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Vested on Friday.
All non-sense...Monday it will go down few cents more.
Outperform call been there for years...but Isolater call works well for this counter...
CapitaLand and CapitaMalls Asia - Shanghai, Guangzhou, Shenzhen visit notes
■
We visited CAPL's projects in Shanghai, Guangzhou and Shenzhen?a total of 8 projects?with the trip ending with a presentation by key business heads.
We saw a good mix of completed and under-development sites, including the upcoming RC Changning and RC Shenzhen, as well as the mixed developments at Datansha Island (CAPL's first urban renewal project) and Hanzhong Lu.
We also had the opportunity to visit CMA's recently acquired Guangzhou site and saw the neighbouring malls within the vicinity to get a better understanding of the location.
■ Key highlights from the trip
(1) China property sales have improved YoY with ASPs up 10-20% this year. This partly offsets the slight 5-10% uptick in construction cost due to labour, preserving margins. Meanwhile, only 100 units are completed and unsold (of CAPL's > 65,000 unit-pipeline). The completion of 1,800 units in 4Q13 is on schedule, which means profit recognition will be backloaded
(2) Raffles City projects should see strata sales of certain office blocks (Shenzhen and Changning) to allow some returns to stakeholders in the near term, but management is mindful to retain control of the asset to preserve RC branding
(3) Ascott should benefit from operating leverage as more of its pipeline assets become operational (56% of total China units operational now)
(4) Managements will be focusing on building on scalability (benefit from economies of scale) and target more integrated projects (where they have an advantage).
■
Attractive risk rewardCMA and CAPL are our preferred developer picks due to their increasing earnings momentum led by higher contribution from new openings/completions (malls for CMA also residential completions for CAPL), layered on top of their recurring income streams from management fees and rental income.
CMA trades at 1.13x P/B or 29.5% discount to S$2.86 RNAV CAPL trades at 0.8x P/B or 43.5% discount to S$5.32 RNAV.
(Read Report)
Maintain OUTPERFORM: CMA and CAPL are our preferred developer picks
Credit Suisse
CapitaMalls Asia (CMAL.SI, OUTPERFORM, TP S$2.58)
We continue to like CMA as we expect its earnings momentum to improve in the coming quarters, driven by increased profit contribution from new openings and rent reversions at existing malls (underpinned by healthy tenant sales growth) in its China and Singapore markets, which collectively make up 85% of total assets. The stock trades at 1.13x P/B, or at a 29.5% discount to
CapitaLand (CATL.SI, OUTPERFORM, TP S$4.53)
We expect CAPL's earnings momentum to improve in the coming quarters (driven by CMA, better profit recognition from Singapore and China). At 0.80x P/B, the stock trades at a 43.5% discount to RNAV of S$5.32 (target price of S$4.53 based on a 15% discount to RNAV).
CapitaLand - Building an edge in China
Our recent ground checks on CapLand?s China projects suggest that it is gradually establishing an edge in large-scale mixed developments. Asset build is on track and retail footfalls are encouraging. Its attitude of improving returns at the project level is also a positive, in our view.
We tweak our FY13-15 core EPS by 1-2% but keep our target price, based on a 20% discount to RNAV. CapLand remains an Outperform, with catalysts from more capital recycling and yield uplifts.
What Happened
Last week, we toured CapLand?s projects in Shanghai and parts of south China (Guangzhou and Shenzhen), and also interacted with senior management and ground staff.
What We Think
We think CapLand is gradually carving out a competitive advantage over the local developers in large-scale commercial and mixed developments. Though not all will bear fruit in the near term, we believe the stage is set for more asset recycling once many of its Raffles City (RC) mixed projects are completed in 2015-17.
Meanwhile, we see improvements at the operational and project levels. In Shanghai, retail mall footfall remains robust, with a distinct improvement in traffic at Hongkou Plaza (CMA) since our last visit in 2012. This asset will enter its first renewal cycle in 2014 and management is confident of getting 15-20% rental reversions, like the group?s other malls. We think this is achievable.
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| CEO Mr Lim Ming Yan |
The feel is more mixed on China?s residential segment (12% of its GAV). The high-end segment remains weak due to the home purchase restrictions (HPR) but mid-end projects continue to sell well. Dolce Vita, a mid-range product in Guangzhou sold over 86% of its launched units at Rmb15k-20k psm. CapLand?s ground staff told us that property remains the most sought-after investment asset class in China.
Interestingly, we noticed more of CapLand?s commercial projects being carved out for strata sales, a segment not affected by HPR.
CEO Mr Lim Ming Yan?s style of management is to go bottom-up and improve yields and IRR at the project level. He expects development sales to be the ROE kicker, while maintaining a target 34% of its assets for development growth. Overall, we think CapLand is progressing well in achieving its ROE target of 8-12%.
Technical Analysis
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| Daily Chart |
What You Should Do
CapLand remains one of our key picks in the sector at 0.8x P/BV.
(Read Report)
Singapore Developers - DETERIORATING from Stable
2014: Shift towards home oversupply begins
We are turning more cautious on the Singapore residential market given oversupply risk.
We expect the era of supply shortage to end by 2015, due to a combination of rising completed supply and easing pent-up demand. Unsold inventory has risen since 3Q13 as developers race to launch products ahead of home price weakness.This also reflects declines in demand due to the effects of the seven cooling measures. Looking into 2014/15, demand growth could stay under pressure given potential interest rate increases and slower economic growth, as well as tighter immigration policies.
Another challenge faced by developers is margin squeeze from higher land costs
The competition for land is intense, driven by restocking needs, strategic bidding practices (eg, to protect existing sites), and new players entering the land market. Land costs for developers in the sector accounted for 57% of development cost in 2013, up from 46% in 2008. We estimate net margins could fall from c24% in 20112 to c10% in 2013/14, assuming launch prices stay flat. One other implication of the overheated land market is local developers being forced out of the market as they find it difficult to restock land.
Their success rate at winning sites has fallen from 23% in 2010 to 11% in 2013. This could slow developers? earnings momentum.
Stock implications
We expect volumes to fall 28% in 2013 and another 7% by 2015, and home prices to fall 15% (we previously forecast a fall of 10%). Our trend analysis shows volumes typically track ahead of home prices. To reflect our new home price assumptions, we cut our estimates for 2013-15 EPS by 6- 10% and RNAV by 2-6%, and cut out TPs by 9% on average.
Stock prices tend to lead home prices. We believe home prices have peaked in 2013 and will fall.
We downgrade City Dev to REDUCE (from Hold), given its proxy status and large exposure to the Singapore residential market.
We downgrade Keppel Land to HOLD (from Buy) given its recent outperformance.
We maintain CapitaLand at BUY, on trough valuation, and FNN at HOLD.
We still favour Singapore developers with entrenched and diversified overseas exposure.
Risks to our sector view
Our cautious view may not materialise in the event that:
1) interest rates stay low for a prolonged period,
2) cooling measures are reversed,
3) pro-immigration policies are renewed,
4) economic recovery turns out stronger than expected, thereby driving up investment sentiment, and
5) completion of supply is delayed due to a shortage of construction workers.
(Read Report)
only concern is when one buy up, they short you down :(
why such method ?
CapitaLand - Building an edge in China [ OP/◄ ► - S$3.01/TP:3.96 - Coy Flash -27/11 ] Our recent ground checks on CapLand?s China projects suggest that it is gradually establishing an edge in large-scale mixed developments. Asset build is on track and retail footfalls are encouraging. Its attitude of improving returns at the project level is also a positive, in our view. We tweak our FY13-15 core EPS by 1-2% but keep our target price, based on a 20% discount to RNAV. CapLand remains an Outperform, with catalysts from more capital recycling and yield uplifts. https://brokingrfs.cimb.com/uCKqj_-xpK3xiVaddYpiRnykWjKQsQTh6ke3slwXTs8R7PAdBY1ocruItQqkLvb-y_tHxN9Pf7g1.pdf
suppose blue chips' turns too ?
finally a white candle emerges ..... expect the unexpected ..... may retest 3.13 again .....
junction ( Date: 23-Nov-2013 19:20) Posted:
These are kacang putih shortists. Wont move the market. Some already got burnt by Wilmar and Biosensors yesterday.
seanpent ( Date: 21-Nov-2013 15:01) Posted:
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many shortists surfacing, even having a Shortist Corner shop newly opened..... guess gonna be another " expect the unexpected" day ..... |
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CapitaLand: Expected To Recognise A Net Loss Of S$149.4 Million For Australand Secondary Placement.
26 Nov 2013 17:23 Based on A$3.60 per stapled security being the closing price of Australand's stapled securities on the Australian Securities Exchange on 21 November 2013, being the date of the sale, the fair value gain on re-measurement of the remaining interest of 39.1% is S$4.7 million instead of S$26.6 million as estimated before. Arising from this, CapitaLand is expected to recognise a net loss of approximately S$149.4 million for the transaction taking into consideration a divestment gain of S$8.8 million, a fair value gain of S$4.7 million and a one-time accounting loss arising from the recognition of foreign currency translation losses and hedging reserves of S$162.9 million...
Trading Central notes the stock recently broke below a " symmetrical triangle" pattern, and is now turning down. Both the ST & MT moving averages are above the prices, and should prevent any upside potential. Moreover, the daily RSI remains capped by a negative trend line, calling for further decline. In conclusion, below $3.3, the house expects a new down leg to $2.75 and $2.6 in extension.
touches 3.02 for 3 consecutive days (but not much done at 3.02 compare to 3.03) .....
seems like it's probably going to use the 3.02 closing on 12-Nov-13 as a base forming guide .....
These are kacang putih shortists. Wont move the market. Some already got burnt by Wilmar and Biosensors yesterday.
seanpent ( Date: 21-Nov-2013 15:01) Posted:
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many shortists surfacing, even having a Shortist Corner shop newly opened..... guess gonna be another " expect the unexpected" day ..... |
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CapitaLand - Restructuring back on?
We think the partial sale of ALZ could mark the resumption, albeit a gradual one, of CapLand?s restructuring plans. ROE is unlikely to improve immediately but reallocating capital to its core markets is a good start, in our view.
We lower our FY13-15 core EPS by 2-8% to account for lower ALZ earnings but our target price (still based on a 20% discount to RNAV) rises due to higher ALZ equity value. Maintain Outperform with catalysts to come from more capital recycling and operational improvements.
What Happened
CapLand has successfully sold, in a secondary placement exercise, 115.6m stapled securities of Australand Property Group (ALZ AU, Not Rated) or 20% of the total issued stapled securities. The placement was priced at A$3.685/share, a 1.7% discount to the last closing price or at 1x P/BV. This move brings CapLand?s stake in ALZ from 59.1% to 39.1%, with ALZ to be deconsolidated from CapLand?s books. The stapled securities were placed out to institutional investors.
What We Think
A one-time S$163m foreign currency translation reserve and hedging loss will be realised as ALZ?s financials are deconsolidated. This has no impact on its book value as it has already been accounted for. Earnings contribution from ALZ will decline proportionately but we expect new commercial property completions at the CapLand and CMA level to offset the impact.
However, we are positive on this move from a strategic standpoint as it potentially marks a resumption, albeit a more gradual one, of its streamlining and restructuring process. CapLand says that ALZ will remain a key investment but is not closing any doors to a full exit. We retain our view that ALZ will eventually be fully divested.
The S$485m proceeds are expected to be redeployed into China and/or Singapore. Unlike Australia, these are its core markets, where it can scale up. That said, investors expecting a major lift in ROE in the near term may be disappointed.
We estimate ALZ generates around 6.5-7% ROE for CapLand, which could take a few years to achieve for new investments in China commercial properties (ex-reval gains).
Technical Analysis
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| Daily Chart |
What You Should Do
CIMB TP 3.94 Maintain Outperform, with the stock trading at the widest RNAV discount (38%) among the big-caps.
(Read Report)
saw under the " value" column, there's some big big qty/amt indicated..... can share share what's that ? is it matching or ? (window dressing coming?)
btw, my pennies tiao teow liao ... haiz ...
seanpent ( Date: 22-Nov-2013 08:40) Posted:
blue chips seems to be the direction to go now ..... US market blue chips doing pretty well .....
guess if there will be a year end rally, blue chips will probably still lead the way ..... pennies rally seems to be seasonable and takes quite a while for the dust to settle .....
WanSiTong ( Date: 21-Nov-2013 22:35) Posted:
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Haiz........I don't know what/how to say....... |
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blue chips seems to be the direction to go now ..... US market blue chips doing pretty well .....
guess if there will be a year end rally, blue chips will probably still lead the way ..... pennies rally seems to be seasonable and takes quite a while for the dust to settle .....
WanSiTong ( Date: 21-Nov-2013 22:35) Posted:
Haiz........I don't know what/how to say........
seanpent ( Date: 21-Nov-2013 15:01) Posted:
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many shortists surfacing, even having a Shortist Corner shop newly opened..... guess gonna be another " expect the unexpected" day ..... |
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Haiz........I don't know what/how to say........
seanpent ( Date: 21-Nov-2013 15:01) Posted:
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many shortists surfacing, even having a Shortist Corner shop newly opened..... guess gonna be another " expect the unexpected" day ..... |
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many shortists surfacing, even having a Shortist Corner shop newly opened..... guess gonna be another " expect the unexpected" day .....
CapitaLand prices Australand stake sale at bottom end of range, yielding $400 mln: Reuters
CapitaLand Ltd, Southeast Asia's largest property developer, priced a third of its majority stake in Australand Property Group at the low end of an indicated range, valuing the stake's sale at A$426 million ($400 million).
At the start of the year, Singapore's CapitaLand said it would review its Australia presence, and that it regarded Australand as more a financial investment and as a company with a business model different from its own. It later concluded its stake was a " key investment." ...
CapitaLand is reducing its stake in Australand to 39.1 percent from 59.1 percent by selling 115.66 million stapled securities at A$3.685 each, the company said in a statement on Thursday after flagging the sale a day earlier.
The top end of the indicative range was A$3.75. The stock was down 4 percent at A$3.95 at 0145 GMT.
The sale will improve the stock's liquidity and in turn improve its index ranking, which together will boost interest in Australand from institutional investors, CapitaLand said.
It said it will use the proceeds for " new opportunities."
" We are confident of the prospects of Australand as well as the real estate sector in Australia," said Lim Ming Yan, CapitaLand's president and group chief executive officer. " We are comfortable with our remaining interest in Australand and it will remain a key investment for us."
The placement will result in a loss of about S$127.5 million
($102.5 million) taking into account divestment gain, fair value gain and a one-time accounting loss arising from the recognition
of foreign currency translation losses and hedging reserves, CapitaLand said.
CapitaLand shares were a shade higher in a weak broader Singapore market, having fallen 17 percent so far this year.
Citigroup is the sole bookrunner for the placing which is likely to end on Nov. 26, CapitaLand said.
