CMA

CMA: Citi has a huge report out on counter. House undertake a deep-dive analysis of CMA. Note that CMA is poised to harvest multi-year gains from sustained investment in the China consumer growth story, while earnings will be anchored by recurring income in Singapore. In addition, a unique capital-recycling platform offers upside to our earnings forecasts. House raise TP to $2.58 and CMA is added to the Citi Focus List Pan Asia. In house view, CMA’s best comparables are real estate developers with sizable portfolios focusing on Asian markets. Prominent landlords in the Asian region (ex.REITs in Japan) include the likes of Hang Lung and Hysan. At a 25% discount to NAV and 30.3x FY13E PER, the CMA stock does appear to be particularly attractive compared with such names. However, if consider the underlying asset portfolios, Hang Lung and Hysan are highly concentrated in China and Hong Kong, respectively. A slowdown in growth in these markets may become a drag rather than a boost to the valuation of these companies. Conversely, given the nature of its exposure to China and its scale in both China and SG, believe CMA deserves a valuation premium for the defensiveness of its earnings profile.