apr-14, mostly in Sky Habitat, as prices were lowered by an additional 10% to 15% versus initial launch levels. Over in China, total residential sales in 1Q14 fell 48% YoY to 1.2k units though we also expect the rate of sales to increase ahead as the group looks to launch about 8k units over the remainder of FY14.
Maintain BUY with unchanged S$3.79 FV
Management reports that newly operational assets, Raffles City Chengdu and Raffles City Ningbo, are gaining good traction. The retail components for both assets are already 98% and 92% committed, respectively, with tenant sales and shopper traffic showing firm double-digits YoY growth. We continue to see value in CAPL shares and are optimistic about recent key strategic moves to simplify the group’s structure and increase shareholder ROE. Even accounting for CMA’s delisting, the group’s balance sheet is likely to remain healthy with S$3.06b in cash and a net gearing of 56%. Maintain BUY with an unchanged FV estimate of S$3.79.
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