CapitaLand

Feb 19 close: S$2.91

DMG & Partners Research, Feb 19

CAPITALAND reported a weak set of Q4 2013 results yesterday, with net profit of S$143 million (-45 per cent y-o-y) accounting for 17 per cent of FY2013 results of S$850 million (-9 per cent y-o-y). Although full-year revenue of S$4 billion was 21 per cent higher y-o-y, both Ebit and net profit were down 11 per cent and 9 per cent y-o-y, largely due to divestment of 20 per cent stake in Australand, repurchase of convertible bonds and higher impairments. Excluding these, recurring net profit would have improved by 4.3 per cent.

CapitaLand announced higher dividends at eight cents which gives an implied yield of 2.7 per cent. CapitaLand is likely to continue facing headwinds in Singapore and China (collectively 83 per cent of assets) in the near term, whilst its listed Reits' entities are likely to outperform given their relatively higher yields.