CapitaLand

CapitaLand: 3Q12 results improved yoy, but came in below Bloomberg consensus estimates. Revenue rose 12.9% yoy to $686.9m, due to higher takings from its development projects in Singapore, China and Australia, and higher contributions from its shopping mall and property-management businesses. Sales revenue from Spore devt projects rose 7% to $220.1m, mainly from The Interlace and Urban Resort Condo. In China, total revenue was $67.9m, +67% yoy. Revenue from devt projects included that of Ascott Guangzhou which has been sold to Ascott Reit in Sep ’12. Other projects recognized incl Metropolis, Riverside Ville and Beau Residences. Net profit was $148.5m, +85% yoy, due to jump in other income, which included portfolio gains of $79.8m, derived mainly from the divestments of Ascott Guangzhou and Ascott Raffles Place to Ascott Reit, as well as the divestment of the entire 20.8% interest in United Malayan Land to an unrelated party. Net profit was also helped by a low base of comparison in 2011, when CapitaLand had reported a sharp 82.6% plunge in net profit then, due mainly to new accounting practices adopted last year. The new policy requires overseas and certain Singapore projects be recognized only upon full completion. On outlook, in Singapore, the group expects new phases from d’Leedon and Sky Habitat to be released over the remaining year. Does not expect a significant impact from the tightening measures on new home sales in the short term. In China, the group notes buying sentiment has picked up pace since Apr ’12, and has sustained into 3Q12. It targets to release new units for sale from subsequent phases from existing projects, subject to mkt conditions. In addition, the first value housing project in Wuhan , The Lakeside is slated for launch in 4Q12. The group will be seeking opportunities to acq new devt sites to boost its pipeline. The group will continue to evaluate opportunities to originate new private equity funds and real estate financial products to complement its core real estate business in China and SE Asia. CapitaLand trades at 0.93x P/B.