Tuesday 24 February 2015

CapitaLand Limited

OCBC on 18 Feb 2015

CAPL’s 4Q14 PATMI increased 187% to S$409.4m mainly due to divestment gains from office strata units at Westgate Tower, higher contributions and revaluation gains from the shopping mall and serviced residence businesses, partially offset by lower profits from China and lower portfolio losses. Full year PATMI and operating profit are reported to be S$1,160.8m and S$705.3m, up 38% and 40% respectively, which are within our expectations. Given the slowdown in the domestic residential space, the group sold only 278 units in Singapore over FY14 – a whopping 78% dip versus 1,260 units sold in FY13. Sales in China also fell 35% from 7,688 units in FY13 to 4,961 units in FY14; that said, we still see this to be a fairly respectable clip and note that Chinese total sales value only dipped 13% to RMB7,555m in FY14 given a more favorable mix. A final dividend of 9.0 S-cents has been proposed. We update our valuation model with latest sales datapoints and our fair value increases marginally from S$3.79 to S$3.98 (25% discount to RNAV). Maintain BUY.

Boost from Westgate office divestment gains
CAPL’s 4Q14 PATMI increased 187% to S$409.4m mainly due to divestment gains from office strata units at Westgate Tower, higher contributions and revaluation gains from the shopping mall and serviced residence businesses, partially offset by lower profits from China as fewer units were handed over over the quarter and lower portfolio losses. Full year PATMI and operating profit are reported to be S$1,160.8m and S$705.3m, up 38% and 40% respectively, which are within our expectations. Full year revenue increased 12% to S$3,924.6m again due to Westgate, improved performances from investment assets and development projects in Vietnam, offset by poorer numbers from developments in China. A final dividend of 9.0 S-cents has been proposed, up from 8.0 S-cents in the previous year.

SG resi sales down 78% to 278 units in FY14
Given the slowdown in the domestic residential space, the group sold only 278 units in Singapore over FY14 – a whopping 78% dip versus 1,260 units sold in FY13. We note that two of the group’s completed residential projects, Urban Resort (69% sold) and The Interlace (84% sold), are subject to QC penalties this year but total extension charges of S$8.6m are unlikely to have a significant impact. Sales in China also fell 35% from 7,688 units in FY13 to 4,961 units in FY14; that said, we still see this to be a fairly respectable clip and note that Chinese total sales value only dipped 13% to RMB7,555m in FY14 given a more favorable mix. The group has a steady pipeline in China with 9k units that are launch-ready and expects to complete 8k units in 2015.

Fair value increased to S$3.98
FY14 same-mall NPI for the group’s retail business increased 2.5% and 19.9% in Singapore and China, respectively, with Chinese shopper traffic also growing 4.8% over the period. We update our valuation model with latest sales datapoints and our fair value increases marginally from S$3.79 to S$3.98 (25% discount to RNAV). Maintain BUY.

No comments:

Post a Comment