Capitaland

Capitaland stays flat at $2.94 after reporting 1Q12 net profit rose 31.3% yoy to $133.2m. Excluding exceptional items, results were largely in line. JPMorgan notes 1Q is traditionally seasonally weaker on revenue recognition. While residential sales were slow, momentum is expected to pick up in 2Q, given the launch of Sky Habitat in S’pore and more launches in China. But residential-segment revenue recognition will be low in 2012 on fewer completions this year. House views valuation as undemanding at a 40% RNAV discount but with a significant completion pipeline skewed towards 2013, it sees limited near-term catalysts. Longer term, it tips the possibility risk-aversion towards China real estate may normalize and better performance from CapitaMalls Asia as potential catalysts. It keeps an O/W call with a $3.40 target. Meantime, OCBC Secs has cut its target price for the stock to $3.21 from $3.40. Technically, the Mar 7 trough at $2.86 offers support, while the psychological $3.00 is a likely cap.