CapitaLand

CapitaLand: 2Q12 results broadly in line. Revenue rose 16.5% to $862.5m, helped by higher sales in Singapore (from 57 to 202 units yoy), China (from 255 to 812 units yoy) and Australia, as well as greater income from its shopping-mall business. Net profit eased 3.3% yoy to $385.9m, due to greater finance costs from borrowings and FX losses. Excluding revaluations and impairments, net profit was higher at $179.5m compared with $171.3m last yr. On outlook, mgt says Singapore and China will remain as the group's key markets for new invmts. Says the underlying fundamentals of the housing sector in the two markets remain sound, driven by new home formation, rising urbanisation and growing wealth creation. Remains confident the group will be able to further growth momentum. In Spore, CapitaLand intends to release new phases from The Interlace and Sky Habitat over the remaining yr. The Group will also continue to manage its existing properties and ongoing devts of CapitaGreen and Westgate. The AEIs and new completions at Bugis+ in Jul ’12, The Star Vista in Sep ’12 and The Atrium@Orchard by yr end are expected to increase the no. of operational malls to 17 by end ’12. In China, CapitaLand is targeting to release new sale units from Residences 77 in Beijing, as well as subsequent phases from existing projects such as The Loft in Chengdu and Dolce Vita in Guangzhou, subject to mkt conditions. The group also plans to launch its first value housing project in Wuhan, China, towards 4Q12. For the retail segment, positive lease renewals at Raffles City Shanghai anad Beijing are expected to continue given the robust retail and office mkts in these two cities. Two more Raffles City projects in Chengdu and Ningbo are scheduled to open in phases from 3Q12. The overall design Raffles City Chongqing has been approved and construction is expected to start by yr end. The stock trades at 0.85x P/B.