CapitaLand

UOBKayhian on 10 Nov 2014

FY14F PE (x): 19.5
FY15F PE (x): 17.2

Results below expectations. CapitaLand reported 3Q14 net profit of S$130.0m, up
1.3% yoy, bringing 9M14 net profit to S$751.5m, up 7.7% yoy. Excluding portfolio gains
of S$16.6m, revaluation gains of S$279.2m and impairment write-back of S$9.3m,
operating profit increased 32% yoy to S$421.8m in 9M14 due to lower finance costs,
higher development profits from China residential and higher contribution from
shopping malls The results are below our expectations mainly due to timing differences
in the recognition of residential developments in China. We expect lumpy earnings
recognition in 4Q14 as CapitaLand completes about 1,000 residential units in 4Q14,
mainly from Central Park City in Wuxi and International Trade Centre in Tianjin.
Maintain BUY and target price of S$4.08, pegged at a 20% discount to our RNAV of
S$5.11/share. The stock is currently trading at a deep 32% discount to our RNAV/share.