SINGAPORE (Nov 10): OCBC is maintaining its “buy” call on CapitaLand with a fair value estimate of $4.13.
This came after CapitaLand on Wednesday announced that its 3Q17 earnings was up 28% y-o-y to $317 million, while 9M17 earnings was up $68.9% y-o-y to $1.3 billion.
See: CapitaLand's 3Q earnings up 28% to $317 mil on higher one-off gains
This was mostly due to due to fair value gains from Golden Shoe CarPark, the serviced residence component of Funan integrated development in Singapore and Citadines Biyun Shanghai in China, as well as portfolio gains from Wilkie Edge in Singapore, CapitaMall Anzhen in China and a 60% stake in CapitaLand Vietnam Commercial Fund I.
Revenue for 3Q17 came in at $1.5 billion, 9.7% higher from the previous year, mainly from higher contribution from development projects in Singapore, higher rental revenue from newly acquired or opened shopping malls and serviced residences, as well as the consolidation of revenue from CapitaLand Mall Trust, CapitaLand Retail China Trust and RCS Trust from 3Q.
However, the group’s Chinese home sales figures in 9M17 fell to 7,233 units (worth $12.7 billion), compared to 9,176 units (worth $14.8 billion) over the same period last year, due to fewer units being available for sale.
In a Wednesday report, analyst Eli Lee says that the group’s results were in line with expectations.
The analyst has also been monitoring CapitaLand Commercial Trust which has actively been reconstituting its portfolio by acquire Asia Square Tower 2 for $2.09 billion, while divesting One George St and Wilkie Edge and redeveloping the Golden Shoe Carpark.
The group’s serviced residence unit, The Ascott, also acquired an additional 60% stake in Quest Apartments Hotels in Australasia and an 80% stake in Synergy Global Housing in US, while adding 19 properties to its portfolio through investments, management contracts and franchise agreements.
As at 12.52pm, shares in CapitaLand are trading at $3.59 or 10.1 times FY17 earnings with a dividend yield of 3.2%.
