personally i prefer Ascott over Capitaland.
http://www.businesstimes.com.sg/companies-markets/the-ascott-signs-four-new-management-contracts-in-china
CapitaLand (CAPL SP) BUY
3Q15 Results Flash: Net Profit of S$192.7m, up 48.3% yoy in line with expectations
Analyst: Vikrant Pandey / Derek Chang Tel: (65) 6590 6623/ (65) 6590 6614
| Company | Share price(S$) | Recommendation | Our Target Price(S$) | Within Expectation (Y/N) | 3Q15 Net Profit (S$m) | 3Q15 yoy | Highlights of Results |
| CAPL | 3.12 | BUY | 4.08 | Y (79.7% of full year) | 192.7 | 48.3% | See attached comments |
CAPL SP 3Q15
- Results in line with Expectations. 3Q15 PATMI of S$192.7m leapfrogged 48.3% yoy as topline growth saw a 17.1% jump yoy on higher project sales in China, while PATMI grew 48%, underpinned by realised forex gains from China and divestment gains in Japan. Stripping exceptional and revaluation gains, 9M15 core PATMI of S$567.5m is within our expectations at 79.7% of full year forecast.
- Topline growth underpinned by healthy sales in China. Development projects in China saw 129% yoy growth in residential units sold in 3Q15, at 2,422 units. In terms of sales value, 3Q15 saw 135% growth with China sales at 11.59 bn RMB.
- Talks cease on potential Asia Square acquisition. CAPL has stated that negotiations on the potential acquisition have ceased for the time being. The company has stated that it will not detract from exploring acquisition opportunities in line with management's strategy.
- Remaining focused on core markets Singapore and China. Management continues to stress the paramount importance of these two markets, noting that 2,000 residential units should see completion come 4Q15 in China, mainly The Metropolis, Vista Garden and Parc Botanica. We note that China and Singapore make up 46% and 37% of portfolio value respectively in 3Q15. These two markets also jointly accounted for 75.2% of total EBIT in 3Q15, with Singapore making up 41.1% and China at 34.1%
- Valuation. We have a BUY recommendation with a target price of S$4.08/share, pegged at a 20% discount to our RNAV of S$5.11/share.
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