CapitaLand

CapitaLand: DB notes new CEO Lim Ming Yan articulated a strategy to streamline CAPL’s structure, refocus on core markets and businesses, and drive up ROE. A strategic review of the businesses (including Australand) has been initiated, with a view to divest non-core assets. More aggressive efforts to move inventory for Singapore residential projects (selling c.465 units in Jan/Feb, largely from d’Leedon after reducing prices 10-15%). The acquisition of a 51% stake in a $3.2b integrated development at Danga Bay, Iskandar was also announced in 1Q. CapitaLand’s well diversified portfolio in retail, office, serviced apartments and mixed developments buffers its exposure to policy headwinds in the housing market. These asset classes have generally been insulated from policy intervention and accounts for the majority of CAPL’s asset base. DB maintains BUY with TP of $4.39, states that over the past 8 years, CAPL’s traded at an average 11% disc to NAV vs. 28% currently. Group has rarely traded below a 30% discount to NAV for an extended period.