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Analysts: CapitaLand Stable Growth; Over 10% Upside!
Aspire, Hot Picks | 08 May 2015
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By: Raymond Leung
Articles (142) Profile

Analysts' updates on CapitaLand Limited as at 07/05/2015

Real estate developer and owner, CapitaLand (CAPL) announced the results for the first time in 2015. Analysts continued to remain hyped up about the counter despite the lower profit after tax and minority interest as compared to previous quarters, particularly because of the significantly higher revenue.

Singapore & China Contributes To Higher Revenue

Source: Income Statement for CapitaLand, Bloomberg

Revenue for 1Q15 fell within expectations of analysts as it grew 49 percent Year-on-Year (YoY) to $915 million. It was mainly attributed to higher rental income, consolidation of CapitaLand Township and contributions from residential projects in Singapore and Vietnam. Contributions from CapitaLand Township increased this quarter as it became a wholly owned subsidiary starting from 1Q15.

Singapore and China continues to be the main contributors to CAPL’s revenue, amounting to 78.9 percent. The group will continue to seek opportunities and diversification in Vietnam, Indonesia and Malaysia.

AustraLand Cause Of Lower PATMI

CAPL’s Profits After Tax and Minority Interests (PATMI) for 1Q15 decreased 11.8 percent YoY to $161.3 million due to the absence of contributions from AustraLand and a divestment gain of $19.1 million. However, when excluding the discontinued business segments, PATMI from its continuing operations grew by 9.4 percent YoY.

The growth was driven by higher contribution from CapitaMalls Asia through increased stake holdings and portfolio gains which were partially offset by lower revaluation gains from investment properties.

Overall Optimistic Outlook For FY15

Besides its existing core markets, CAPL will be looking at key gateway cities globally for expansion of its serviced residence business. The capital strategy of the group remains unchanged as they will be utilising various capital market instruments such as funds, joint ventures and Real Estate Investment Trusts (REITs). At the same time, CAPL aims to grow its assets under portfolio management while seeking opportunities to capitalise on.

Based on 1Q15, analysts from OCBC Research felt that CAPL’s performance fell largely within expectations. Revenue, gross profit and PATMI for the quarter accounted for 23.5 percent, 26.9 percent and 21.7 percent of their full year forecast.

Analysts’ Recommendations

Analysts from 3 different research houses unanimously gave CAPL a “Buy” call as they remained confident towards the real estate developer. Based on the three calls, CAPL has a potential average upside of PERCENT.

Trained in fund management, Raymond is familiar with shares and various investment vehicles.

Please click here for more information about this author.

CapitaLand  3.580 +0.02 +0.56%   
Business: Co develops, owns, and manages real estate properties. [FY18 Geographical] China (41.2%), S'pore (38.5%), Europe & others (18.6%), Vietnam & Others (1.7%).

Insight: Apr-19, 1Q19 revenue fell 23.8% while net profit d... Read More

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