CapitalMalls Asia: Could see some interests after reporting strong 3Q results above expectations. 3Q Net profit at $68m rose 14% YoY, as grp saw 5% YoY increase in revenue under management to $325.6m. Results bring YTD Net Income to $277.9m, up 27.3%YoY, translating to an annualized Net Income of $370.5m, at the higher end of street FY10 estimates....
Strong performance attributed to rising rental, occupancy rates and contributions from Alexandra Technopark, while its 2 Australian properties contributed positively as the AUD strengthened and NPI for Malls in China grew faster than expected....
Going forward, grp will continue to expand portfolio of shopping malls, starting with its recent Bedok Town Centre site, to build an integrated retail cum residential development at an estimated $550.0m. Grp remains confident of achieving target of investing between $800m - $1b in new projects in 2H10....
We note Balance sheet remains strong with a strong cash position of $1.4b and average debt maturity of 4.62yrs. At current prices, grp trades at undemanding valuations at 1.45x P/B, vs peer’s average of 1.69x, with portfolio average occupancy at 89.6%, up 55.5%YoY….
Deutsche maintains Buy, increasing TP to $2.53 from $2.51, based on SOTP valuations, citing a stronger 4Q, due to completion of Orchard Residences and plans to open 3 malls in China in 4Q10. Technically, see support at $2.12 (1-month low) and resistance at $2.20. (30-day moving average)
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