CapitaLand

CapitaLand: FY12 results lower yoy, but broadly inline to above Street expectations 4Q12 net profit fell 45% yoy to $262.7m, as it booked lower gains from the divestment of assets and posted higher impairment charges for some investments. Sales rose 4.9% to $1.11b. For FY12, net profit declined 12% to $930.3m, higher than consensus estimates of $881.5m. Sales was $3.3b, +9.3%. CEO Lim Ming Yan says the group’s financial strength, expertise and track record will help it to weather market volatility. He envisions a more “streamlined organization”. Last mth, the group said it is reorganizing into 4 main units to help focus on its key markets: CapitaLand Singapore, CapitaLand China, CapitaMalls Asia and The Ascott. In this way, CapitaLand will be able to better focus on China and Singapore, its two biggest markets by assets. The group may exit some projects in the U.K., India and the Middle East. China made up 39% of its $34.5b assets as of Dec, followed by 33% in Singapore. The developers’ two core markets of Singapore and China accounted for 76.9% of EBIT in the year. Australia is the third-largest market with 16% of assets. CapitaLand’s revenue from Singapore projects climbed 10.4% to $854.3m, boosted by sales at the Interlace, Urban Resort Condominium and Sky Habitat. The developer sold 681 residential units in Singapore valued at $1.3b in the year, down from 844 homes or $1.35b of sales a year earlier. CapitaLand said transaction volume and prices may “moderate,” with the high-end segment more likely to be affected by the 7th round of cooling measures implemented last mth. The group has 2,800 Singapore units in the pipeline in sought-after locations. Residential sales in China more than doubled to 3,161 units in the same period, with revenue more than doubling yoy to $1.4b. . The group proposed a first and final dividend of 7 cts, translating to 1.7% yield. The group paid 6 cts final and 2 cts special dividend last yr. The stock trades at 1.1x P/B. Post results, OCBC maintains at Buy with TP $4.29.